A method for determining an employer’s workers’ compensation premiums that reflects a) a comparison of the employers recent loss experience with the amount the employer would have been expected to pay if it had been an average employer in the same industry with the same payroll and b) the credibility or confidence assigned to the employer’s loss experience. In practice, insurers assign no credibility to employers with average class premiums below a certain amount (e.g., $5,000/yr).