Z-1031               _______________________________________________

                                                   HOUSE BILL NO. 1395

                        _______________________________________________

State of Washington                              50th Legislature                              1988 Regular Session

By Representatives Sayan, Patrick and Wang; by request of Department of Labor and Industries

Read first time 1/15/88 and referred to Committee on Commerce & Labor.

AN ACT Relating to industrial insurance dividends and premium refunds; and amending RCW 51.16.035 and 43.88.140.

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

        Sec. 1.  Section 16, chapter 289, Laws of 1971 ex. sess. as last amended by section 4, chapter 129, Laws of 1980 and RCW 51.16.035 are each amended to read as follows:

          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 the lowest necessary to maintain actuarial solvency of the accident and medical aid funds in accordance with recognized insurance principles.  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, readjust rates in accordance with the rating system to become effective on such dates as the department may designate.

          The department may insure the workers' compensation obligations of employers as a group if the following conditions are met:

          (1) All the employers in the group are members of an organization that has been in existence for at least two years;

          (2) The organization was formed for a purpose other than that of obtaining workers' compensation coverage;

          (3) The occupations or industries of the employers in the organization are substantially similar, taking into consideration the nature of the services being performed by workers of such employers;

          (4) The employers in the group constitute at least fifty percent of the total employers in such organization; and

          (5) The formation and operation of the group program in the organization will substantially improve accident prevention and claim management for the employers in the group.

          In providing an employer group plan under this section, the department may consider an employer group as a single employing entity for purposes of dividends or premium discounts.

As an incentive for accident prevention, a public employer receiving dividends or premium refunds under the department's retrospective rating plan may carry such dividends or premium refunds between fiscal periods without reversion or lapse of the funds.

        Sec. 2.  Section 43.88.140, chapter 8, Laws of 1965 as amended by section 9, chapter 270, Laws of 1981 and RCW 43.88.140 are each amended to read as follows:

          All appropriations shall lapse at the end of the fiscal period for which the appropriations are made to the extent that they have not been expended or lawfully obligated, except as provided in RCW 51.16.035.