What rating adjusts "manual" rates based on past loss experience or other unique risk factors?

The correct answer is Merit Rating, which is a method that adjusts insurance premiums based on specific characteristics of the insured’s risk profile, taking into account past loss experiences. With merit rating, an insurer may assess an individual policyholder's past claims history and other relevant factors to determine whether to adjust the manual rates upward or downward.

In contrast, experience rating looks at a longer history of losses for a group or business and adjusts premiums based on that data, typically used for workers' compensation or liability coverage. Retrospective rating evaluates the losses after the policy period has ended to calculate premiums based on that loss experience, while loss ratio focuses on the relationship between incurred losses and earned premium; it's a measure used to assess a specific insurance company’s profitability rather than a direct method for adjusting rates.

Merit rating is beneficial as it enables insurers to reward safe and low-risk behaviors of policyholders by offering them lower premiums, further encouraging good risk management practices.