To help businesses smoothly transition to our new model, any rate decreases will be applied immediately, while any initial rate increases will be phased in over three years.
What if your premium rate is projected to go up?
Businesses not experienced rated
Businesses a part of experience rating programs
Starting point rate
As we move to our new model, each business will be assigned a starting point rate that reflects their claims experience and 2019 rate group rate under our old rate-setting process.
|Businesses not in an experience rating program||Businesses in an experience rating program|
* Example of weighted by payroll - if a business includes electrical and HVAC repairs, with 70 per cent of payroll going to HVAC services staff and 30 per cent to electrical staff, the 2019 rate group rates would be weighted 70/30 to create a single starting point rate.
Here’s how transition to our new model will work:
Your business will be assigned a starting point rate and projected premium rate based on previous rates, claims experience, size of business, NAICS classification and whether or not they were in an experience rating program previously, to determine the 2020 premium rate they will pay.
The projected premium rate will provide businesses with the future direction, up or down, that their premium rate is heading if there is no change in individual and class experience.
Businesses with projected premium rate decreases will move down to their projected risk band.
Risk bands are not static; they are set and reviewed each year based on the overall claims experience of the class.
Businesses with projected premium rate increases will move up a maximum of one risk band from their 2020 risk band. Businesses with projected premium rate decreases will move down to their projected risk band.
Businesses will move up a maximum of two risk bands above their 2021 risk band. As in year two, businesses with projected decreases will move down to their projected risk band.
Starting in 2023, our policies for premium rate setting under the new model will be fully in effect. Businesses with projected premium rate increases will see their rates increase up to three risk bands per year, until they reach their projected premium rate. Businesses eligible for decreases will see their rates decrease up to three risk bands per year until they reach their projected premium rate.
For more information on the transition rules, see our Transition policy.
We are moving from our current classification structure to the North American Industry Classification System (NAICS). NAICS is a North American standard, already used by Statistics Canada and the Canada Revenue Agency. It will help us simplify and streamline our classifications from 155 rate groups down to just 34 classes/subclasses. That will make it easier to understand why your business and other businesses are classified the way they are.