(1) An insured, whose premium level qualifies, must be assigned an experience modification factor that reflects the insured's actual experience in comparison to the expected experience. "Experience modification factor" means a factor derived from an evaluation of payroll and accident experience in previous policy periods that is based on the formula of an advisory or rating organization.

(2) The state fund shall use the methods used by the workers' compensation advisory or rating organization to identify a qualified insured and determine the insured's experience modification factor in order to reward an insured with a good safety record and penalize an insured with a poor safety record.