| EXPERIENCE MODIFICATION FACTOR | = |
(Credible Actual Primary Loss + Credible Actual Excess Loss)/Expected Loss |
| Where | ||
| Credible Actual Primary Loss | = | Actual Primary Loss x Primary Credibility |
| + | Expected Primary Loss x (100% -Primary Credibility) | |
| Credible Actual Excess Loss | = | Actual Excess Loss x Excess Credibility |
| + | Expected Excess Loss x (100% - Excess Credibility) |
| ACTUAL PRIMARY LOSS | = | 50,280 | x total loss |
| (Total loss + 30,168) |
| Total Loss | Type of Claim | Total Loss (after deduction) | Primary Loss | Excess Loss | |||||
| 200 | Medical Only | 0 | 0 | 0 | |||||
| 2,500 | Medical Only | 170 | 170 | 0 | |||||
| 2,500 | Time Loss | 2,500 | 2,500 | 0 | |||||
| 25,000 | Medical Only | 22,670 | 21,572 | 1,098 | |||||
| 25,000 | Time Loss | 25,000 | 22,785 | 2,215 | |||||
| 100,000 | PPD | 100,000 | 38,627 | 61,373 | |||||
| 2,000,000 | TPD Pension | 253,784 | 44,938 | 208,846 | |||||
| Note: | The deduction, $2,330, is twice the average case incurred cost of these types of claims occurring during the three-year period used for experience rating. On average this results in reducing the average actual loss about seventy percent for these types of claims adjusted. This is done to help make the transition between the two different experience rating methods better by helping make the change in experience factor reasonable for small changes to the actual losses. The $2,000,000 loss is limited by the Maximum Claim Value before the reduction of $2,330 is applied. |