A Current Look at Workers' Compensation Ratemaking

The purpose of this paper is to provide a current look at workers’ compensation ratemaking procedures employed by the National Council on Compensation Insurance. The paper has been long delayed since notable changes were anticipated both in determining rate level and classification rates. In 1974 the use of policy year aggregates in rate level calculations was introduced. The National Council is also close to completing a new approach in developing rates for classes with small credibility. This paper will describe in detail the rate level calculations and provide the reader with changes made to date in classification relativity since Ralph Marshall’s paper was revised in 1961. An additional paper would be appropriate detailing the new classification relativity program when it is implemented.