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.