What alternative allows premium adjustment after expiration based on actual losses incurred?

The correct answer is based on the characteristics of the Retrospective Rating Plan. This type of rating plan allows an insurer to adjust the premiums after the coverage period has ended based on the actual losses experienced by the insured during that period. Unlike standard or flat rating plans, which set fixed rates at the outset, the retrospective rating plan ties the premium directly to the loss experience.

This mechanism provides a way to reward safe companies that incur fewer losses with lower premiums, while those with higher losses bear a higher cost. By using actual incurred losses as a basis for future premium adjustments, it creates a financial incentive for policyholders to prioritize risk management and loss prevention.

In contrast, other plans like the Experience Rating Plan may adjust future premiums but are typically based on past losses over a longer period rather than actual losses specifically from the most recent coverage period. The Flat Rating Plan assigns a uniform premium not linked to loss experience, while a Modified Rating Plan combines elements of both experience and flat rating but does not focus on post-expiration adjustments based on actual losses like the Retrospective Rating Plan does.