Subject of Possible Rule Making: 2012 industrial insurance premium rates, chapter 296-17 WAC, General reporting rules, audit and recordkeeping, rates and rating system for Washington workers' compensation insurance and chapter 296-17B WAC, Retrospective rating for 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 a workers' compensation classification plan and to set premium rates that are the lowest necessary to maintain actuarial solvency of the accident and medical aid funds and are designed to attempt to limit fluctuations in premium rates. The plan must be consistent with recognized principles of insurance. Labor and industries is also required by law to offer retrospective rating plans to employers as a further incentive to encourage workplace safety and prevent employee injury.

     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 (WCAC) and retrospective rating advisory committee as changes are developed. The public can participate in these discussions by attending WCAC meetings. A schedule of these meetings is available at http://www.lni.wa.gov/ClaimsIns/Insurance/Learn/Wcac/Default.asp. The public can participate in discussions of the retrospective rating advisory committee. A schedule of meetings can be found at www.lni.wa.gov/ClaimsIns/Insurance/Reduce/Qualify/AdvComm/default.asp.

     Interested parties can participate in the decision to adopt the new rule and formulation of the proposed rule before publication. Labor and industries is planning to hold formal public hearings in October 2011 in Tumwater, Tukwila, Bellingham, Vancouver, Kennewick, and Spokane. Public hearings are anticipated to last until all public comments are received. Inquiries can be directed to Jo Anne Attwood, Classification Services, P.O. Box 44148, Olympia, WA 98504-4148, phone (360) 902-4777, fax (360) 902-4988, e-mail smij235@lni.wa.gov.

June 21, 2011

Judy Schurke

Director

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