Big Changes Starting 4/1/24 for the PCRB Experience Rating Plan

Authored by Ingrid Dunlap

A statement was recently released by the Pennsylvania Compensation Rating Bureau that the Pennsylvania Insurance Commissioner has approved the revised Experience Rating Plan on August 18, 2023. Below are the key points being made that we should be aware of.

Key changes to the approved Experience Rating Plan (ERP) are as follows:

  • The ERP eligibility threshold will be lowered from $10,000 to $5,000.
  • Credibility values for smaller risks will be increased significantly, with the minimum credibility increasing from 28.3% to 69.0% for the smallest eligible risks.
  • The maximum primary loss value for a single claim will vary from $10,000 for the smallest risks to $300,000 for the largest risks. Previously, these amounts were fixed at $42,500 regardless of risk size and loss potential.
  • The new capping rule will replace the current +/-25% swing limits and the secondary capping rule. It will introduce a formula-driven maximum modification. Additionally, the proposed plan will retain only an upward swing limit of +40% and eliminating secondary capping.
  • A two-year transition rule will be implemented from 4/1/2024 to 3/31/2026 to manage any substantial changes resulting from plan adoption, both upward and downward movement. During this period, the current capping rule will remain in effect along with the use of the maximum modification formula.

These changes are the first of many that will be happening in 2024. Be sure to be in contact with your broker to ensure you know what the next year has in store for you.

If you are interested in reading the PCRB Circular just click here.


Ingrid Dunlap, CIC

Ingrid coordinates risk management and insurance brokerage for her clients using KMRD's unique servicing model.



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