NAC616B.412. “Expected annual incurred cost of claims” defined.

“Expected annual incurred cost of claims” means the result of a calculation in which the employer’s estimated payroll for the first 12 months of self-insurance is multiplied by the sum of his or her annual claims expenditures for those claims initiated during a period of 3 years ending 1 year before the date on which his or her election to be a self-insured employer is made plus an estimate of the additional costs, including future costs which are due or may become due, which will be paid in settlement of those claims, divided by the employer’s total payroll for the same 3-year period. The term also includes an estimate of the employer’s cost of administration of his or her program of self-insurance.

     [Comm’r of Insurance, PC-25 § 7, eff. 8-6-80]—(Substituted in revision for NAC 616.148)