What is EMR based on?

What is EMR based on?

• A. The last 3 years loss history, not including the previous year
• B. The current year loss history only
• C. Payroll averages over 5 years
• D. Industry average losses over the past decade

Answer: (A)

Experience Modification Rating reflects how a company’s past workers’ compensation losses compare with what would be expected for its payroll. It uses a look-back period to smooth out year-to-year fluctuations and to account for how losses develop over time. The standard basis is the losses from the last three completed policy years, not including the most recent year. This approach avoids including incomplete or unusually shaped data from the current year and the immediate past year, giving a more stable measure of safety performance over time. Because EMR hinges on actual loss experience within that three-year window, it’s not determined by current-year losses alone, payroll averages, or industry averages elsewhere.

Experience Modification Rating reflects how a company’s past workers’ compensation losses compare with what would be expected for its payroll. It uses a look-back period to smooth out year-to-year fluctuations and to account for how losses develop over time. The standard basis is the losses from the last three completed policy years, not including the most recent year. This approach avoids including incomplete or unusually shaped data from the current year and the immediate past year, giving a more stable measure of safety performance over time. Because EMR hinges on actual loss experience within that three-year window, it’s not determined by current-year losses alone, payroll averages, or industry averages elsewhere.