The Take-Out Credit Program is a filed program in Indiana. It became effective January 1, 1992. The program encourages carriers to remove (or take out) employers from the residual market. It allows a carrier to obtain credits against its Pool participation base by writing assigned risks voluntarily.
For every dollar in premium removed, the carrier gets a dollar credit against its Pool participation base. The employer must stay out of the residual for at least one policy year. The carrier can earn the credit for up to three years. The credits are applied against a carrier's calendar year voluntary premium. Calendar year voluntary premium is used as the basis for the apportionment of the results of the residual market.
For 2017, carriers filed for Take Out Credits on 1,978 policies totaling just over $17 million in premium.
Indiana Calendar Year Results
Risks = new takeouts plus renewal takeouts
Premium = booked direct written premium
In 2004, NCCI implemented an "Automated" Take-Out Credit Program for all workers compensation insurance carriers that are Plan participants. The automation eliminates the need for carriers to manually track and submit eligible policy data on an annual basis to NCCI for credit. Features of the automation include:
Automatic identification of the eligible policies as reported to NCCI
Calculation of the take-out credit based on the filed and approved program in each applicable state (including Indiana)
Annual electronic reporting via e-mail to enrolled carriers with their estimated take-out credit, detailed information on the identified policies, reported premium, and credit calculations by state
Ability of the carrier to review the Take-Out Credit Report and add or modify policy information, if needed
Electronic approval by the carrier for fast, easy acceptance of the NCCI calculated take-out credit