The correct answer would be, Actual loss experience of the group.
Experience rating utilizes Actual loss experience of the group in determining the rate the insurer will change for group coverage in each year of coverage.
Explanation:
When an employer adjusts premium for workers' compensation coverage based on the loses the insurer has experienced from that employer, then this adjustment is called as the experience modifier or experience rating.
In this rating, at the end of the year, the insurer charge for group coverage the actual loss experienced due to that group.
This rating helps the insurer to determine that a particular policymaker will file a claim or not. It also helps in determining which company has produced more workers' claims in a specified period of time.
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A lot!
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