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Experience Modification Rate Review

Inflated Mods cost you money and business.  
EMR mistakes are the #1 Error we find.

If you need a lower Experience Modification Rate RIGHT NOW, there is ONLY 1 WAY TO REDUCE YOUR MOD IMMEDIATELY.  That is through and independent audit to identify the reporting errors and get corrections processed. 

All the other mod reduction strategies involve either changing programs ("to buy down your mod") or implementation of new safety programs to reduce claims.  Those are great opportunities to reduce your experience modification factor.  But, none of the benefits will show up in your experience modification rate until your 2nd renewal from now (email or call if you'd like me to explain this for you).

And, there are Experience Modification Rate errors.


These errors are frequent; much more so than you imagine. And, those errors are very expensive; inflating premiums for 3 years or more.  


As stated on our Premium Audit page, the frequency of errors are what allow us to work on a contingency; not billing clients for our time, but, rather, a percentage of the refunds we obtain for you.


Regarding Experience Modification Rating errors, don't just take our word for it.  Listen to what NCCI says is the 2nd most common reason for revised experience mods; "correction reports!"  Specifically, corrections of payroll and claims data.

Experience Modification Rate Review

Even though NCCI says that correction reports are the 2nd most common reason why experience mods are revised, we suspect this is just the tip of the iceberg with Experience Rating Errors far more common. 


And, the reason you may have never discovered mistakes in your own Experience Modification Rate, is that most don’t understand how many moving parts there are to promulgating an accurate experience mod.  Your experience modification rate is important.  And, conducting a proper audit of an experience mod is very time intensive and requires a number of documents.  













So, when you or your broker perform an experience mod review what is the objective?  To make sure your experience mod is correct, right?  

But, in all likelihood, your review is performed with as little information as your experience mod worksheet and currently valued loss runs.  Maybe some Modmaster reports telling you what your experience mod would be without any claims, breakdown of the claims most impacting your mod, or some other what-if analysis.  Good information.  But is your experience modification rate correct?

​Here is a list of of what you need in front of you to determine whether or not your experience mod is accurate:

·      Experience mod worksheet

·      Loss runs for the last 5 years valued on your valuation date (the date your insurance carrier is supposed to transmit your data to NCCI) 

·      Final audit statements for the last 3 years

·      Auditor's worksheets for the last 3 years

·      Copies of (or expert knowledge of) Experience Rating Plan manual rules and applicable state rules and regulations

At least one set of necessary documents, the Auditor’s Worksheets, are considered confidential by insurance companies and won’t be released to anybody but an officer of your company.

Even with the necessary documentation you still need both the necessary technical knowledge and the time to do a thorough analysis.  It can take many days (for someone who knows what they're doing) to perform a comprehensive review depending on the size of your company, number of claims, number of states where you operate, number of business units, classifications, etc.  

Learn More By Reading Our Posts On Experience Modification Rating.  Click The Arrow To Scroll Through.


Your experience modification rate is a measurement of your actual claims experience relative to your expected claims experience. Expected claims is based on your company size (payroll) and how your employees are classified.  If your employees are graphic designers or architects, you are going to have insignificant expected work comp claims compared to, say, a roofer.


​So, accurate classification of employees and determination of work comp payroll (both determined by your insurance company auditor) is as important to the determination of your experience mod as claims data.  The Auditor's Worksheets (mentioned above) are important because, if your insurance carrier gives you the complete report, they contain a Description Of Operations.  The DOO should include a list of class codes your auditor thought applicable to your operations and why.  Sufficiently detailed worksheets should also demonstrate how the auditor arrived at work comp payroll by class code and by state (if multi state operation). 

Also keep in mind that claims may have unique circumstances that require different reporting depending on the state in which they are reported. This is why it's important, at a minimum, to have at least a good working knowledge of the rules in those state where your business operates.​

"Liberty Mutual Accused Of Inflating
Comp Premiums"

Example of common insurance company oversight; not reporting recoveries.

Insurance Company Experience Modification Rate Errors

​In order to have a proper mod review whose goal is to determine your experience mod's accuracy, you need to have an auditor who specializes in workers' compensation insurance perform a comprehensive premium audit on your program.  While they're at it they may find cost saving opportunities beyond your experience mod too.  It would be a good idea to take a look at our warning signs and reach out if you'd like assistance for any other reason.  

Stuart Cytron


(314) 757-8079 t

(314) 480-7171 f

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