On a retro rated policy, premium is calculated as a function of loss. This function is composed of retro rating parameters such as the loss conversion factor, tax multiplier, retro minimum, and retro maximum; they define how much premium an insurer can collect given a certain amount of loss. Paid Loss Retrospective Rating Plan . General Explanation; Upon agreement between the carrier and the insured, and in conjunction with the Retrospective Rating Plan, the carrier may enter into a financial arrangement with the insured in which the full deposit premium is not paid to the insurance carrier at policy inception. A retroactive date, or retroactive insurance, is a feature of claims-made policies (professional liability or errors and omissions) that determines whether your policy will cover losses that occurred in the past. If damages happened before this date, any ensuing legal judgment, settlement, or attorney fees will be your responsibility.