Experience rating is determined by:

Experience rating is determined by:

• A. Determining the history of claims experienced by a group
• B. Determining the insurer's market share
• C. Assessing customer service ratings
• D. Evaluating the age of group members

Answer: (A)

Experience rating bases premiums on the group’s past claims history. Insurers look at how many and how costly claims the group has had in a prior period and use that information to estimate future costs. If the claims experience is high, premiums go up; if it’s low, premiums go down. This approach focuses on actual claims experience rather than market share or customer service, and while age can affect risk, the rating itself is determined by the history of claims.

Experience rating bases premiums on the group’s past claims history. Insurers look at how many and how costly claims the group has had in a prior period and use that information to estimate future costs. If the claims experience is high, premiums go up; if it’s low, premiums go down. This approach focuses on actual claims experience rather than market share or customer service, and while age can affect risk, the rating itself is determined by the history of claims.