Wyoming Administrative Code › Agency 053 - Workforce Services, Department of › Sub-Agency 0021 - Workers' Compensation Division › Chapter 2 - EMPLOYER COVERAGE, COMPLIANCE, AND DISCOUNT PROGRAMS › Section 2-16 - Glossary of Terminology

Current through July 13, 2024
(a) Actual (A) Losses. The incurred loss
				amounts for workers' compensation claims submitted by the employer, which have
				event dates in the three (3) year window of time used for experience rating.
				The losses will include the case reserves as of the evaluation date set by the
				plan, and will have applicable plan minimums and caps applied for use in the
				experience rating formula.
(b)
				Actual Excess (Ae) Losses. The Actual Excess Losses for each claim represents
				the more random and less controllable portion of the claim. For each claim, the
				Actual Excess Loss is computed as the difference between the Total Actual Loss
				for the claim and Actual Primary Loss for the claim.
(c) Actual Primary (Ap) Losses. The
				experience rating plan segregates the Total Actual Loss on each claim into two
				components - primary and excess. The Actual Primary Loss for each claim
				represents the more predictive and controllable portion of the claim. The
				Actual Primary Loss value for each claim is obtained by the formula: Actual
				Primary Loss = Total Actual Loss if Total Loss is less than ten thousand
				dollars ($10,000.00); = ten thousand dollars ($10,000.00) if Total Loss is
				equal to or greater than ten thousand dollars ($10,000.00).
(d) Credibility (Z) Value. A measure of the
				predictive value in a given application that the actuary attaches to a
				particular set of data, such as the claims experience used for determining
				EMRs.
(e) Credibility Excess (Ze)
				Value. The Credibility Excess, or Ze Value, is the weight given to the risk's
				Actual Excess Losses relative to the average Expected Excess Losses for a
				similarly-sized risk in the same standard classification(s). It is intended to
				reflect the actuarial predictability of a risk's excess loss experience. The
				larger the risk is, the greater the weight is given to the excess loss
				experience and the greater the Ze. The excess experience of very small
				experience rated risks has essentially no predictive value and, as a result,
				the Ze for these risks may be zero (0). The complement of the Ze, (1 - Ze), is
				the weight given to the risk's Expected Excess Losses. The Ze Value varies with
				a risk's Expected Losses.
(f)
				Credibility Primary (Zp) Value. The Credibility Primary (Zp) Value, is the
				weight given to the risk's Actual Primary Losses relative to the average
				Expected Primary Losses for a similarly-sized risk in the same standard
				classification(s). It is intended to reflect the actuarial predictability of a
				risk's primary loss experience. The larger the risk is, the greater the weight
				is given to the primary loss experience and the greater the Zp. The complement
				of the Zp value (1 - Zp), is the weight given to the risk's Expected Primary
				Losses. The Zp Value varies with a risk's Expected Losses.
(g) Expected (E) Losses (also referred to as
				Total Expected Loss). The Expected Losses are the basis to which actual losses
				are compared in the experience rating formula. They are derived for each
				classification as the product of the payroll for the classification and the
				expected loss rate applicable to the classification. They are also computed as
				the sum of the Expected Primary Losses and the Expected Excess Losses. For
				other than per capita classifications, this product is then divided by one
				hundred (100). The Expected Loss Rate for a classification is the average rate
				of losses per one hundred dollars ($100.00) of payroll that is expected for the
				classification during an experience rating period.Expected Excess (Ee) Losses.
				The Expected Excess Losses are the portion of the Expected Losses that is
				considered excess, and are used in the experience rating formula in combination
				with the Actual Excess Losses. The Expected Excess Losses for a classification
				are determined by multiplying the Excess Expected Loss Rate for the
				classification per $100 of employer payroll for the classification. The total
				Expected Excess Losses are the sum of the Expected Excess Losses over all
				classifications.
(h) Expected
				Primary (Ep) Losses. The Expected Primary Losses are the portion of the
				Expected Losses that is considered primary, and are used in the experience
				rating formula in combination with the Actual Primary Losses. The Expected
				Primary Losses for a classification are determined by multiplying the Primary
				Expected Loss Rate for the classification by the employer payroll for the
				classification. The total Expected Primary Losses are the sum of the Expected
				Primary Losses over all classifications.
(i) Multiple Claim Occurrence (MCO). Claims
				with multiple claimants or catastrophe claims combines claims together which
				then have a $500,000.00 limit (2 X the Maximum Single Loss Amount of
				$250,000.00).
(j) Multiple Single
				Loss Amount. Maximum Single Loss is the maximum limit of incurred loss, not to
				exceed the state accident limit of $250,000.00.
(k) Split Plan. A method for calculating EMRs
				that balances the effect of more frequent losses that fall below a "split
				point" with more severe losses that occur above the split point.
(l) Split Point. A loss amount determined by
				the state based on actuarial recommendations. Losses falling below the split
				point are considered Primary Losses. Any remaining losses above the Primary
				Losses and below the Maximum Single Loss Amount are considered the Excess
				Losses.
(m) Maximum Loss Cap. The
				Maximum Loss Cap is the state's accident limit per a single claim or two (2)
				times the state's accident limit for multiple claimants or
				catastrophe.