Premium Surcharge Clause Samples
A Premium Surcharge clause establishes an additional fee or charge that is added to the standard premium amount under certain conditions. Typically, this clause applies when specific risk factors are present, such as a higher-than-average claims history, changes in coverage, or late payments. Its core practical function is to compensate the insurer for increased risk or administrative costs, ensuring that the pricing of the policy remains fair and reflective of the actual risk profile.
Premium Surcharge. (i) If PRISM experiences an unusually large number of losses under a program during a policy year, such that notwithstanding reinsurance coverage for large individual losses, the joint insurance funds for the program may be exhausted before the next annual premiums are due, the Board of Directors or the program’s governing committee may, upon consultation with a casualty actuary, impose premium surcharges on all participating members; or
(ii) If it is determined by the Board of Directors or the program’s governing committee, upon consultation with a casualty actuary, that the joint insurance funds for a program are insufficient to pay losses, fund known estimated losses, and fund estimated losses, which have been incurred but not reported, the Board of Directors or the program’s governing committee may impose a surcharge on all participating members.
(iii) Premium surcharges imposed pursuant to (i) and/or (ii) above shall be in an amount which will assure adequate funds for the program to be actuarially sound; provided that the surcharge to any participating member shall not exceed an amount equal to three (3) times the member’s annual premium for that year, unless otherwise determined by the Board of Directors or the program’s governing committee. Provided, however, that no premium surcharge in excess of three times the member’s annual premium for that year may be assessed unless, ninety days prior to the Board of Directors taking action to determine the amount of the surcharge, PRISM notifies the governing body of each participating member in writing of its recommendations regarding its intent to assess a premium surcharge and the amount recommended to be assessed each member. PRISM shall, concurrently with the written notification, provide each participating member with a copy of the actuarial study upon which the recommended premium surcharge is based.
(iv) A member which is no longer a participating member at the time the premium surcharge is assessed, but which was a participating member during the policy year(s) for which the premium surcharge was assessed, shall pay such premium surcharges as it would have otherwise been assessed in accordance with the provisions of (i), (ii), and (iii) above.
Premium Surcharge. HCA collects Premium Surcharges in accordance with the requirements of WAC ▇▇▇-▇▇-▇▇▇. The amount of the Premium Surcharge shall be set in the Rate Book.
Premium Surcharge. If the Authority experiences an unusually large number of losses during a policy year the funds for a given Program may become exhausted. In such case the Board may, upon consultation with an actuary, impose premium surcharges on all members who were in the Program at the time such loss or losses occurred in order to pay necessary costs. However, annual surcharges shall not exceed an amount equal to three times the member's annual premium for the policy year in which such loss occurred. Each member surcharge shall be based upon its pro rata share of premiums paid in said year. It is understood this does not limit the Authority from surcharges in future years, even losses for which a levy may have been imposed in a previous year.