experience modifier
A factor developed by measuring the difference between the insured's actual
past experience and the expected or actual experience of the class. This factor
may be either a debit or credit and, therefore, will increase or decrease the
standard premium in response to past loss experience. When applied to the manual
premium, the experience modification produces a premium that is more representative
of the actual loss experience of an insured. An employer with average experience
has a modifier of 1.0 and would pay the manual premium. Employers with poorer
loss experience would have modifiers greater than 1.00 and would pay more than
manual premium. Those with good experience would have modifiers below 1.00 and
pay less than manual premium.
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