Experience Rating Plan Credibilities

For some time past certain criticisms have been made of the Compensation Experience Rating Plan. These have touched on various aspects of the Plan; some of them have been directed to the way in which the Plan works in particular instances. Other criticisms of the Plan have been in respect of some of the more debatable questions such as the period of experience to be used and the swing of the plan. This is the old question of Stability vs . Responsiveness and some of the critics have shown a surprising tendency to ignore the essential conflict between these two qualities. With these criticisms, those responsible for setting up and administering the Plan can doubtless deal. It is not in any way my intention to do more than mention them here as leading up to the subject of this paper. The Experience Rating Plan has recently been the subject of intensive studies by the responsible committees with the objects of seeing what there is of merit in the criticisms and of endeavoring to revise the Plan to make it better adapted to present-day conditions. The lessons gained from the, on the whole, successful working of the Plan over a large number of years are, of course, the principal guides in such studies.