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Getting Ready for 2017 Experience Modifications

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Getting Ready for 2017 Experience Modifications

August 10, 2016

After several years of research and outreach, the WCIRB is poised to begin publishing the first experience modifications based on the 2017 variable split plan. This is anticipated to occur shortly following the Insurance Commissioner’s decision on the January 1, 2017 Regulatory Filing. Varying the split point in the experience rating formula based on the employer’s size produces more accurate predictions of an employer’s future experience and furthers the primary objective of experience rating providing employers a direct financial incentive to improve workplace safety and reduce the number of work related accidents. The variable split plan applies to experience modifications effective on or after January 1, 2017. 

To inform and prepare the workers’ compensation insurance community on the changes associated with the 2017 variable split plan, the WCIRB has been hosting a series of Mod Talks webinars. This edition of News and Notes highlights some of the Frequently Asked Questions received during the webinars.

Why was it necessary to change the current experience rating formula?

The current formula, using a $7,000 fixed split point, has not been updated since it was adopted in 2010. WCIRB research determined that in California a one-size-fits-all approach does not work as well as using split points that are based on the size of the employer. 

What is the expected impact of the change?

While this is a significant change to how experience modifications are calculated, the impact for most employers will be modest. Approximately 20%, or over 100,000, of employers in California are experience rated. Most experience rated employers will see either no change or a small increase or decrease in their experience modification under the new formula. Some, however, will see a more significant impact. The employers that may realize a significant reduction in their experience modification will generally be those with a shock loss or a large claim. The employers that may experience a significant increase generally have a high frequency of claims. 

What are the benefits of the change?

The new formula offers long-term benefits for everyone. The variable split plan is more accurate than the fixed split plan in predicting a policyholder’s future losses. It is also less volatile than the current fixed split plan, meaning that employers are less likely to see a large increase in their experience modification as a result of a single large claim. It also creates the potential to simplify the currently complex formula down to just three terms in the future, making it easier to understand for stakeholders.

What are the next steps?

On July 15th, the Insurance Commissioner opened the 45-day public comment period regarding the WCIRB’s January 1, 2017 Regulatory Filing, which included proposed 2017 experience rating values based on the variable split plan. Sometime after the public comment period closes on August 29, the Insurance Commissioner will issue a Decision on the Regulatory Filing, and the WCIRB will begin publishing January 2017 experience modifications.

How can I get ready for 2017 experience modifications?

Sign Up for X-Mod Direct®
The X-Mod Direct feature in WCIRB Connect automatically notifies users of any changes to an experience modification for a specific policyholder. Setting an alert is easy and free. While logged into WCIRB Connect, from the Policyholder Details screen, look for the "Subscribe to X-Mod Direct" ribbon button at the top of the screen. Click on the button to subscribe and receive an email notification whenever an experience modification is published for this account. 

2017 Experience Modification Estimator
Agents, brokers and insurers can use the WCIRB’s 2017 Experience Modification Estimator to better understand the impact that the 2017 changes to the experience rating formula might have on a policyholder’s experience modification. Access the Estimator at the Experience Modification Estimator page in the Learning Center of The following are resources for assistance on how to use the Estimator: 

  • Experience Modification Estimator Help Guide – Look for the Help Guide PDF embedded in the Estimator spreadsheet, which has detailed information on how the Estimator works, what data is being used in the calculations, and an explanation for each of the results tabs. 
  • Experience Modification Estimator Shortcut Sheet – Download this helpful quick sheet that illustrates each section of the Estimator and includes tips on how to use it. 
  • Video Demo – View a video recording of the recent WCIRB Mod Talks webinar which included a demo of how to input payroll, classification codes, and loss data to estimate an experience modification based on the variable split plan.   

Related Information

Rating 2017 Page
Regulatory Filings
WCIRB Mod Talks