Effective 10/1/2022, NYCIRB has changed the methodology behind the Experience Modification calculation. The previous method was found to be insufficient to adjust premium to an appropriate level for individual risks and adequately incentivize workplace safety. You may see increases or decreases to your current experience modification factor when compared to prior periods, as the new methodology is also more responsive to claims history. As a result of NYCIRB’s changes, NYSIF updated its own State Fund Modification (SIF Mod). You may also see some changes in the SIF Mod from prior years. Be advised that in most cases, the total price will represent a decrease as NYSIF remains committed to offering our policyholders coverage at the lowest possible cost. Learn more.
Workers’ compensation premium is primarily based on assumed risk, including:
NYSIF’s Information Page details these components of workers’ compensation premium:
The New York Compensation Insurance Rating Board (NYCIRB) an independent, non-governmental rating authority, designates classification codes for each type of industry or business. Each business is assigned a governing code based on the company's line of business, not the various jobs within that company. NYCIRB annually determines loss costs for each classification code after an actuarial review of losses and payrolls for each of more than 600 existing classifications. Loss costs are subject to approval by the New York State Department of Financial Services (DFS).
Each individual insurance carrier applies its own loss cost multiplier (LCM) to the NYCIRB loss costs to determine the carrier’s actual rate for each classification. LCMs reflect general overhead, business acquisition, taxes, etc. LCMs do not include claims expenses included in the loss costs. Each carrier must file their LCM with DFS for approval.
NYSIF determines the manual rate by multiplying the NYCIRB loss cost by the NYSIF LCM. NYSIF then computes manual rate premium by multiplying the manual rate by the policyholder’s estimated annual payroll and dividing by 100. This mathematically based rate produces an objective pricing system.
NYSIF determines standard premium by multiplying its manual rate by an Experience Rating declared by NYCIRB.
NYSIF computes base premium by adding NYSIF standard premium and the Expense Constant.
Remuneration consists of gross wages and all other payments to anyone engaged in work for the employer for which NYSIF could be liable during the policy period. This includes:
NYCIRB applies an Experience Rating to each employer that adjusts for differences in losses. Generally, all employers with more than 18 months of coverage history are rated by NYCIRB by comparing an employer’s actual losses to the expected losses for an employer of similar size in the same industry, which results in an experience modification credit or debit.
NYSIF may apply its own modification of rates by means of a credit (discount), or a surcharge (differential), based upon an employer’s
A policy fee charged on every workers’ compensation policy, regardless of premium size, to cover basic costs of administering the policy.
NYCIRB determines the assessment charge that covers the costs of operating the Workers’ Compensation Board and special funds such as the Reopened Case Fund, Special Disability Fund and the Special Funds Conservation Committee.
Premium for domestic terrorism and other catastrophes is a stand alone charge similar to the Terrorism Risk Insurance Act (TRIA) charge for foreign terrorism. Catastrophe (other than Certified Acts of Terrorism) is defined as any single event, resulting from an earthquake, Non-Certified Act of Terrorism, or catastrophic industrial accident, in which aggregate workers' compensation losses exceed $50 million.
The federal Terrorism Risk Insurance Program Reauthorization Act directs that both domestic and foreign terrorism be reflected on the same endorsement, and include definitions for losses from “terrorism” and “catastrophes” (other than Certified Acts of Terrorism).
The lowest premium for which an annual policy may be written.