Subject of Possible Rule Making: 2006 industrial insurance premium rates, chapter 296-17 WAC, General reporting rules, classifications, audit and record keeping, rates and rating system for Washington workers' compensation insurance.

     Statutes Authorizing the Agency to Adopt Rules on this Subject: RCW 51.16.035, 51.04.020(1), and 51.18.010.

     Reasons Why Rules on this Subject may be Needed and What They Might Accomplish: Labor and industries is required by law to establish and maintain workers' compensation classification plan and set premium rates that maintain actuarial solvency of the accident and medical aid funds. By law, the plan must be consistent with recognized principles of insurance and rates adjusted annually or as needed to ensure solvency of the insurance trust funds. Labor and industries is also required by law to offer retrospective rating plans to employers as a further incentive to encourage workplace safety and injury prevention.

     Other Federal and State Agencies that Regulate this Subject and the Process Coordinating the Rule with These Agencies: No other state, local, or federal agency regulates this subject.

     Process for Developing New Rule: Premium rates for each classification are developed in part from the past loss experience of employers subject to the classification, changes in benefit levels mandated by law or court decisions, medical inflation, economic and business trends and financial markets. Labor and industries will work with the Workers' Compensation Advisory Committee and Retrospective Rating Advisory Committee as changes are developed. The public can participate in these discussions by attending the retrospective advisory committee meetings. Schedules of these meetings are available on the Insurance Services section of the labor and industries internet site. This site can be accessed at lni.wa.gov/ClaimsInsurance/RatePremium/Reduce/Retro/AdvComm.

     Interested parties can participate in the decision to adopt the new rule and formulation of the proposed rule before publication. Labor and industries is tentatively planning to hold formal public hearings between October 28 and November 8 in Spokane, Yakima, Mt. Vernon, Tukwila, Vancouver, and Tumwater. Public hearings are anticipated to begin at 1 p.m. and last until all public comments are received. Inquiries can be directed to Tammy Turner, Classification Services Section, P.O. Box 44148, Olympia, WA 98504-4148, phone (360) 902-4777, fax (360) 602-4729.

June 21, 2005

Gary Weeks

Director

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