What type of rating involves insurers using plans developed by the Insurance Services Office (ISO)?

Loss cost rating is a method where insurers utilize plans and data developed by the Insurance Services Office (ISO) to determine the base loss costs for an insurance policy. This approach allows insurers to have a standardized and calculated method for estimating the potential losses associated with different types of risks.

Under loss cost rating, the ISO provides industry loss data and statistics that insurers can incorporate into their pricing structures. This enables a more consistent evaluation of risks across different insurers and helps ensure that rates reflect the actual risk exposures in a particular market or region.

Merit rating focuses on adjusting premiums based on individual policyholder characteristics or behavior rather than industry-wide data. Experience rating takes into account the policyholder's past loss history to determine future premiums. Retrospective rating allows for premiums to be adjusted based on the actual losses experienced during the policy period, rather than relying solely on predetermined rates. These approaches differ from loss cost rating, which relies on established research and data provided by the ISO.