What should the premium include, aside from the base rate?

The premium should include assessment and membership fees in addition to the base rate because these costs are often essential for providing coverage and ensuring proper evaluation of risk. Assessments can help fund state guaranty associations or contribute to various compensation funds designed to protect policyholders in the event an insurer becomes insolvent. Membership fees may cover administrative costs for maintaining the insurer's operations or participating in a specific insurance program.

Including these fees in the premium reflects the total cost of underwriting and maintaining the insurance policy, ensuring that all necessary expenses are accounted for. This comprehensive approach allows both brokers and insureds to have a clear understanding of how much coverage actually costs, based on more than just the basic premium structure. By ensuring all related costs are included, brokers can better advise clients and ensure compliance with regulatory requirements.