Last month, the rate impact of recent Florida Supreme Court rulings on the state’s workers compensation system was in the hands of regulators, as the Office of Insurance Regulation (OIR) decided on the National Council on Compensation Insurance’s (NCCI) filing seeking a 19.6 percent rate increase.
You might have heard of the term “experience modification factor” in reference to your workers compensation premiums but don’t have a clear idea of what this term means. Don’t worry. You’re not alone. An experience modification factor is a unique rating factor that modifies a company’s workers compensation premiums based on the company’s individual loss experience relative to other employers that are using the same workers compensation class codes. In other words, it’s an actuarially based method for determining if a specific risk’s loss experience is better or worse than average.