Experience Rating Plan Methodology Update

Posted Date: Current

INTRODUCTION

NCCI recently completed a comprehensive multi-year evaluation of the Experience Rating Plan (Plan) methodology and performance. The result is Item Filing E-1409, which creates a more predictive experience rating modification. Components of the filing include:

Experience rating modifications that reflect a more equitable determination of primary and excess losses across states with varying cost levels
More comparable Plan performance in states with claim costs that vary significantly from the countrywide average
Experience rating modifications that are less sensitive to large outlier claims without sacrificing predictive accuracy
More consistent calculation of each employer’s expected claim count
Recalibrated credibility parameters underlying the weight and ballast values to increase equity across employers
The elimination of complex calculations where no value is added

These revisions are proposed to become effective for experience rating modifications with rating effective dates on and after each state’s anticipated loss cost/rate filing (for filings effective on and after November 1, 2023).

To learn more, please review the FAQs, Filing Summary, and Webinar information on this resource page. You will find additional information in the Related Content section.

RELATED CONTENT

Fact Sheet (PDF)

ABCs of Experience Rating (PDF)

Basics of Experience Rating

Advanced Experience Rating

How to Understand Your Experience Rating Worksheet

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Item E-1409

Item E-1409-A

Rating Values Underlying Item E-1409 (Excel)

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