Rating effective date
The rating effective date is the date your new EMR (experience modification rate) takes effect, usually the start of your workers' compensation policy period. Your mod doesn't update continuously; it's recalculated once a year, using data as of the corresponding valuation date, and the result takes effect on your rating effective date. A reserve that drops, or a claim that closes for less, after the valuation date doesn't change today's number; it reaches a rating that hasn't been calculated yet, which takes effect on a future rating effective date. A reporting error the carrier corrects is different: in NCCI states, it produces a revised mod. Knowing your own rating effective date matters because it tells you how much runway you have. A stale reserve raised right after your current rating takes effect has the most time before the next valuation date, and under NCCI's schedule that date falls months before your next rating effective date. A reserve that changes after that valuation date won't make it into that rating at all. Your agent or carrier can tell you your specific rating effective date, and knowing it ahead of time is what lets you plan when to raise a correction rather than reacting after the fact.
See also
Source
- NCCI, The ABCs of Experience Rating
- NCCI, Introduction to Unit Reporting (when to report corrections, and loss development as a case not reported as a correction)
- NCCI, Experience Rating Production Service (ratings revised for reporting error corrections)
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