Exmod

"In California the experience modification or exmod is calculated by the Work Comp Insurance Rating Bureau (WCIRB) for insureds that generate a minimum amount of premium in the prior three year period. As of January 2013 the following is true, ""A risk shall qualify for experience rating of its California workers� compensation insurance premium under this Plan if not less than $27,500 is produced by applying pure premium rates to the total remuneration that would be used in the experience rating calculation for the risk.""- Title 10, California Code of Regulations, Section 2353.1The number is relative to 1.00 which would be no change to numbers that are either higher or lower than 1.00. An exmod like .80 would mean that the rate the insured paid for work comp was effectively receiving a 20% discount. This is because the premium rate is multiplied by the mod, in this case .80, to arrive at the final biling rate.On the other hand an exmod like 1.20 would mean that the rate was effectively being surcharged an additional 20%.For smaller sized risks which in work comp terms would be any account of about $50,000 premium or less per year, the main factor that affects the exmod is frequency of claims. In other words an account that had 10 claims of $5,000 each would end up with a higher exmod than an account with one claim of $100,000. An extreemly large claim, often referred to as a shock loss, is limited by its effect on the exmod by a maximum loss value. In California the maximum loss value of any claim is $175,000 (as of Jan 2013). "