Experience Rating

How can I learn more about MWCIA's Web Experience Mod History product?

Fri, 01 Jul 2016 00:00:00 GMT

You can access the Web Experience Mod History circular and Frequently Asked Questions by clicking here.

What are the State Per Claim Accident Limitation amounts for Multiple Claims: 2022, 2023, 2024, 2025 and 2026 experience modifications?

Fri, 01 Jul 2016 00:00:00 GMT

2022--$461,000
2023--$485,000
2024--$245,000
2025--$239,000
2026--$269,000

What is Experience Rating?

Fri, 01 Jul 2016 00:00:00 GMT

It is a credit or debit factor based on your business' loss and payroll history.

Who is eligible?

Fri, 01 Jul 2016 00:00:00 GMT

Effective 1/1/2026: The insured must be in business at least 2 years and meet one of the following premium criteria:

$15,000 unmodified premium in the 1st year of the experience rating period or,
An average of $15,000 unmodified premium in the first 2 years of the experience rating period or,
If an insured has more than 2 years of experience, they must develop an average annual unmodified premium of $7,500 in the experience rating period.

How do Experience Mods affect my premium?

Fri, 01 Jul 2016 00:00:00 GMT

Credit factors will decrease your premium and debit factors will increase your premium.

.80 = 20% premium credit
1.20 = 20% premium debit

What are the elements in the Experience rating plan formula?

Fri, 01 Jul 2016 00:00:00 GMT

Elements of the Experience rating plan formula

ACTUAL LOSS = Total value of claim including reserves.
PRIMARY LOSS = Reduced amount of claim used in formula.
EXPECTED LOSS = Amount of claim your business is expected to have based on your business type (class codes) and size (payroll).
FORMULA FACTORS
- EXPECTED LOSS RATE = Factor used to determine the amount of losses by class code expected by the formula.
- D RATIO = Discounts the expected loss total to arrive at the expected primary loss.
- WEIGHT FACTOR = Percentage of actual losses used in formula.
- BALLAST FACTOR = Stabilizing element that limits modification fluctuation in the formula.

What policy data do you use?

Fri, 01 Jul 2016 00:00:00 GMT

Three complete years of experience ending one year prior to the effective date of experience rating.

Click here to see the example.

Tips for keeping Mods low:

Fri, 01 Jul 2016 00:00:00 GMT

Contact Carrier 60 days prior to valuation date to review status of all open claims. A change in policy effective dates can impact the experience used in future modifications Review audit information - Payroll and Class codes Use carrier loss control and safety programs to help reduce overall losses.

How can I get my modification revised?

Fri, 01 Jul 2016 00:00:00 GMT

Mods are revised only when corrected data is submitted by the carrier.

How low can my Mod factor go?

Fri, 01 Jul 2016 00:00:00 GMT

If you are loss free, your mod factor is as low as it can get for your industry type and size.

Does claim severity affect Mods more than frequency?

Fri, 01 Jul 2016 00:00:00 GMT

Generally claim frequency has a larger impact. Multiple claims that total $10,000 will have a larger impact on your mod than a single $10,000 loss.

Are Mods revised if a claim closes?

Fri, 01 Jul 2016 00:00:00 GMT

Modifications are typically calculated once a year and any changes to a claim during the year are included in the next experience rating year.

How do ownership changes affect my Mod?

Fri, 01 Jul 2016 00:00:00 GMT

Loss history follows a business in most cases whether the business was sold or just the assets. Businesses that share more than 50% common ownership are subject to a single modification factor based on their combined data.

What if I have questions?

Fri, 01 Jul 2016 00:00:00 GMT

For questions concerning open claims:

Contact your agent
Contact the carrier's claim department

For questions about class codes and payrolls:

Contact your agent
Contact carrier's audit department

For questions about the rating formula:

Email MWCIA at info@mwcia.org
MWCIA 952.897.1737

How do we get the electronic version of an Experience Rating?

Fri, 01 Jul 2016 00:00:00 GMT

The electronic version of an Experience Rating is available on the CDX web site. Please note that CDX web site is for only registered carriers. You may also access electronic experience ratings through the Web Experience Mod product located on our website.

Merit Rating Plan

Fri, 01 Jul 2016 00:00:00 GMT

Non-Experience Rated Employers

Non-experience rated employers will receive a credit or debit depending on
1. the number of years they have been insured with the Assigned Risk Plan, and
2. the number of lost time claims they have had within the applicable rating period.
Depending on the above criteria, the following credits/debits will apply
1. Non-experience rated employers who have been insured with the Assigned Risk Plan for the last three consecutive years will be subject to the following schedule based on lost time claims during the applicable rating period:
     0 lost time claims — 33% credit
     1 lost time claim — no credit or debit
     2 or more lost time claims — 10% debit
2. Non-experience rated employers who have not been insured with the Assigned Risk Plan for the last three consecutive years will be subject to the following schedule based on lost time claims during the applicable rating period:
     0 lost time claims — 10% credit
     1 lost time claim — no credit or debit
     2 or more lost time — claims 10% debit

Experience Rated Employers
- Will not be subject to Merit Rating.

How do I obtain an experience modification when moving from a self-insured program to the voluntary market?

Fri, 01 Jul 2016 00:00:00 GMT

Experience of self-insurers may be included in an experience rating. The data must be submitted to MWCIA in an approved format (ERM-6). Refer to the ERM-6 form found under CARRIERS, AGENTS, or TOOLS and selecting "Forms", at https://www.mwcia.org for instructions and along with a copy of this form.

If I change the effective date of my policy, what impact may it have on my future experience modifications?

Fri, 01 Jul 2016 00:00:00 GMT

An employer's rating effective date determines its experience period and generally consists of three completed years of experience ending one year prior to the effective date of the modification. Experience for each of an employer's policies is included if the policy effective date is:

(1) Not less than 21 months before the rating effective date, and

(2) Not more than 57 months before the rating effective date.

An employer's experience period cannot contain more than 45 months (3 3/4 years) of data. The 45 month limitation is a maximum period of time between the expiration date of the most recent policy and the effective date of the oldest policy.

The Experience Period Reference Table displays the policy effective date ranges that will be included in the new experience modification effective date. Click here to view the table.

Whom should I contact to ask about a risk's experience modification factor or experience modifications (mods) in general?

Fri, 01 Jul 2016 00:00:00 GMT

Questions about Experience Modifications can be sent to our Experience Modification Department by emailing unitstat@mwcia.org.

What are the State Per Claim Accident Limitation amounts for a Single Claim: 2022, 2023, 2024, 2025 and 2026 experience modifications?

Fri, 01 Jul 2016 00:00:00 GMT

2022--$230,500
2023--$242,500
2024--$122,500
2025--$119,500
2026--$134,500