An Actuarial Analysis of Simplified Experience Rating Adjustment (SERA)

Recently the National Council on Compensation Insurance has significantly revised the Experience Rating Plan for Workers' Compensation. This followed a detailed actuarial study of the performance of the current plan and possible alternatives. The new plan that is the result of this study has been given the acronym SERA (Simplified Experience Rating Adjustment). This note compares SERA to the current experience rating plan. While the NCCI study is mentioned in passing, the details of that interesting study are beyond the scope of this note. While the tables at the end are based on the SRP for one state (Massachusetts) the overall pattern and conclusions should follow in general. Credibility/LOB-Workers Comp/Ex/Ind. Risk Rating Plans