BILL REQ. #:  S-1643.2 

Read first time 02/23/2005.   Referred to Committee on Labor, Commerce, Research & Development.

     AN ACT Relating to industrial insurance premium 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 reduce volatility in premiums, by establishing rates of premium based upon historical rates of investment return and other recognized insurance principles.
     (b) The department shall, in consultation with the workers' compensation advisory committee, adopt rules regarding the level of assets needed to maintain actuarial solvency of the accident and medical aid funds in accordance with this subsection. The department and the workers' compensation advisory committee shall consider the level of assets customarily used by private insurers offering workers' compensation insurance in other states and other states' workers' compensation funds.
     (c) When the level of assets exceeds the amount required under the rules, the department may temporarily reduce rates below the rates fixed under this subsection, but only if: (i) Employers are notified of the fixed rate, the temporary rate, the period over which the temporary rate applies, and the reason for adopting a reduced rate; and (ii) the appropriate committees of the legislature are notified of any such proposed action at least sixty days before taking the action. The department shall not provide dividends or other similar measures that give refunds, rebates, or account credits, to employers or employees of premiums paid or of surplus funds.
     (d) 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 reduce premium volatility, 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.