Suppose a firm had an experience factor of 1.7000 during 2008 and the computed factor for 2009 was 1.1971. Suppose also that the firm has a compensable claim in its experience period so it isn't eligible for the compensable-claim-free maximum factor.

The computed factor of 1.1971 is more than 25% smaller than 1.7000 (1.1971 / 1.7000 = 0.7042 so it is 29.58% smaller), so the 25% annual limitation would limit the 2009 experience factor to 1.2750 (= 1.7000 x 0.75).

Although the prior factor (1.7000) is greater than 1.3333, the computed factor (1.1971) is above 1.0000 so the exception to the 25% annual limitation doesn't apply. The final factor is 1.2750.