: the number of BMS levels, the transition rules dictating the movements of policyholders within the system, and the … insurance market. We begin the analysis by focusing on transition rules based solely on claim frequency, a framework in which … most implemented BMSs work, including the current Saudi BMS. We then consider transition rules that depend on frequency and …

When a bonus–malus system with a single set of optimal relativities and a set of simple transition rules is implemented … under a financial equilibrium constraint. Furthermore, we introduce a metric called effectiveness of transition rules to … compare the different specifications of transition rules. We also argue that varying transition rules which are more flexible …