Experience Modification Factor - Workers Comp Term Of The Day

There has been much discussion in the last week on E-Mod or X-Mods. My definition is your company's Workers Comp credit score.

From NCCI - Experience modifier (mod) is a multiplier applied to the premium of a qualifying policy and provides an incentive for loss prevention. The mod represents either a credit or debit that is applied to the premium before discounts. If your company’s loss experience is more costly on the average than other company’s loss experience in your industry, the result is a debit mod, or surcharge, on premiums. If your company’s experience is less costly than the industry average, you will receive a credit mod, or discount, on your premium. The acronyms are Mod, E-Mod, or Emod.

From CA's WCIRB - which are expressed as a percentage, compare the loss or claims history of one company to all other companies in the same industry. Generally, an experience modification of less than 100% reflects a better-than-average experience, while an experience modification of more than 100% reflects a worse-than-average experience. Accordingly, an experience modification that is greater than 100% usually increases the cost of your workers' compensation premiums, while an experience modification that is less than 100% usually decreases the cost of your workers' compensation premiums. The acronym is X-Mod or Xmod.