Can someone please explain the difference between these two things? To me it looks like they both are a measure of how much reliance to put on past experience? Thanks
"Experience rating" is just the name given to the process of calculating a premium using a credibility factor. The credibility factor is the proportion of the total premium that is based on the past experience of the group. So we might say "we are using experience rating to calculate PMI premiums for Smith Widgets Co. The credibility factor we are using for this is 30%." Good luck in the exam! Robert
