Experience Rating Plan Changes in 2017

Experience Rating


Take note: the Experience Rating Plan changes in 2017!

Experience rating is a system that benchmarks an individual employer against others in its industry based on that employer’s historical claim experience. The experience is expressed as a percentage and is referred to as an experience modification or X-Mod. This is then applied to an employer’s workers’ compensation premium.

Generally, an experience modification greater than 100 percent increases the cost of the employer’s workers’ compensation premiums. Similarly, if an experience modification is less than 100 percent, its cost is lowered. The Workers’ Compensation Insurance Rating Bureau of California administers the experience rating system and produces X-Mods for rated employers.

Following several years of research and outreach, in 2015 the WCIRB proposed changes to the experience modification formula that were adopted by the Insurance Commissioner and will take effect on January 1, 2017.

Below are some experience rating facts that you may or may not know!

  • Experience rating provides a financial incentive for workplace safety
  • It is a comparison of an employer’s loss history to that of similar companies that are of similar size
  • The number of claims (frequency) and the cost of those claims (severity) impacts an employer’s experience modification
  • Part of the California Code of Regulations and approved by the California Insurance Commissioner
  • Required for businesses that meet the eligibility threshold
  • Approximately 120,000 employers are experience rated in California

To learn more about how the experience rating plan changes in 2017, click here! For all of your insurance needs to see your business through the 2017 and beyond, contact Chambers & Company Insurance Brokers today to secure the right policies for you.


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