In this paper we consider the design of transition rule in Bonus-Malus System. It is usually treated as exogenously given in the BMS literature, but we conclude that changing the simple but inflexible transition rule is useful in addressing certain inadequacy scenarios. The proposed transition rule has a functional form instead of a constant value. It can lead to better a posteriori premium correction in the experience rating scheme. In addition, we argue that a BMS with higher number of BMS levels (especially more malus classes) is needed to satisfy financially balanced and transparency condition. More importantly, our proposed transition rule works better with BMS that has higher number of classes since it allows for more class transitions in the system.