Page 6 - Microsoft Word - PA ANN RPT 2015 DRAFT.doc

PCRB ACTUARIAL INITIATIVES

In December, 2015 the PCRB Actuarial Committee meeting discussed and identified various
special projects for consideration in 2016 and beyond. These projects include, but are not
limited to the following: ratemaking methodologies, ultimate loss estimation and trend analysis,
and the experience rating plan.

PCRB INFORMATIONAL INITIATIVES

The PCRB continued its tradition of providing educational programs in 2015. Subjects
addressed in these seminars range from basic programs describing PCRB operations and
functions to more advanced and detailed classes covering specific topics, such as the Test
Audit Program, unit statistical reporting and workers’ compensation rating plans. Content
pertaining to the interpretation of “regular and frequent” language in classification definitions,
classification of mercantile operations was completed and posted to the PCRB website in 2015.

BUDGET AND ASSESSMENT EXPERIENCE

Expenditures for the Year 2015 were managed within the PCRB’s budgetary plan. For the year,
expenditures were approximately 96.0 percent of budget. Quarterly assessments were imposed
throughout the year consistent with the 2014 Budget. An operating surplus generated for the
year will be applied according to Governing Board direction as part of the annual adjustment of
assessment process which will take place in mid-2016 for the 2015 Year.

DATA COLLECTION ACTIVITIES

Collection of timely, accurate and complete statistical information remains a key issue for the
PCRB and its members. In 2015, existing programs and incentives applicable to the reporting
and collection of financial and unit statistical data, as well as the monitoring of carrier audits,
continued to be actively monitored and managed by PCRB staff. An overview of 2015 data
collection program experience follows:

Financial Data – Although members were able to use the Financial Data Reporting Application
(FDRA) during the reporting season for 2014 Calls in 2015, incentive charges of approximately
$146,506 associated with those reports were assessed in early 2016. During 2015, the PCRB
continued to use and improve upon its FDRA to collect the 2014 Calls that were subject to the
FDIP and Pennsylvania Special Schedule W.

The FDRA used in 2015 included ALL Financial Calls and Pennsylvania Special Schedule W for
2014 reports. This internet-based application allows reporting entities to view results of
applying PCRB and Insurance Department edits prior to submission of entered data and will
expedite the exchange of criticisms and corrected data, if needed. The FDRA helps to
accelerate availability of financial data and to mitigate incentive charges previously encountered
by carriers experiencing difficulty in successfully passing edits applicable to the PCRB’s
Financial Calls and/or the Pennsylvania Special Schedule W.

Unit Statistical Plan Fines - Most PCRB members continued their successful compliance with
reporting requirements for the Unit Statistical Plan. Incentive charges incurred in 2015
(approximately $1,100,000) were higher than the comparable 2014 charges (approximately
$900,000).

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