Anniversary Rating Date Ard

Key Takeaways

• ARD marks the date when insurance policy rules and rates can be reexamined each year.
• State regulators set rules on how ARDs are used by insurance companies.
• ARD endorsements modify policies when the ARD differs from the policy renewal date.
• NCCI eliminated the ARD rule, impacting how rates are applied in rewritten policies.

What Is the Anniversary Rating Date (ARD)?

The Anniversary rating date (ARD) is the day and month that an insurance policy went into effect. It marks the date the following year on which the policy can be re-examined. The ARD determines how changes to the rules and rates of the policy are applied.

The ARD is important in the renewal of workers' compensation coverage for companies. State regulators define the terms for when and how the ARD is used by insurers.

How Anniversary Rating Dates Impact Insurance Policies

An anniversary rating date endorsement is attached to a policy only when the ARD is different from the policy renewal date. This attachment modifies the policy to allow the insurer to use the rates from the ARD rather than the rates from the policy renewal date. This prevents the insurance company from canceling the policy before the expiration date and then reissuing it in an effort to take advantage of new prevailing rates in the marketplace.

For example, a policy with an anniversary rating date of May 1 but an effective date of Jan. 1 will only have new rates apply once May 1 is reached. This is because a policy with an anniversary rating date that falls after the effective date will only have new rates apply starting on the anniversary date and remaining through the policy period.

Changes to Anniversary Rating Date Rules

Insurance is governed by the states, and some states do not apply anniversary rating dates. In these states, the effective date is the date one which rules and rating changes are applied.1 Anniversary rating dates are especially important in cases in which a policy has been canceled or rewritten several times, or if multiple policies exist with different effective dates.

The National Council on Compensation Insurance Inc. (NCCI) eliminated the anniversary rating date rule on May 1, 2017.2 The organization gave this example to demonstrate the new rule: