Focus on Comp: MA Rating Point (Quietly) Raised

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The MA Rating & Inspection Bureau (WCRIBMA) has raised the amount of an individual claim included in calculating the experience mod. Prior to July 2016, the cap on individual claims  was $175,000. The cap is now $210,000, second highest in the New England region; only Connecticut has a higher cap, currently at $260,500. For policies beginning after July 1, 2016, the higher rating point will impact insureds with losses exceeding the old rating point, provided the losses occurred in policy years 2012, 2013 or 2014.

The MA Rating & Inspection Bureau (WCRIBMA) has raised the amount of an individual claim included in calculating the experience mod. Prior to July 2016, the cap on individual claims  was $175,000. The cap is now $210,000, second highest in the New England region; only Connecticut has a higher cap, currently at $260,500.

For policies beginning after July 1, 2016, the higher rating point will impact insureds with losses exceeding the old rating point, provided the losses occurred in policy years 2012, 2013 or 2014. (For PY 16 policies beginning between January 1 and June 30, the old cap remains in effect.)

There has been no announcement thus far from the Bureau regarding this change. In fact, the change is revealed in a footnote – literally, a footnote! – toward the end of the Bureau’s updated experience rating plan. To be sure, because losses above $5,000 are discounted substantially in the mod calculation, the $35,000 increase will likely push mods up by a few points at most.

No Surprises
Workers comp is often the most volatile and painful line of business insurance, especially when the experience mod goes up. In order to be on top of any potential surprises, agents should review loss runs for claims above $175,000 that are included in the PY 16 policy.

Renaissance Alliance Agents: Once these claims have been identified, you can send me the loss runs along with the most recent experience mod calculation sheet; I will analyze the impact of the new rating point. Then it may be an opportune time to visit insureds where the mods are going up. We may not be the bearer of good news, but at least we will be able to eliminate the mystery of where the increase came from.

Jon Coppelman
Senior Workers Compensation Consultant

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About Renaissance Alliance

Renaissance Alliance is the premier alliance for independent property casualty agencies. Founded by agents for agents in 1999, we are a pioneer in agency groupings, offering far more than expanded markets and profit share. Distinct from agency aggregators, we provide state of the art technology solutions, a full-time staff of more than 90 industry experts and a proprietary agency growth acceleration process that delivers superlative results.

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