NCCI Experience Modification Factor 2024 Changes FAQs

国民赔偿保险协议会(NCCI)正在修改2024年的经验修正系数. These changes are slated to go into effect on each state’s regular filing date on or after Nov. 1, 2023.

本文提供了NCCI对有关新变化的常见问题(FAQs)的回答. 

General FAQs

What is changing?

The formulas and general structure of the Experience Rating Plan (Plan) remain unchanged. Certain underlying components will be impacted:

• Primary/excess loss split point (split point)
• State per claim accident limitation (SAL) and United States Longshore and Harbor Workers’ Compensation (USL&HW) per claim accident limitation
• G value
• Credibility parameters underlying calculation of the weight (W) and ballast (B) values
• Discount ratios (D-ratios)

When will the proposed changes in Item E-1049 become effective?

本条款将对经验评级修改生效，评级生效日期为每个州提交预期损失成本/费率后, which are generally effective in 2024. The specific state rating effective dates span from Nov. 1, 2023, to Aug. 1, 2024, with the most common effective date being Jan. 1, 2024.

Why are these changes being proposed now?

NCCI periodically evaluates Plan methodology and performance. During the latest review, NCCI identified some opportunities to improve Plan performance, with revisions that will result in:

• A more accurate and predictive experience rating modification
• 经历评级调整，以反映在不同成本水平的州间更公平地确定主要损失和超额损失
• More comparable Plan performance in states with claim costs that vary significantly from the countrywide average
• 在不牺牲预测准确性的情况下，体验对大型异常值索赔不那么敏感的评级修改
• More consistent calculation of each employer’s expected claim count, which is expected to result in more appropriate credibility being assigned to each employer’s loss experience.
• Recalibrated credibility parameters underlying the weight and ballast values to increase equity across employers
• The elimination of complex calculations where no value is added

Where is the item being filed?

Item E-1409 is being filed in all NCCI states (including AK, AL, AR, AZ, CO, CT, DC, FL, GA, HI, IA, ID, IL, KS, KY, LA, MD, ME, MO, MS, MT, NE, NH, NM, NV, OK, OR, RI, SC, SD, TN, TX, UT, VA, VT and WV). It will be recommended to the following independent bureau states for their consideration: IN, MA, MN, NC and WI.

How will these changes impact premiums?

These changes are expected to be premium-neutral in total. The overall average experience rating modification in each state is not expected to be impacted by these changes. 个别雇主一级最初的波动可能被损失经验的变化和定期更新评级值所抵消. Ultimately, 该计划的更新预计将导致该计划的整体表现得到改善，并增加个体雇主之间的公平.

Are these changes expected to move experience rating modifications further from unity (1.00)?

For any given employer, the experience rating modification may increase, decrease or stay the same. Overall, 对经验评级修正计算的拟议变更预计将使计划的绩效得到改善，并在各州之间更具可比性.

Do these changes affect the participation of independent bureaus that participate in interstate experience rating? No. All of the proposed changes fit within the existing Plan framework (that is, a statewide split point). 无论其他局是否决定对自己的经验评级值和方法采取类似的改变，州际经验评级将继续不受干扰

Rating Value Changes

What is a split point?

主要/超额损失分割点将每项历史索赔的损失分为两层:主要损失(在分割点以下的损失)和超额损失(在分割点以上的损失)。.

For example, if the split point is $15,000, a claim totaling $50,000 would contribute $15,000 to the primary layer and $35,000 to the excess layer. Primary losses receive a greater weight than excess losses in the experience rating modification formula. Because of this, primary losses have a greater impact on the experience rating modification.

The split point is currently a countrywide value ($18,500) that is updated with each state’s annual loss cost/rate filing to reflect changes in countrywide claim costs.

How is the split point changing?

拟议计划变更的一个关键改进是，通过各州具体的分界点，增加了对各州成本水平差异的认识. Under the current Plan, the split point is based on a common level and does not vary across NCCI states.

For example, instead of the current split point value of $18,500 applying to all states, under the proposed Plan, a state with higher-than-average claim severity may have a split point value of $25,000, while a state with lower-than-average claim severity may have a split point value of $15,000.

What is the benefit of a state-specific split point?

When NCCI evaluated the performance of the current Plan across various states, it became apparent that additional recognition of state severity differences was an opportunity for improvement.

使用特定于各州的分割点值来反映各州的成本差异，目的是在经验评级修改计算中更好地调整各州给予实际雇主损失经验的权重. In turn, 预计这将在索赔费用与全国平均水平差异很大的州产生更好的和更具可比性的计划绩效.

Will the new split point value continue to be updated each year?

Yes. To keep up with changes in claim costs and preserve alignment with other experience rating parameters, 预计分割点值将与每个州的年度损失成本/费率归档同时索引. This is consistent with all other rating values used in the calculation of the experience rating modification.

What is the state per claim accident limitation (SAL)?

The SAL is the maximum dollar amount from any one claim that may impact the experience rating modification. For example, if the SAL is $200,000, then any claims with incurred losses above that amount would be limited to $200,000 for the purpose of calculating the experience rating modification. Currently, the SAL is calculated as the state average cost per case times 25. The SAL can also be derived at 10% times the state reference point (SRP), where SRP is calculated as the state average cost per case times 250.

SAL的目的是减少巨大的异常索赔对经验评级调整的影响，因为这些美元预计无法预测未来的损失经验超过某一点.

How is the SAL changing?

The SAL will be calculated using the 95th percentile of lost-time claims for each state. This new methodology is expected to result in lower limits in all states, 在不牺牲预测准确性的情况下，使经验评级修改对大型异常值索赔不那么敏感.

为什么期望SAL在各州之间更加一致，而建议的分裂点因州而异?

In short, the values have different purposes. SAL用于减少大额索赔对经验评级调整的影响，因为大额异常索赔通常不能预测未来的损失经验. 使用州一级的第95个百分位数产生的SAL预计将影响最大的5%的损失时间索赔. On the other hand, 分割点意味着将与每个索赔相关的美元分割为主要层和多余层——在分割点以下的美元进入主要层, while those above the split point belong to the excess layer. 提议的分界点是这样建立的，它们导致各州分配给基层的总损失美元份额大致相同. In this sense, the updated split points are more consistent across states as well.

Are there any changes to the other single-claim or multiple-claim limitations?

The USL&每项索赔事故的人力资源限额正在更新，以反映属于F类的损失时间索赔的第95百分位数. Similar to the SAL change, this new methodology is expected to result in a limitation that is more stable over time.

国家多次索赔事故限额将继续按相应的每次索赔事故限额的两倍计算. 疾病损失限额将继续以本计划中详细说明的核定每次索赔事故限额的倍数计算.

No other accident limits are changing at this time.

What is the G value?

The G value represents state average claim severity (in thousands of dollars). Its primary use is in the determination of an employer’s expected claim count, which serves as the basis for the credibility assigned to its primary and excess loss experience. The G value is updated with each state’s annual loss cost/rate filing.

How is the G value changing?

G的计算将进行修订，以反映事故限制和仅医疗损失减少70%(根据经验评级调整[ERA]), where applicable.

In the calculation of an employer’s expected claim count, the employer’s expected losses are divided by the G value (average claim severity). Because expected losses already reflect ERA and accident limitations, 计算G的方法的改变使每个雇主的预期索赔数的计算更加一致. In turn, this is expected to result in more appropriate credibility being assigned to each employer’s loss experience.

What are the credibility parameters?

W值和B值影响雇主实际损失对经验评级修正的影响程度. The W and B values are determined by a set of 10 credibility parameters, and these parameters have not been updated in over two decades.

How are the credibility parameters changing?

建议的可信度参数作为W值和B值的基础已被重新校准，以增加雇主之间的公平性.

What about the premium eligibility threshold? 

 To qualify for experience rating, an employer’s subject premium must meet or exceed the state’s minimum eligibility amount. This Plan update proposes no change to the current premium eligibility threshold indexing methodology

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