In the promulgation of workers' compensation rates, which factor is involved in the calculation of rates?

The experience modification factor is indeed a key component in the calculation of workers' compensation rates. This factor is a measure of a company's safety record and claims history compared to other businesses in the same industry. It reflects how a company's incurred losses and claims experience deviate from the average, allowing insurers to adjust premiums accordingly.

A lower experience modification factor indicates better-than-average safety performance, which can result in lower insurance premiums. Conversely, a higher factor signifies a riskier or less safe work environment, leading to increased premiums. This factor helps to incentivize companies to invest in safety and loss prevention measures, ultimately impacting overall workers' compensation costs.

The other factors listed, while relevant to assessing risk, do not directly influence the calculation of the rates in the same primary manner as the experience modification factor. Annual employee salaries, the type of business, and the number of claims filed provide context or can influence other aspects but are not as central to the specific rate adjustment process as the experience modification factor is.