Split point

The split point is the dollar amount where a claim's primary losses end and its excess losses begin. Under NCCI's plan, the split point is set per state and updated with each state's annual filing, so it isn't the same number nationally or from year to year. It's printed on your current experience rating worksheet, which is the only reliable place to check it rather than assuming a figure. The split point matters because it decides how much of each claim counts at full weight toward your EMR (experience modification rate) and how much counts at a reduced weight. A claim below the split point counts almost entirely as primary losses, at full value. A larger claim has the portion above the split point counted as excess losses, at a fraction of its value. This is also why claim frequency generally hurts a mod more than one large claim: several smaller claims each stay mostly inside the primary slice, while one large claim has more of its value pushed into the discounted excess portion.

Common questions

Is the split point the same in every state?

No. Under NCCI's plan, the split point is state specific and updated with each state's annual filing. Check the figure printed on your current worksheet.

See also

• Primary losses
• Excess losses

Source

• NCCI, The ABCs of Experience Rating
• NCCI, Experience Rating Plan Methodology Update FAQs