WSR 14-12-051 PERMANENT RULES DEPARTMENT OF LABOR AND INDUSTRIES [Filed May 30, 2014, 8:52 a.m., effective July 1, 2014] Effective Date of Rule: July 1, 2014.
Purpose: The purpose of this rule proposal is to modify a formula in an existing rule that allowed a small number of retro participating employers to receive refunds or larger refunds inconsistent with the intent of the retrospective rating 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 from the calculation of insurance charges for those retro participants whose insurance charges are based on standard premium paid.
Citation of Existing Rules Affected by this Order: Amending WAC 296-17B-440.
Statutory Authority for Adoption: RCW 51.18.010 (retrospective rating).
Other Authority: RCW 51.04.020(1) (general authority).
Adopted under notice filed as WSR 14-08-081 on April 1, 2014.
Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.
Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.
Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 1, Repealed 0.
Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 0, Repealed 0.
Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 1, Repealed 0.
Date Adopted: May 30, 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. |