How is the daily rate for annual insurance calculated in a statutory year proration?

The daily rate for annual insurance in a statutory year proration is calculated by dividing the total insurance amount by 360. This method is commonly used in the insurance industry for premium calculations because it standardizes the daily rate.

The choice to use 360 days instead of 365 helps simplify calculations and aligns with traditional practices in both financial and insurance contexts. By using a 360-day year, the daily rate becomes more manageable, and it provides a consistent framework across various calculations such as interest and insurance premiums.

This method also ensures that, regardless of the number of days in a specific month or year, each day is calculated with the same daily insurance cost, making it easier for companies and agents to compute the necessary premiums for shorter periods or when the policy is being adjusted.