Effective ((June 30, 2017))October 1, 2023.

You will pay a premium administration expense charge for your share of the expenses of the industrial insurance program that are not directly related to claims administration. To determine your premium administration expense charge, our actuaries will multiply your standard premiums by the premium administration expense factor, which is ((four))seven and three-tenths percent. This charge is not performance adjusted.

The premium administration expense factor was determined using premium and expense data from fiscal years ((2013))2020 through ((2015))2022.

You will pay for the cost of your claims and their administration for those injuries and illnesses occurring during your retrospective rating enrollment period. You can protect yourself from high claims costs at the claim level with the single loss occurrence limit you select. You can protect yourself from high claims costs at the aggregate claims level with the maximum loss ratio you select.

Our actuaries will determine your incurred loss and expense charge by multiplying your losses incurred by the performance adjustment factor and ((one hundred nine))112.5 percent, which is one plus the claims administration expense factor, currently ((nine))12.5 percent.

Data from fiscal years ((2006))2020 through ((2015))2022 was used to determine the claims administration expense factor.

(1) Each risk classification is assigned to a hazard group, as shown in WAC 296-17-901. To determine your hazard group, we will first multiply your standard premiums in each risk class by the hazard group index for that risk class. This is called the adjusted standard premium. Hazard group indices are shown in subsection (3) of this section. We will then divide the total adjusted standard premiums by your total standard premiums, rounded to three decimal places to determine your average hazard index. We will assign you to a hazard group based on your average hazard index using the table in subsection (4) of this section.

(2) We will determine your size group based on your standard premiums using the table in WAC 296-17B-900.

(3) Hazard group index table.

(4) Average hazard index table.

Example:

• For your retrospective enrollment year, your group has exposure in risk classifications with Hazard Groups 3 and 6 and corresponding standard premiums of $1,000,000 and $2,000,000 during the enrollment year.

• The Average Hazard Index value for your group is the total adjusted standard premiums divided by the total standard premiums or (($2,500,000/$3,000,000 = 0.833))$2,410,000/$3,000,000 = 0.803 to three decimal places. This value ((0.833))0.803 is in the range between ((0.720 and 0.914))0.685 and 0.909.

• Therefore, your group will be assigned Hazard Group Number 5 during this annual adjustment.