• Credibility values for smaller risks have been increased significantly, with the minimum
  credibility increasing from five percent to 28.3 percent for the smallest eligible risks.

• The maximum credibility for the largest risks is now 93.8 percent instead of the 100
  percent assigned under the current Plan.

• The amount charged to an employer for a single claim will be $42,500, regardless of risk
  size. Previously, those amounts varied from approximately $50,000 for the smallest
  risks to approximately $350,000 for the largest risks.

• A cap of plus or minus 25 percent will be placed on the year-to-year swing in experience
  modifications of an employer.

These new credibility and claim values are now available to ModMaster users who have installed update 04.01 or higher. Specific Software Solutions is in the process of implementing and testing software revisions which will provide a flexible implementation of the plus or minus 25 percent rule. Until that software revision is released, users should manually compare the experience mod value computed by ModMaster to the prior year's mod and limit the new mod if necessary. Version 4 now available - contact us for upgrade instructions.

For example, suppose your mod effective 4/1/2003 was 0.900. That means that the lower cap for this year's mod is (0.9 - 0.9*0.25) = 0.675. The upper cap for this year's mod is (0.9 + 0.9*0.25) = 1.125.

If the mod effective 4/1/2004 is computed to be less than 0.675, then the mod should be limited to 0.675. If the mod effective 4/1/2004 is computed to be more than 1.125, then the mod should be limited to 1.125.

Please contact us if you have questions concerning this change.