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How Premiums are Determined

Premiums are calculated based on actuarially developed rates applied to the exposure base of the proposed insured. Since a RRG is built as a long-term solution to cost and stability issues experienced in the commercial market, SCRUBS RRG's rates must be expertly calculated on a conservative basis.

Premiums, of course, must capture the cost of managing an insurance operation, and SCRUBS RRG's physician leaders are determined to maintain a cost of doing business that is below the traditional expense load factors seen in the industry. The physician leaders of SCRUBS RRG consider the actuarial recommendations to conservatively determine the rates that will be required to provide strong long term security to its members. From prudent and responsible underwriting of applicants, SCRUBS RRG results are better than the general insurance marketplace, allowing the RRG to support rates superior to those offered by other insurers.

Do all members receive the same rate or are there considerations made for other underwriting criteria?

All rates are calculated based upon actuarial rate studies for each individual state and for rating territories within a state. SCRUBS RRG's physician leaders work to provide better than average rates to all its members. Considerations are made for underwriting criteria such as individual exposures, historical results, quality of the facility's current patient safety program, and the insured's willingness to join SCRUBS RRG in working towards improvement in these areas.

Are members required to meet annual underwriting criteria?

Yes. Although members will not be required to resubmit any pre-underwriting paperwork, they will be reviewed for loss experiences, changes in exposures, year's loss issues, as well as their participation in the RRG's joint patient safety improvement program.
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