Workers Compensation Experience Rating Formula

What is the average cost per claim for losses used in experience rating in Illinois?


Published in the NCCI Experience Rating Plan Manual, the Illinois Table of Expected Loss Rates and Discount Ratios includes includes the Table of Weighting Values and Table of Ballast Values, in addition to several limiting factors that are used to determine your experience rating. 

According to the Experience Rating Plan Manual:

Experience rating modification factors determined by the formula in Rule 2-D-1 are subject to a cap if the debit modification exceeds a specific amount. The risk-specific maximum debit modification is determined as follows:

Maximum Debit Modification = 1 + {(0.00005)[(Total Expected Losses) + (2)(Total Expected Losses)/(G)]}

The maximum debit modification for an interstate risk is limited to the cap for the state with the largest amount of expected losses.

“G” is a factor equal to a state's average cost per claim for losses used in experience rating, divided by 1000.   For Illinois in 2010, "G" is 13.70. 

Therefore, the average cost per claim for losses used in experience rating in Illinois is $13,700.

 

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