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exposure. The premium collected under experience
rating plans may not equal the expected premium in total.
This means that the plan has an ' off balance '.

If this can be anticipated and does not reflect a true
difference between experience-rated and non-
experience rated risks, the experience rating plan can
include, as a last step, multiplication by a factor to correct
for this off-balance. Alternatively the manual rates
include an off balance correction. This latter approach
affects non-experience- rated entities also.

Q8. Discuss about National Council on
Compensation Insurance (NCCI) experience
rating plan.

Ans. The NCCI Experience Rating Plan has the unique
characteristic of dividing the losses for each claim into
a primary portions and an excess portion.

The expected and actual primary portions are compared
using one credibility factor, and the expected and actual
excess portions are compared using another credibility

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