line item 14 & 15

tracyguo8tracyguo8
in NCCI.Circular

Hi,

In Fisher, the balance equations include the tax multiplier when calculating the charge difference and entry ratio difference between min and max premium.

Why for NCCI Circular, we didn't include tax multiplier when calculating the table of agg loss factors value difference (item 14) and entry difference (item 15)?

Thanks.

Comments

  • adminadmin

    The NCCI circular uses a slightly different but equivalent presentation of the balance equations. The tax multiplier is included implicitly via lines 12 and 13 which are used in 14 and 15.

    You can rewrite the Fisher balance equations by multiplying them by T/T to get phi(r_H) - phi(r_G) = (( e+E[A]) - H/T)/(cE[A] for example and now it's more obvious that they're equivalent as line 12 is H/T

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