The Experience Period
Knowing the experience period can help you understand how an experience modification changes over time.
Knowing the experience period, and the payroll and losses developed by policies beginning during the experience period, can help forecast how an experience modification may be impacted when new data is used in the calculation and older data is no longer used.
The experience period begins four years and nine months prior to the effective date and ends one year and nine months prior to the effective date of the experience modification. In most cases, all payroll and losses developed under any policy beginning within the experience period will be used in determining the company's experience modification.
For example, if your anniversary rating date is January 1, 2014, the experience period is April 1, 2009 to April 1, 2012. In the example shown above, all payroll and losses developed by policies beginning during this period will be used to calculate the January 1, 2014 experience modification.
Some data developed during this period will not be used. This includes:
Experience of a policy previously used in determining experience modifications that applied to the risk for more than two (2) years and six (6) months.
Experience developed under construction or erection projects lasting more than 180 calendar days outside the United States, its Territories or the Dominion of Canada.
Experience developed under coverage provided to private residence employees.
Experience arising out of workers' compensation insurance written under the laws of any other jurisdiction.
Experience arising out of any class of insurance other than California workers' compensation insurance.
Experience of a policy written by an insolvent insurer with a required month of valuation on or after the date of liquidation of the insolvent insurer, unless the experience previously was used in a rating and no revaluation is required to be filed pursuant to Part 4, Unit Statistical Requirements, Section VI, Rule 1, of the Uniform Statistical Reporting Plan.
- Unaudited payroll.
To review the Insurance Commissioner's regulations regarding eligibility and the experience period, see the California Workers' Compensation Experience Rating Plan - 1995 in theManuals and Plans section of the WCIRB website (www.wcirb.com).
2014 Experience Modifications
The WCIRB anticipates that all first quarter 2014 experience modifications will be issued within two weeks of receiving the Insurance Commissioner's decision regarding the January 1, 2014 Pure Premium Rate Filing. No Decision has been issued yet.
Find More Online
Learn More about California's Experience Rating System: