What Are Contingent Experience Mods?
Last week, I wrote a somewhat controversial article questioning whether insurance carriers should be fined for reporting Mods late. I received a few emails and comments with one from the WCIRB directing me to an NCCI video on Contingent Experience Mods.

I agree there exist reasons for why a Mod would be filed late by the carrier. However, sometimes Contingent Experience Mods are not finalized (see the 3rd bullet point later in this article) or the carriers report more accurate numbers long after the employer must pay premiums using an incorrect Mod.
Contingent Experience Mods are issued by the rating bureaus to let all concerned parties (employer, agent, underwriter, etc.) that more numbers will be added in later.
Once the carrier reports the data to the rating bureau, the Mod will be revised, and a new Experience Mod will be issued for the employer.
Then again, when is the Mod finalized?
The definition from the two largest rating bureaus on Contingent Experience Mods are:
WCIRB – I could not locate info here at the time of this article.
NCCI – This PDF file from NCCI had a few examples.
From NCCI – Contingent Experience Mods
Contingent: This indicates that an experience rating modification factor was produced with missing Unit Statistical data, but met the minimum data requirements set forth in the Experience Rating Plan Manual.
Since mods are produced months in advance of the rating effective date, it is possible that not all data will be received at the time that the mod is produced.

Contingent mods account for less than 1% of the total rating population. A mod can also be contingent for a unit or a specific unit report level that contains errors that make it ineligible for experience rating use. This alerts the data provider that the unit requires corrections for it to be used for experience rating purposes.
To recap, here are a few things to remember:
- A mod will be either preliminary or final
- Yes, a mod can be both preliminary and contingent
- Yes, a mod can be both final and contingent
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Other Reasons For A Mod Revision
State Rating Values – The reason that we see most often for an Experience Mod revision is the State Rating Values have changed for the Experience Period. This has nothing to do with the rating bureau or the carrier.
These changes occur frequently – more often in certain states. The Department of Insurance or Workers Comp Commission has revised the rating values for a certain policy or rating period.
Defunct Carrier (Receivership) — We do not see this reason as often currently. Ten to 15 years ago, this reason occurred more often. The carrier may not have data reporting personnel in place to report the number to the rating bureau. The carrier may have downsized their data reporting department. The numbers may possibly be reported very late.
Finalized Contingent Experience Mod Effect
If a carrier has not reported a certain year of data or will correct the UNISTAT data in the future, the two main effects to the Experience Mod are:
- Higher than expected claims data – this will increase your Experience Mod (if no change in payroll values)
- Higher than expected payroll data –this will decrease your Experience Mod (if no change in claims values)
If the year the data is not reported was a year with no claims, you should pursue this heavily with the carrier to make sure the data is reported properly to the rating bureau.
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