Should the Compensation Premium Reflect the Experience of the IndividualRisk?

Experience rating of compensation risks as hitherto employed might be defined as the predication of the current rate for a given risk upon a consideration of the past experience of such risk. This practice has been confined almost entirely to cases where the insurance carrier intended to show that the rated risk had for some time past an accident experience better than the average (where an average experience means an experience productive of a cost corresponding to the basic pure premium). It is not surprising that virtually no risks have suffered an increase in rate through experience rating, since up to this time it has been customary that the request for such rating proceed from the insurer. Moreover many employers whose experience would entitle them to a decrease in rate, have not availed themselves of this advantage because of their unfamiliarity with the possibilities of the experience rating plan.