Understanding changes to the New York state experience rating formula

Guide to the NY Compensation Insurance Rating Board’s (NYCIRB) Experience Rating Plan changes, eff. for ex mods with a rating date on or after Oct. 1, 2022.

by Christine Williams , Managing Director, Worker’s Compensation Center of Excellence, US Casualty Practice

The New York State Department of Financial Services approved a new edition of the NY Compensation Insurance Rating Board’s (NYCIRB) Experience Rating Plan Manual effective for experience modification factors (ex mods) with a rating date on or after October 1, 2022. The new rating plan is part of a multi-year evaluation of the experience rating program that the NYCIRB started in 2017. The review found that the credits and debits issued under the current experience rating program are insufficient to adjust premium for individual risks and adequately incentivize workplace safety. They found that well-performing risks were not receiving enough credit, and risks with worse than expected experience were not receiving enough debit. After testing several alternative methodologies, a new plan was developed.

Upon implementation of the new plan, New York withdrew from the NCCI interstate rating plan. All New York risks will be rated based on their New York experience only and receive a New York mod that will apply only to their New York exposure.

• Features a simplified and easier to understand rating plan that eliminates the excess loss ballast value, weighting value, actual excess losses, and ratable excess limitation used in the old credibility weighting calculation.
• Includes a maximum debit modication where the mod is capped based on:
  • The number of claims for employers with up to three claims during the experience period, or
  • The total expected losses in the mod calculation for employers with four or more claims.

  Impact of the new plan

  The new formula’s impact to a particular employer’s mod will depend on the employer’s circumstances, namely, the nature of payroll and claims that enter the mod calculations. In addition to the major mod formula change, the new plan revises provisions that apply to situations that are more specific, for example, multiple claim accident limitation.

  Read our guide for an in-depth analysis of the new rating formula and the potential impacts to you workers' compensation program.