NCCI Experience Rating Plan

Question 1

Eligibility for NCCI experience rating

Answer 1

Satisfies one of the following:

Most recent 2 years’ total manual premium > column A

Average manual premium > column B

Question 2

NCCI mod

Answer 2

Question 3

Maximum debit mod

Answer 3

Max mod = 1 + (EG + 2E)/20000

G = 7 for Alabama

Question 4

W in NCCI experience rating

Answer 4

Weighting value

Limits weight of actual excess losses

Question 5

B in NCCI experience rating

Answer 5

Ballast value

Used to provide stability by limiting impact of any single loss on the mod

Question 6

D-ratio

Answer 6

Expected primary percentage of expected losses

Essentially a LER for a deductible

Question 7

Limit on NCCI losses, medical only

Answer 7

Split at $5K, then multiply by .3

Question 8

Limit on NCCI losses, SAL

Answer 8

Cap primary at 5K, excess at MSL - 5K

Question 9

Limit on NCCI losses, multiple claim SAL

Answer 9

Limit primary loss at 10K, excess loss at SAL - 10k

Question 10

Limit on NCCI losses, disease losses

Answer 10

Apply all other caps first and cap TOTAL disease loss at

3x SAL + 1.2E

Cap primary amount of disease losses at 10K + 0.4E_P

Question 11

Application of experience mod

Answer 11

Since it is applied after manual premium, mod differentiates loss potential for risks within a class, not between classes