A. EXPERIENCE RATING

Experience rating recognizes the differences among individual insureds with respect to safety and loss prevention. It does this by comparing the experience of individual insureds with the average insured in the same classification. The differences are reflected by an experience rating modification, based on individual insured payroll and loss records, which may result in an increase, decrease, or no change in premium.

  1. The New York Experience Rating Plan for Workers Compensation and Employers Liability Insurance (Plan) applies on a mandatory basis for risks that meet the premium eligibility requirements in Rule 2-A. A policy cannot be cancelled, rewritten or extended for purposes of enabling a risk to qualify for, or avoid application of, this Plan.

  2. Any action taken in any form to evade the application of an experience rating modification determined in accordance with this Plan is prohibited.

  3. The effective date of a change in any rule or rating value is 12:01 a.m. on the date approved for use. Unless otherwise specified, each change applies only from the first Rating Effective Date that occurs on or after the effective date of the change. Refer to Rule 2-B for more information about Rating Effective Dates.

  4. The Standard Workers Compensation and Employers Liability Insurance Policy (WC 00 00 00 A) provides the Rating Board with the authority to examine and audit all records that relate to the policy. The application of this Plan's rules may be affected by the attachment of endorsements found in the New York Workers Compensation and Employers Liability Insurance Manual.

  5. The rules of this Plan are based on policy periods not longer than one year.

    1. A policy issued for a period not longer than one year and 16 days is treated as a one-year policy.

    2. A policy issued for a period longer than one year and 16 days is treated as follows:

      • The policy period is divided into consecutive 12-month units.
      • The Policy Period Endorsement (WC 00 04 05) specifies the first or last unit of less than 12 months as a short-term policy.
      • All manual rules and procedures apply to each such unit as if a separate policy had been issued for each unit.
  1. Statistical Plan
    The Statistical Plan refers to the New York Workers Compensation Statistical Plan. The Statistical Plan sets forth detailed data reporting requirements for individual risk experience. Only 1st, 2nd, and 3rd reports, as well as corrections to such reports, are used in the experience rating calculation. Based on a risk's experience period, an individual unit report may be used in more than one experience rating.

  2. Experience
    The experience used to calculate a risk's modification is comprised of the payroll and losses that are reported according to the Statistical Plan. For purposes of this Manual, payroll and losses may also be referred to as data. The experience used to calculate a modification is determined by Rule 2-E.

  3. Payroll
    The audited payroll or other exposures for each classification in the experience period are those reported according to the Statistical Plan.

  4. Losses 
    Losses as used in this Plan, are incurred losses which are defined as loss payments plus reserves for future payments as of the valuation date. Incurred losses for each classification in the experience period are those reported according to the Statistical Plan.
    1. No loss is excluded from the experience of a risk even if the employer was not responsible for the accident that caused such loss.


      Exceptions:
       
      1. Losses reported with Catastrophe Number 48 are excluded from experience rating calculations. Catastrophe Number 48 claims include all workers compensation claims directly attributable to the September 11, 2001 terrorists attacks with accident dates of September 11 through September 14, 2001.

      2. Losses reported with Catastrophe Number 87 are excluded from experience rating calculations. Catastrophe Number 87 claims include all latent condition claims emanating from the rescue, recovery and clean-up operations at the World Trade Center that were undertaken between September 11, 2001 and September 12, 2002. *

      3. A loss is not to be included in the experience of a risk if it is not required to be reported to the New York Workers’ Compensation Board as defined in Section 110 of the New York Workers Compensation Law provided that the employer pays the claim in the first instance or reimburses the carrier for the treatment rendered to the employee.
         
      Note: An employer is not required to file a claim notice with the Workers’ Compensation Board if the accident or illness requires ordinary first aid or causes loss of time from work of only one day beyond the working day or shift on which the accident or illness occurred.

    2. Loss amounts may be limited in the experience rating calculation. For application of a loss limitation, refer to Rule 2-C-13
  1. Entity
    An entity is an individual, partnership, corporation, unincorporated association, fiduciary, or other legal entity.

  2. Risk
    A risk is all entities eligible for combination under this Plan, regardless of whether insurance is provided by one or more policies or insurance carriers. A risk may be:

a. A single entity, or
b. Two or more entities that qualify for combination according to Rule 3-D.

  1. Subject Premium
    Subject premium is reported according to the Statistical Plan. For experience rating purposes, subject premium, developed for an individual risk during its experience period, is used to determine a risk's eligibility in accordance with Rule 2-A.
     
  2. Unity (1.00) Factor
    A unity (1.00) factor may apply to a risk for reasons including, but not limited to:

    • It does not qualify for experience rating. Refer to rule 2-A for premium eligibility requirements.
    • It does not meet the minimum data requirements. Refer to Rule 4-C for an explanation.
    • It is a new business with no data available for calculation of an experience rating modification.
    • It qualifies for experience or merit rating, with the calculation resulting in a 1.00 modification.
    • Data could not be provided as a result of an ownership change. Refer to Rule 3-E for an explanation.  

      * Effective August 14, 2006 to comply with the provisions of A.11944 (Chapter 446 of the Laws of 2006)
  1. The Rating Board determines the applicability of all Plan rules.
  2. The experience rating modification is calculated, issued and, if necessary, revised by the Rating Board.
  3. Unless otherwise provided by this Plan, experience rating modification issuance and revision is limited to the current and two preceding experience rating modifications.
  4. The calculated experience rating modification factor is applied by the carrier(s) in accordance with this Plan, other applicable rules, statutes, and regulations.
  5. The Rating Board publishes experience rating information for each eligible risk on a secure website. The carrier of record is provided access to the experience rating worksheets for its own insureds on this site. Producers, other carriers and all other registered subscribers may also access the website, but only the experience modification is available for these users. Registration for access to this website can be obtained by contacting the Accounting division of the Rating Board.
  6. Individual employers, carriers, and other authorized representatives of record may request rating worksheets, as well as Employer Experience Reports, by contacting the Operations Division of the Rating Board. Letters of Authority must be furnished to the Rating Board for non-authorized representatives of employers either:
    1. On the employer’s stationery, authorizing such individuals as their representative and must be signed by an officer, partner, or principal of the employer; or
    2. Through an online application available on the Rating Board’s website at www.nycirb.org.

An insured, or its representative, (hereafter referred to as "insured"), may appeal the application of a rule or procedure contained in this manual. Rules or procedures are defined as those determinations, either by a carrier or the Rating Board, which establish the variables that define the policy conditions. Examples include: classification codes, ownership information, premium audits, and any other determination which may affect the policy.

To be considered for review, a written request explaining the reason(s) for the appeal must be submitted to the Rating Board. Upon receipt of the request for review, the following actions will be taken:

  1. A staff member will review the request and respond to the insured within sixty (60) days, in writing, acknowledging receipt of the request, granting the insured its request or sustaining its original ruling.

  2. The insured, if not satisfied with the outcome in 1. above, may then request, in writing, a conference with members of the Rating Board staff. The request must state the nature of the complaint and contain any supporting documents. The appropriate Department Vice President or his or her designated representative, if appropriate, will preside at the conference.

  3. If the dispute is not resolved at the conference, the insured may then appeal to the Underwriting Committee of the Rating Board for a hearing to consider the staff ruling. This appeal must be in writing and must specify the reason(s) for the appeal and the nature of the complaint.

    Following, receipt of the appeal, the insured will be notified regarding the time and place for the hearing. The appeal will be heard at the next Underwriting Committee meeting for which appropriate time can be given for this matter.

    Subsequent to the hearing, the insured will be advised, in writing, of the Underwriting Committee decision regarding its complaint.

  4. If the Underwriting Committee ruling is not satisfactory to the insured, the insured may then request a hearing at the New York State Department of Financial Services to consider the decision of the Rating Board's Underwriting Committee.

  5. The New York State Department of Financial Services decision may be appealed to a higher court, by either the insured or the Rating Board.