Most policies written today are claims-made policies.
From the policy’s retroactive date, the "step process" begins. The image above best visualizes how this process comes into play.
During the first 5 years of a policy, the exposure for a claim increases.
The policy begins at a lowered premium rate because the exposure for a claim is low, but as the insured continues to see patients, the exposure increases. The premium also slowly increases to the mature rate over 5 years.
After year 5, typically carriers begin to issue claims free credits for insureds who have not had any claims made against them, which will begin to reduce their premium at renewal.
If you are in the step process and would like to know when your rate will become mature, as well as what the mature premium rating is, please don’t hesitate to contact us today!
If your new policy is picking up your prior acts, and your retroactive date is more than five years from the policy’s effective date, your policy will be rated at the mature premium rate.