3010.26—Calculation of unused rate adjustment authority.
(a)
Unused rate adjustment authority accrues during the entire period between notices of Type 1 rate adjustments.
(b)
When notices of Type 1 rate adjustments are filed 12 months apart or less, either the annual or partial year limitation (developed pursuant to § 3010.21(a) or § 3010.22(b) respectively) is used to measure the accrued unused rate authority. In either circumstance, the new unused rate authority for each class is equal to the difference between the maximum allowable percentage change in rates under the applicable rate limitation and the actual percentage change in rates for that class.
(c)
When a notice of rate adjustment is filed more than 12 months after the previous notice of rate adjustment, unused rate authority is computed in three steps:
(1)
The unused rate authority for the 12 months represented by the annual limitation is computed as described in paragraph (b) of this section;
(2)
The additional unused rate authority accrued is measured by dividing the Base Average applicable to the instant notice of rate adjustment (as developed pursuant to § 3010.21(a)) by the Recent Average utilized in the previous notice of rate adjustment (as developed pursuant to § 3010.21(a)) and subtracting 1 from the quotient. The result is expressed as a percentage; and
(d)
Unused rate adjustment authority lapses 5 years after the date of filing of the notice of rate adjustment leading to its computation.