Experience Rating Adjustment (ERA)

Experience Rating Plan allows a 70% discount for medical only claims.; Paying small claims

  • The Experience Rating Plan is​ adjusted in Item Filing E-1339 to accomplish three goals:
  • reduce the weight on medical only losses
  • increase the weight on excess losses
  • make the split of actual losses between primary and excess to be inflation-sensitive 

Medical only claims are reduced by 70%, so only 30% of these claims (both actual and primary) will be used in the rating calculation. The rating worksheet now separately shows injury type 6, which are the claims reduced by 70%.


$60,000 Medical Only Claim
 TotalPrimary (portion up to $18,000)Excess (portion > $18,000)
Before ERA :$60,000$18,000$42,000
After ERA (70% reduction):$18,000$18,000$0

New rating factors were effective 7/1/98. The Expected Loss Rates (ELRs) and Discount Ratios (D-ratios) were slightly lower than those effective 1/1/98 to compensate for the reduction in medical only claims in the formula.

The Credibility Coefficients: Primary Credibility Ballast (B) and Weighting Value (W) were revised to increase credibility for excess losses. This increases the responsiveness to excess loss for the larger insured. In the formula, the revision increases the portion of actual excess losses.

A split between primary and excess losses for 2022 ratings is  $18,500. Losses under $18,500 go into the formula at full value. The split point will be evaluated annually, with changes to be effective with our January 1 rate filing.