WSR 14-08-081 PROPOSED RULES DEPARTMENT OF LABOR AND INDUSTRIES [Filed April 1, 2014, 10:11 a.m.]
Original Notice.
Preproposal statement of inquiry was filed as WSR 13-22-072.
Title of Rule and Other Identifying Information: Chapter 296-17B WAC, Retrospective rating for workers' compensation insurance.
Hearing Location(s): Department of Labor and Industries, 7273 Linderson Way S.W., Room S117, Olympia, WA 98504, on May 6, 2014, at 10:00 a.m.
Date of Intended Adoption: May 30, 2014.
Submit Written Comments to: Jessica Nau, P.O. Box 44180, Olympia, WA 98504-4180, e-mail Jessica.Nau@LNI.wa.gov, fax (360) 902-4258, by 5:00 p.m., May 6, 2014.
Assistance for Persons with Disabilities: Contact office of information and assistance by April 29, 2014, TTY (360) 902-5797.
Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The purpose of this rule proposal is to modify a formula in an existing rule that allowed a small number of retrospective rating (retro) program participating employers to receive refunds or larger refunds inconsistent with the intent of the retro program, when their loss ratio (claim costs divided by standard premium) exceeds the maximum loss limit they had chosen.
This rule will amend WAC 296-17B-440 Net insurance charge. With this change, the department proposes removing the performance adjustment factor (PAF) from the calculation of insurance charges for those retro participants whose insurance charges are based on standard premium paid.
Reasons Supporting Proposal: Rules for the retro program were rewritten for enrollment beginning in January 2011. Tables were updated to increase fairness in the distribution of retro refunds and to offer participants more choices in how they participate financially in the program. Changes included the assessment of insurance charges based on hazard, and were based on historic performance of groups and employers enrolled in the retro program.
Statutory Authority for Adoption: RCW 51.18.010 (Retrospective rating) and 51.04.020(1) (General authority).
Statute Being Implemented: RCW 51.18.010, 51.04.020.
Rule is not necessitated by federal law, federal or state court decision.
Name of Proponent: Department of labor and industries, governmental.
Name of Agency Personnel Responsible for Drafting: Diane Doherty, Tumwater, Washington, (360) 902-5903; Implementation: Tim Smolen, Tumwater, Washington, (360) 902-4835; and Enforcement: Victoria Kennedy, Tumwater, Washington, (360) 902-4777.
No small business economic impact statement has been prepared under chapter 19.85 RCW. RCW 19.85.025(3) does not apply to a rule described in RCW 34.05.310(4), and that subsection exempts rules that "set or adjust fees pursuant to legislative standards." These proposed rules clarify one part of the process for calculating retrospective rating premiums.
A cost-benefit analysis is not required under RCW 34.05.328. RCW 34.05.328 exempts from its requirements rules "that set or adjust fees pursuant to legislative standards." These proposed rules clarify one part of the process for calculating retrospective rating premiums.
April 1, 2014
Joel Sacks
Director
AMENDATORY SECTION (Amending WSR 10-21-086, filed 10/19/10, effective 11/19/10)
WAC 296-17B-440 Net insurance charge.
You will pay a net insurance charge for the protection provided by your single loss occurrence limit and your maximum loss ratio.
Your net insurance charge can be calculated as a percentage of either your standard premiums or your incurred loss and expense charge.
(1) If you choose to have your net insurance charge calculated using your standard premiums, your net insurance charge will be calculated using the following formula:
(Premium insurance charge factor - Premium insurance savings factor) x (Standard premiums)(( x (Performance adjustment factor)))
Your premium insurance charge factor and premium insurance savings factor will depend on your maximum and minimum loss ratio choice, size group and hazard group, and can be found in WAC 296-17B-910 through 296-17B-990. If you choose a maximum and/or minimum loss ratio between the options found in one of the tables, the department will interpolate to obtain the charge and/or savings factors from the factors found in the tables.
(2) If you choose to have your net insurance charge calculated using your losses incurred, your net insurance charge will be calculated using the following formula:
(Loss insurance charge factor - Loss insurance savings factor) / [1.0 - (Loss insurance charge factor - Loss insurance savings factor)] x Incurred loss and expense charge
Your loss insurance charge factor and loss insurance savings factor will depend on your maximum and minimum loss ratio choice, size group and hazard group, and can be found in WAC 296-17B-910 through 296-17B-990. If you choose a maximum and/or minimum loss ratio between the options found in one of the tables, the department will interpolate to obtain the charge and/or savings factors from the factors found in the tables.
Reviser's note: The brackets and enclosed material in the text of the above section occurred in the copy filed by the agency. Reviser's note: The brackets and enclosed material in the text of the above section occurred in the copy filed by the agency and appear in the Register pursuant to the requirements of RCW 34.08.040. |