Discounted Experience Mod Likely A Rating Bureau Adjustment
We received this email over the weekend concerning a discounted experience mod. The West Virginia company found the CutCompCosts blog on Google.
Our agent informed us that our E-Mod (Experience Modification Factor) for next year was going to be 1.29. When we received our policy quote the E-Mod was 1.03. Can the new E-Mod actually be correct? Did we receive a discounted Experience Mod for some reason? The question was paraphrased for readability as it was much longer. The answers are::
- Something may have occurred between the time that your agent informed your company of the 1.29 E-Mod and the policy renewal. This rarely happens. Your E-Mod was tallied six months before your policy renewal date.
- Your agent and new carrier cannot arbitrarily discount your Mod at will. I have never seen a premium auditor discount an E-Mod at the final premium audit.
- NCCI – the rating bureau for WV-is the organization responsible for your E-Mod.
- You may inquire with NCCI to see what your (and this is important) Final E-Mod for your policy was calculated for the corresponding year.
- The carrier’s premium auditor would adjust the E-Mod back to 1.29 at the final premium audit – usually 30 days after policy expiration. This increase would cause your final premium bill to be much larger than expected with the lower E-Mod.
- Carriers and in turn, agents sometimes make inadvertent mistakes. It is advisable that you check with your agent and NCCI.
It is advisable for employers to always review their policies front to back. This WV employer likely saved itself a large premium bill by reading their WC policy and asking questions. Always read your old expiring policy when looking over your new policy to see if there have been any major changes. Surprises equal $$.
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