Introduction to the National Council on Compensation Insurance Experience Rating Plan and Its Actuarial Methodology

Abstract
Workers compensation individual risk experience rating, and particularly the National Council on Compensation Insurance’s (NCCI’s) Experience Rating Plan (ERP), date back to the first years of workers compensation laws in the United States and the Casualty Actuary Society, in the 1910’s and 1920’s (see early volumes of Proceedings of the Casualty Actuarial Society, available at www.casact.org). What makes workers compensation experience rating special is the central role of credibility methods and the emphasis on a predictive perspective from these earliest years. It is also unique in its universal adoption in the United States. Today (2013), all states and the District of Columbia, require some type of workers compensation experience rating. All but 9 states allow for the use of NCCI’s ERP for interstate rating.

Keywords: Workers compensation, individual risk experience rating

Volume
Winter, Vol. 1
Page
1-49
Year
2014
Categories
Actuarial Applications and Methodologies
Ratemaking
Experience Rating
Business Areas
Workers Compensation
Publications
Casualty Actuarial Society E-Forum
Authors
Jonathan P Evans