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.
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.
Senior Workers Compensation Consultant