D-Ratio Is Associated With Each Class Code
D-Ratio is also known as the discount ratio. NCCI or your State Rating Bureau uses the discount ratio to determine the portion of the losses that are expected to be primary losses ($15,000 or less).
A D-Ratio can vary by the rating state and the Workers Comp classification code.
The chart shows an example It is the ratio of the primary expected losses plus a discounted value of large losses divided by the total expected losses.
It will appear as a two decimal figure on an employer’s Experience Modification Rating Sheets. The ratio results from a series of actuarial calculations by NCCI or the State Rating Bureaus.
The ratio is located in the third column on all rating bureau sheets after the Classification Code and Expected Loss Ratio (ELR). For every Classification code in each state for each year in the Experience Period, there is an associated D-Ratio.
I was examining a group of E-Mod Rating sheets today for a Personnel Agency. Their D-Ratios varied from .26 to .51. Most of them were in the .40 to .45 range.
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