Experience Rating

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

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

Effective 1/1/2024: The insured must be in business at least 2 years and meet one of the following premium criteria:

• $14,000 unmodified premium in the 1st year of the experience rating period or,
• An average of $14,000 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 $7,000 in the experience rating period.

1. 2019--$442,000
   
   
2. 2020--$432,000
   
   
3. 2021--$445,000
   
   
4. 2022--$461,000
   
   
5. 2023--$485,000

• 2019--$221,000
• 2020--$216,000
• 2021--$222,500
• 2022--$230,500
• 2023--$242,500

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

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

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.

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

Click here to see the example.

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.

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

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

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.

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

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.

For questions concerning open claims:

1. Contact your agent
2. Contact the carrier's claim department

For questions about class codes and payrolls:

1. Contact your agent
2. Contact carrier's audit department

For questions about the rating formula:

1. Email MWCIA at info@mwcia.org
2. MWCIA 952.897.1737

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.

1. Non-Experience Rated Employers
1. 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.
2. 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
2. Experience Rated Employers
   • Will not be subject to Merit Rating.

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.