BILL REQ. #:  H-1796.1 

Read first time 02/21/2003.   Referred to Committee on Commerce & Labor.

     AN ACT Relating to improving stability in industrial insurance rates; and amending RCW 51.16.035.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

Sec. 1   RCW 51.16.035 and 1999 c 7 s 8 are each amended to read as follows:
     (1)(a) The department shall classify all occupations or industries in accordance with their degree of hazard and fix therefor basic rates of premium which shall be:
     (i) The lowest necessary to maintain actuarial solvency of the accident and medical aid funds in accordance with recognized insurance principles; and
     (ii) Designed to attempt to limit fluctuations in premiums.
     (b) The department shall, in consultation with the workers' compensation advisory committee, adopt rules regarding the level of the contingency reserve needed to maintain actuarial solvency of the accident and medical aid funds. The policy must include a process by which the department may, no sooner than thirty days after reporting the proposed action to the appropriate committees of the legislature, pay premium dividends if the level of the contingency reserve exceeds the amount required under the rules. This subsection does not authorize the department to fix rates at a level below the actuarially indicated rates.
     (c) The department shall formulate and adopt rules ((and regulations)) governing the method of premium calculation and collection and providing for a rating system consistent with recognized principles of workers' compensation insurance which shall be designed to stimulate and encourage accident prevention and to facilitate collection. The department may annually, or at such other times as it deems necessary to ((maintain solvency of the funds)) achieve the objectives under (a) of this subsection, readjust rates in accordance with the rating system to become effective on such dates as the department may designate.
     (2) In providing a retrospective rating plan under RCW 51.18.010, the department may consider each individual retrospective rating group as a single employing entity for purposes of dividends or premium discounts.