New York Workers' Compensation Statutes

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                          Lee Barclay (WA)            Alan Wickman (NE)                                     Dean Ehler (AZ)                                             Robin Coombs (KY)
                                                                                                                                                                        Kentucky's responses would NOT apply to excess
                                                                                                                                                                        workers compensation.
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                                                      Nebraska collects assessments every few years for
                                                      its Workers‟ Compensation Trust Fund                  Arizona is a NCCI state. The NCCI files workers
                                                      (which finances vocational rehabilitation work and    compensation rates on the behalf of all insurers licensed
                                                      run-off of an old second injury fund)                 to write workers compensation insurance pursuant to
                                                      using paid losses during the prior year as a basis.   A.R.S. 20-357. A.R.S. § 23-963.01(D) says, “losses
                                                      The paid losses include deductible losses,            subject to the deductible shall be reported and recorded
                                                      both small medical deductibles as well as large       as losses for purposes of calculating rates for a           Kentucky is an NCCI state. NCCI collects some
                           In Washington we are not   deductibles (although we believe that                 policyholder on the same basis as losses under policies     information regarding large deductible policies. It is not
                           aware of any sources of    probably 99% of these deductible losses arise from    providing first dollar coverage”. Consequently, the NCCI    specifically compiled and reported to the Kentucky Office
                           information that relates   so-called large deductibles). The                     collects data related to deductible policies and the rate   of Insurance. NCCI could provide reporting details.
                           specifically to workers    necessary additional information is requested of      filing it makes reflect that data. No other sources of      There are no reports regarding large deductible workers
                           compensation large         insurers as part of their premium tax                 information provide workers compensation deductible         compensation policies that accompany Annual
  1 Sources of Information deductible insurance.      submission.                                           information.                                                Statements submitted to KOI.
    State's system is
  2 reasonable equitable Not applicable               No.                                                                                                               Yes

                         Lee Barclay (WA)   Alan Wickman (NE) taxation for the Workers‟
                                            We view the basis of                                     Dean Ehler (AZ)                                         Robin Coombs (KY)
                                            Compensation Trust Fund as equitable,although
                                            some insurers express displeasure with paid losses
                                            as the basis of assessment. But Nebraska also has
                                            a collection for the “Compensation Court Cash
                                            Fund,” which is a fund used to finance the operation
                                            of the state‟s workers‟ compensation agency. The
                                            basis for collection for this fund is 1% of State Page
                                            written premiums, which is net of deductible credits
                                            for small and large deductibles. Self-insured
                                            employers also contribute to this fund, by allocating
                                            their payrolls into NCCI rating classes and paying
                                            1¼% of their computed loss costs. As such, while
                                            the amount passed through to “fully insured”
                                            employers and to self-insured employers is
                                            approximately equal, employers written under large
                                            deductible forms get a very substantial discount
                                            versus the amounts passed through to “fully
                                            insured” or self-insured employers. There is no good
                                            reason for this disparity. In addition, Nebraska
                                            collects a “quasi premium” tax from self-insured
                                            employers equal to 2½% of their similarly-computed
                                            loss costs, which results in the anomaly that large                                                              However, for a final answer, the Kentucky Office of
                                            deductible policyholders pay less in taxes than                                                                  Insurance would defer to the Kentucky Workers
                                            either “fully insured” employers or self-insured         The state‟s system for assessing workers compensation   Compensation Funding Commission as they are
                                            employers. In most states, the premium tax “break”       special funds is administered by the Industrial         responsible for Special Fund Assessments pursuant to
                                            afforded self-insured employers (as they are not         Commission of Arizona. They may be contacted at 602-    KRS 342.122. Their contact info is
  Remark:                                   buying insurance) is well accepted, but the historical   542-4411.                                               and 502 573 3505.
3 Adequate information   No                                                                                                                                  No

                      Lee Barclay (WA)                Alan Wickman (NE)                                      Dean Ehler (AZ)                                             Robin Coombs (KY)

                                                                                                                                                                         Large deductibles are of course optional and most employers in
                                                                                                                                                                         Kentucky would not qualify. Therefore large deductible information
                                                                                                                                                                         is a small piece of market analysis. In researching large
                                                                                                                                                                         deductible issues in recent years there was a gap in available
                                                      It‟s tough to give a yes/no answer here. We have                                                                   information.
                      Any expanded reporting          only a rough idea of the market penetration of large                                                               The large deductible discount formula is submitted in company
                      would be helpful. We need to    deductibles, but the precise percentage (be it 28%,                                                                rate/rule filings filed with the Kentucky Office of Insurance.
                                                                                                                                                                         KOI collects no information regarding the number of large
                      do market analysis pertaining   32% or 37%) really doesn‟t appear to be something
                                                                                                                                                                         deductible policies issued by an insurer, the total gross
                      to large deductible workers     that we need to know right now. If, however, we
                                                                                                                                                                         (undiscounted) premium of these policies, the total net
                      compensation policies in        needed to know that, we‟d need to ask NCCI to                                                                      (discounted) premium, the number of claims which are within the
                      other states in order to        make an estimate, because the only source of           The information we have comes from the NCCI. Since the      large deductible, or the total amount of such claims.
                      assess solvency and possible    information that we would have would be the paid       NCCI is the Rating Organization that collects all workers   The Kentucky WC Funding Commission has the most information
                      impact on other states‟         losses that we obtain occasionally for assessment      compensation data in Arizona, they are the only source of   regarding deductible policies which have to be “grossed up” for
  Remark:             guaranty funds.                 purposes.                                              information. We believe it is adequate.                     Special Fund assessment purposes.

  Data Collected by
4 state               No                              Yes                                                                                                                Yes

          Lee Barclay (WA)                  Alan Wickman (NE)                                    Dean Ehler (AZ)                                           Robin Coombs (KY) Compensation Funding
                                                                                                                                                           The Kentucky Workers
                                                                                                                                                           Commission is responsible collecting Special Fund
                                                                                                                                                           Assessments pursuant to KRS 342.122. The basis is
                                                                                                                                                           “premium” as defined by KRS 342.0011(28) which
                                                                                                                                                           (28) "Premium" for each employer carrying his own risk
                                                                                                                                                           pursuant to KRS 342.340(1) shall be the projected value
                                                                                                                                                           of the employer's workers' compensation claims for the
                                                                                                                                                           next calendar year as calculated by the executive director
                                                                                                                                                           using generally-accepted actuarial methods as follows:
                                                                                                                                                           (a) The base period shall be the earliest three (3) calendar
                                                                                                                                                           years of the five (5) calendar years immediately preceding
                                                                                                                                                           the calendar year for which the calculation is made. The
                                                                                                                                                           executive director shall identify each claim of the
                                                                                                                                                           employer which has an injury date or date of last injurious
                                                                                                                                                           exposure to the cause of an occupational disease during
                                                                                                                                                           each one (1) of the three (3) calendar years to be used as
                                                                                                                                                           the base, and shall assign a value to each claim. The
                                                                                                                                                           value shall be the total of the indemnity benefits paid to
                                                                                                                                                           date and projected to be paid, adjusted to current benefit
                                                                                                                                                           levels, plus the medical benefits paid to date and
                                                                                                                                                           projected to be paid for the life of the claim, plus the cost
                                                                                                                                                           of medical and vocational rehabilitation paid to date and
                                                                                                                                                           projected to be paid. Adjustment to current benefit levels
          The Washington Department                                                                                                                        shall be done by multiplying the weekly indemnity
          of Labor and Industries (L&I)                                                                                                                    benefit for each claim by the number obtained by dividing
          is a nearly monopolistic                                                                                                                         the statewide average weekly wage which will be in effect
          workers compensation writer                                                                                                                      for the year for which the premium is being calculated by
          in this state. Although L&I       The Nebraska Workers‟ Compensation Court (the                                                                  the statewide average weekly wage in effect during the
          may collect data on self-         state‟s workers‟ compensation agency) collects paid                                                            year in which the injury or date of the last exposure
          insurers, it is not relevant to   losses from self-insured employers, and it also      Self-insureds for workers compensation is handled by the occurred. The total value of the claims using the adjusted
          taxes and assessments on          collects self-insured payrolls broken down into NCCI Industrial Commission of Arizona. This question should be weekly benefit shall then be calculated by the executive
Remark:   insurers.                         rating classes.                                      directed to them.                                         director. Values for claims in which awards have been

                        Lee Barclay (WA)                Alan Wickman (NE)                                     Dean Ehler (AZ)                                             Robin Coombs (KY) collected on Kentucky workers
                                                                                                                                                                          The only assessment
                                                                                                                                                                          compensation insurance is the Special Fund Assessment.
                                                                                                                                                                          The assessment is administered by the Kentucky Workers
                                                                                                                                                                          Compensation Funding Commission, and their contact
                                                                                                                                                                          info is and 502 573 3505.

                                                                                                                                                                          KRS 342.122 (3) provides “The assessment for an
                                                                                                                                                                          insurance policy or other evidence of coverage providing
                                                                                                                                                                          a deductible may be collected in accordance with this
                                                                                                                                                                          chapter on a premium amount that equates to the
                                                                                                                                                                          premium that would have applied without the deductible.”

                                                                                                                                                                            “Premium” for insurers is defined in KRS 342.001(25)(a)
                                                        Premium taxes and assessments for the                                                                              as follows:
                        There is a United States        Compensation Court Cash Fund are both collected                                                                    "Premiums received" for policies effective on or after
                        Longshore          and          on written premiums. Premium taxes are based on                                                                    January 1, 1994, forinsurance companies means direct
                        Harborworkers     (USL&H)       written premiums net of dividends paid, while                                                                      written premiums as reported in the annualstatement to
                        Guaranty Fund, for which        assessments for the Compensation Court Cash                                                                        the Office of Insurance by insurance companies, except
                        assessments are based on        Fund are based on written premiums without a                                                                       that "premiums received" includes premiums charged off
                        USL&H premium written in        deduction for dividends. These are Annual                                                                          or deferred, and, on
                        Washington, as reported by      Statement premiums and are not adjusted in any                                                                     insurance policies or other evidence of coverage with
                        the insurers that have          fashion to recognize the discounts given to                                                                        provisions for deductibles, the calculated cost for
                        workers      compensation       deductible policyholders. Currently, we do not have                                                                coverage, including experience modification and premium
                        premium. There is a USL&H       assessments for our residual market, but such                                                                      surcharge or discount, prior to any reduction for
                        Assigned Risk Plan, which is    assessments could possibly occur with an unusual                                                                   deductibles. The rates, factors, and methods used to
                        actually a risk pool in which   loss situation. Such assessments would be                                                                          calculate the cost for coverage under this paragraph for
                        authorized insurers have a      collected based on Annual Statement written                                                                        insurance policies or other evidence of coverage with
                        50% share and L&I has a         premiums, without reduction for dividends paid.                                                                    provisions for deductibles shall be the same rates,
                        50% share. Assessments, if      There would be no adjustment to recognize             All taxes levied on workers compensation insurance is        factors, and methods normally used by the insurance
                        any, are based on USL&H         discounts given to deductible policyholders,          levied under Title 23 of the Arizona Revises Statutes. Title company in Kentucky to calculate the
                        premium, as reported by the     although we wouldn‟t view that as an inequitable      23 is administered by the Industrial Commission of           cost for coverage for insurance policies or other evidence
  Uses premium as the   insurers that have workers      situation as long as deductible reimbursement         Arizona. Please contact them for a response to this          of coverage without provisions for deductibles, except
5 basis                 compensation premium.           policies are not allowed.                             question.                                                    that, for insurance policies or other evidence of coverage

                       Lee Barclay (WA)           Alan Wickman (NE)                                       Dean Ehler (AZ)                                               Robin Coombs (KY)

                                                  The Workers‟ Compensation Trust Fund uses paid
                                                  losses as a basis, which includes losses paid under
                                                  deductible forms. There is no date restriction; that
                                                  is, the assessment applies to losses (medical +
                                                  indemnity) paid during the prior calendar year
                                                  regardless of when the loss occurred. The definition                                                                 There is no specific question regarding self-insured
                                                  is, “workers‟ compensation benefits paid by it (the                                                                  groups, but should you be interested Specifically for self-
                                                  insurer) during the preceding calendar year in this                                                                  insured groups, KRS 342.0011(24) defines premium for
                                                  state.” That is, it would appear that this definition                                                                such groups to include “ any and all membership dues,
                                                  would not include benefits paid under Nebraska law                                                                   fees, or other payments by members of the group to
                                                  out-of-state, but would include benefits under                                                                       associations or other entities used for underwriting, claims
                                                  other state laws, if paid in Nebraska. As a practical                                                                handling, loss control, premium audit, actuarial, or other
                                                  matter, I doubt that the bases that insurers use to     All taxes levied on workers compensation insurance is        services associated with the maintenance or operation of
                                                  allocate their paid losses have ever been               levied under Title 23 of the Arizona Revises Statutes. Title the self-insurance
                                                  challenged. I doubt that the difference in answers      23 is administered by the Industrial Commission of           group;”
  Uses losses as the                              between different possible allocation methods would     Arizona. Please contact them for a response to this          This is a link to the individual self-insured groups quarterly
6 basis                We are not aware of any.   be material.                                            question.                                                    report:
                             Larry Maslowski (ND)                                        Ronnie A. Demergian (WI)         Dick Cook (KS)                           Rae M. Taylor (OR)                        John Pedrick (OH)

                             Since North Dakota is a monopolistic state (Workforce
                             Safety and Insurance provides all work comp to North
                             Dakota employers)and we do not regulate this state entity
                             nor do we record statistics from them we are unable to
Extra Comments:              provide any meaningful response to your survey.

                                                                                                                                                                   Annual NCCI ratemaking provides
                                                                                                                                                                   aggregate large deductible
                                                                                                                                                                   experience. The attached quarterly
                                                                                                                                                                   form is used by the Insurance
                                                                                                                                                                   Division, excel worksheet titled
                                                                                                                          I am not aware of any information that   “Oregon LD Form.”                         Ohio is a monopolistic state for
                                                                                                                          we have that relates specifically to     The Workers‟ Compensation                 workers compensation insurance.
                                                                                                                          workers‟ compensation large              Division‟s premium assessment             Workers compensation is
                                                                                                                          deductible insurance other than the      quarterly form can be found at            administered by the Ohio Bureau of
                                                                                                                          carriers information when a large   Workers‟ Compensation (“BWC”).
                                                                                         Wisconsin does not allow large   deductible filing is made with our       /policy/bulletins/docconv_13847/910.pd    The Ohio Department of Insurance
  1 Sources of Information                                                               deductibles.                     department.                              f                                         has no data on this issue.
    State's system is
  2 reasonable equitable                                                                 N/A                              Yes
                         Larry Maslowski (ND)   Ronnie A. Demergian (WI)   Dick Cook (KS)   Rae M. Taylor (OR)   John Pedrick (OH)

3 Adequate information                          N/A                        Yes              No
                      Larry Maslowski (ND)   Ronnie A. Demergian (WI)   Dick Cook (KS)   Rae M. Taylor (OR)                       John Pedrick (OH)

                                                                                         For solvency it would be useful to
                                                                                         know what deposits are held by the
                                                                                         insurer for payment of claims under
                                                                                         the deductible. Cash and other real
                                                                                         assets are in the annual statement but
                                                                                         LOCs are not shown.
                                                                                         The Workers‟ Compensation Division
  Remark:                                                                                has questions abou
  Data Collected by
4 state                                      N/A                                         Yes.
          Larry Maslowski (ND)   Ronnie A. Demergian (WI)   Dick Cook (KS)                          Rae M. Taylor (OR)                          John Pedrick (OH)

                                                            1) Expenses necessary for the
                                                            administration of the workers‟          Workers‟ Compensation Division
                                                            compensation law. Specific statute is   collects self-insured information for the
                                                            K.S.A. 74-712. 2) Workers‟              Workers‟ Compensation Division
                                                            Compensation Fund. Specific statute     Premium Assessment. WCD Bulletin
                                                            is K.S.A. 44-566a. Both of the above    341 provides the details. It is updated
                                                            assessments are based on money          every May. The changes this year will
Remark:                                                     paid or payable in work                 include NCCI‟s new hazard groups. Th
                        Larry Maslowski (ND)   Ronnie A. Demergian (WI)                  Dick Cook (KS)                     Rae M. Taylor (OR)                         John Pedrick (OH)

                                               Domestics are not assessed a
                                               premium tax on workers compensation
                                               (or on any property & casualty
                                               business). Domestics pay a franchise
                                               tax which is 7.9% of Wisconsin
                                               apportionable income.
                                               There is a statutory tax rate of 2% for
                                               non-domestics. However, Wisconsin
                                               is both retaliatory and reciprocal and
                                               so the non-domestic actually pays
                                               whatever rate that the company‟s
                                               state of domicile would assess a
                                               Wisconsin domestic (0% to the
                                               highest rate).

                                               Taxable premium is any amount the
                                               insured would pay to obtain coverage
                                               less return premium. As a practical
                                                                                  Premium Tax, which is based on
                                               matter, the tax rate is applied to the                                       Oregon does not have a premium tax.        Ohio is a monopolistic state for
                                                                                  Direct Premiums on all risks written
                                               direct written premium reported on the                                       Domestic insurers pay excise tax.          workers compensation insurance.
                                               state page of the annual statement (Col 1 of Exhibit of Premiums and         Foreign insurers pay either excise tax     Workers compensation is
                                               plus any finance charge less       Losses) (Statutory Page 14 Data) plus     or retaliatory tax whichever is greater.   administered by the Ohio Bureau of
                                               dividends.                         all items listed in K.A.R. 40-1-9, less   These taxes can be offset by the           Workers‟ Compensation (“BWC”).
                                                                                  dividends paid (Col 3 of Exhibit of       Workers‟ Compensation Division‟s           Amounts assessed to employers by
  Uses premium as the                          The Wisconsin Compensation Ratings Premiums and Losses) (Statutory           premium assessment.                        the BWC are not subject to Ohio‟s
5 basis                                        Bureau also assesses companies.    Page 14                                   The Workers‟ Co                            premium or franchise tax. The BW
                       Larry Maslowski (ND)   Ronnie A. Demergian (WI)
                                              Worker‟s Compensation Division           Dick Cook (KS)                    Rae M. Taylor (OR)                       John Pedrick (OH)
                                              Assessment Sec. 102.75, Wis. Stats.,
                                              Administrative expenses.
                                              (1) The department shall assess upon
                                              and collect from each licensed
                                              worker's compensation insurance
                                              carrier and from each employer
                                              exempted under s. 102.28 (2) by
                                              special order or by rule, the proportion
                                              of total costs and expenses incurred
                                              by the council on worker's
                                              compensation for travel and research
                                              and by the department and the
                                              commission in the administration of
                                              this chapter for the current fiscal year
                                              plus any deficiencies in collections
                                              and anticipated costs from the
                                              previous fiscal year, that the total
                                              indemnity paid or payable under this
                                              chapter by each such carrier and
                                              exempt employer in worker's
                                              compensation cases initially closed
                                              during the preceding calendar year,
                                              other than for increased, double or
                                              treble compensation bore to the total
                                              indemnity paid in cases closed the                                         Oregon requires special workers‟         BWC “premiums” are experience-rated
                                              previous calendar year under this                                          compensation deposits, ORS 731.628.      and, therefore, take losses into
                                              chapter by all carriers and exempt                                         Insurers file an Oregon Special          consideration. However, as discussed
                                              employers other than for increased,                                        Schedule P. This is not a tax or         above, these “premiums” are not
                                              double or treble compensation. The                                         assessment. Incurred losses              subject to Ohio premium or franchise
                                              council on worker's compensation and                                       including IBNR are used except for the   taxes. The only way losses would be
  Uses losses as the                          the commission shall annually certify    Please see response to number 4   most current years, which use 65% of     indirectly included is if the premium
6 basis                                       any costs and expenses for worker's      above.                            earned premium.                          calc
                           David Withers (NH)                       Janice Moskowitz (NV)                     Tomasz Serbinowski (UT)            Janet Silverman (NY)                      Michael Riley (WV)

                                                                                                                                                 .pdf file and xls forms were
Extra Comments:                                                     .pdf file form was provided.                                                 provided.
                                                                    Nevada requires an informational filing                                      Attached please find data that is         At this time West Virginia is moving
                                                                    for each large deductible. See Bulletin                                      supplied to us by the New York            from a monopolistic state fund to an
                                                                    00-003, attached, for a description of                                       Compensation Insurance Rating             open market. Our markets will open
                                                                    this filing. The Nevada Division of                                          Board concerning large deductible         for competition on July 1, 2008. At this
                                                                    Industrial Relations (DIR) requires                                          policies. All of the loss data is gross   time we do not have any large
                           Since NH is an NCCI state they would insurers to report annually their                                                of deductibles. The premium shown is      deductible plans. Our current
                           be our source of information relating    reimbursements from deductibles.                                             both on a net and on a standard basis     exclusive carrier for workers
                           specifically to worker‟s compensation See FY06 WCS Workers‟                                                           (with and without companywide             compensation, BrickStreet Insurance,
                           large deductible insurance. NH does Compensation Claims Activity Report,                                              deviation, if approved, applied). There   offers a small deductible plan. Carriers
                           not require insurers to provide WC       PART 5 – RECOVERIES. The NCCI                                                is no way that one can determine from     will submit calls #20 and #21 to NCCI
                           large deductible reports accompanying Tax and Assessment Directory                 Utah does not have any special     this data the amounts reimbursed          for reporting purposes. Any
                           their annual statements, or other such instructs insurers to report premiums       reporting requirements for large   back from the insured to the insurer.     information concerning the large
                           reports or data to be submitted directly on a “gross basis.‟ See Page 2 of         deductible workers‟ compensation                                             deductible plans would be submitted
  1 Sources of Information to our department.                       Section 3 the Tax and Assessment          insurance.                         This data is used for rate revision       by NCCI.
    State's system is
  2 reasonable equitable No                                         Yes                                       Yes                                                                          Yes
                         David Withers (NH)                         Janice Moskowitz (NV)                       Tomasz Serbinowski (UT)   Janet Silverman (NY)                      Michael Riley (WV)

                                                                                                                                          I believe that if insureds are charged
                                                                                                                                          properly the assessments are charged
                                                                                                                                          fairly among self-insurers, employers
                                                                                                                                          insured with large deductibles and
                                                                                                                                          employers insured without large
                                                                                                                                          deductibles. Self-insurers are charged
                                                                                                                                          in proportion to their NY indemnity
                                                                                                                                          losses. Regular guaranteed cost
                                                                                                                                          policies are charged a NY
                         loss data is collected by the NH                                                                                 Assessment Fee which is determined
                         Department of Labor from insurers                                                                                as a factor (determined annually by
                         (page 14 data) and all self insurers                                                                             the NYCIRB) applied to an insured‟s
                         through reports submitted directly from    The DIR Assessment is allocated                                       standard premium. Employers insured
                         them to the DOL. This data is used as      between private insurers, self-insured                                with large deductibles can be charged
                         the basis to apportion the state‟s 2nd     employers and associations of self-                                   the NY Assessment Fee or charged
                         Injury Fund assessment and the WC          insured employers based on claims                                     the same factor applied to the
                         administrative assessment (provides        expenses paid. The claims expenses                                    deductible premium gross of premium
                         the funding for the Labor Department       included are listed in NAC 616B.707.                                  discounts plus all reimbursed losses.
                         to handle all other statutorily required   The private insurers‟ share is then                                   This maps the charge applied to
                         WC functions; this assessment is           divided among private insurers based                                  retrospectively rated policies. We
                         applied by insurers as an offset to        on earned premium gross of                                            have found that there is a direct
                         their premium tax liability). Because      deductible premium. This method is                                    relationship between NY indemnity
                         large deductible data is not included      equitable if insurers are reporting their                             losses and standard premium; that
                         the system is probably not entirely        deductible policies on a “gross basis”                                relationship is reflected in the factor
  Remark:                equitable.                                 as instructed.                                                        promulgated by the NYCIRB.
3 Adequate information   No                                         No                                          No
                      David Withers (NH)   Janice Moskowitz (NV)                        Tomasz Serbinowski (UT)                     Janet Silverman (NY)                     Michael Riley (WV)

                                           Compliance with our informational
                                           large deductible reporting information
                                           filing requirement is not 100%. Better
                                           compliance would help us track the
                                           claims administration on large
                                           deductible plans and provide
                                           information to the DIR as well as have
                                           better statistics to determine the
                                           market share attributable to large
                                           deductible policies. We do not                                                           Included in the rate revision is
                                           currently collect premium information                                                    standard premium shown separately
                                           on this informational filing.It would also                                               for first dollar policies and large
                                           be helpful to collect gross and net                                                      deductible policies. We are also given
                                           premiums so as to verify that insurers       Labor Commission would like to be           State Insurance Fund data on a
                                           are reporting gross of deductible for        able to track large deductible policies     standard basis.
                                           the purpose of the Division of               to assure compliance with state laws,
                                           Industrial Relations assessment and          particularly monitor that the claims are    We recognize that this information is
                                           to determine the market share                paid by insurer (state law requires first   rudimentary. We have not                 We do not have workers
                                           attributable to large deductible policies    dollar coverage) and only later are         concentrated on the market analysis      compensation large deductibles at this
  Remark:             Not certain.         for market analysis.                         reimbursed by the employer.                 aspect of large deductible policies.     time.

  Data Collected by
4 state               Yes                  Yes                                          Yes                                                                                  Yes
          David Withers (NH)                    Janice Moskowitz (NV)                  Tomasz Serbinowski (UT)                Janet Silverman (NY)                     Michael Riley (WV)

                                                                                       The state Tax Commission collects
                                                                                       information on claims, reserves, and   is collected by self-insurers and is
                                                                                       payroll for self-insureds. That        checked annually by the Self-            Currently, there is a Deficit Reduction
                                                                                       information is used to calculate       Insurance Office of the NY Workers       surcharge and a Regulatory surcharge
          loss data is submitted by all self-                                          estimated premium that is then used    Compensation Board (WCB).                mandated by the State of West
          insureds to the Department of Labor   . See attached instructions for        as basis for the assessments. All                                               Virginia for self-insurers. All self-
          and is used in the apportionment of   Summary of Insurer Claims Expense      assessments are based on premiums.     The loss-based assessments are           insured payroll is collected and the
          the WC administrative assessment      Form. Also see WCS Workers‟             There are no assessments based on     charged to self-insurers in proportion   surcharge assessment is payroll
Remark:   and the 2nd Injury Fund assessment.   Compensation Claims Activity Report.   claims.                                to their NY indemnity losses.            based.
                        David Withers (NH)                     Janice Moskowitz (NV)
                                                               Historically, the largest assessment    Tomasz Serbinowski (UT)                 Janet Silverman (NY) (calculated
                                                                                                                                               WC Guaranty Fund fees                      Michael Riley (WV)
                                                               has been the DIR Assessment. The                                                by the Taxes and Accounts Bureau of
                                                               majority of this assessment funds the                                           the Insurance Department) are based
                                                               overhead of the DIR. Smaller portions                                           on paid premium. Reimbursed losses
                                                               fund activities of the Division of                                              on large deductible policies are not
                                                               Insurance and the Attorney Generals                                             included. This is correct as NY
                                                               Office. The DIR assessment also                                                 requires a letter of credit for the losses
                                                               includes monies for the second injury                                           under the deductible and, presumably,
                                                               funds and the uninsured employer                                                the funds to be reimbursed are done
                                                               fund. The private insurer portion of                                            so immediately. The form can be
                                                               this assessment is based on actual                                              found at
                                                               earned premiums before deductible                                     
                                                               credits.                                There are three assessments that are    Click: Security Funds.
                                                                                                       based on premiums (U.C.A. 59-9-
                                                               The premium tax applies to private      101(2)) • Employers‟ Reinsurance        Loss-based assessments (calculated
                                                               insurers only, not self-insurers or     Fund – 7.25%                            by the Workers Compensation Board)
                                                               associations of self-insured            • Uninsured Employers‟ Fund – 0.50%     are calculated as follows. The total
                                                               employers. The base is direct written • Workplace Safety Account – 0.25%        NY indemnity losses for a fiscal year   The State of West Virginia is currently
                                                               premiums. Under NRS 680B.036, an                                                ending 3/31 are split up by type of     utilizing two surcharges that are
                                                               offset is allowed for the DIR           All assessments are based on “the net   “carrier” – commercial insurers, State  premium based, a Deficit Reduction
                                                               assessment. The assessment rate         written premium as calculated before    Insurance Fund and self-insurers. The   surcharge and a Regulatory
                                                               has historically been as high as the    any premium reduction for any insured   latter two have their assessments       Administration surcharge. Surcharge
                                                               premium tax rate so premium tax         employer‟s deductible, retention, or    calculated directly from those figures. calculations are assessed using the
                                                               generally has not applied to WC         reimbursement amounts”.                 Commercial insurers pay their           premium collected for the total manual
                                                               premiums.                                                                       percentage of the total commercial      premium, inclusive of premium for
                                                                                                       U.C.A. 34A-2-202 provides specific      insurer assessment. That percentage     standard employers‟ liability coverage,
                                                                    NRS 680B.036 General tax on        formula to be used to calculate         is calculated as the ratio of their paidincludes any premium collected for
                                                               premiums: Credit for policies of        premium to be used as a basis for       premium (as reported in the attached    coal-workers‟ pneumoconiosis and
                        Premium Tax – calendar year direct     industrial insurance. Each insurer      assessment for self-insureds. The       form) to the total paid premium for all mandatory terrorism endorsements,
                        premium written, as reported on page   providing industrial insurance in this  premium is calculated using NCCI        commercial insurers.                    and is net of any application of an
                        14                                     state pursuant to chapters 616A to      prospective loss costs, lost cost                                               experience modification factor and is
  Uses premium as the       Guaranty Fund – CY DWP, page       617, inclusive, of NRS is entitled to a multiplier of 1.1 and experience        I believe that it is the opinion of the net of any state approved debit/credit
5 basis                 14                                     credit against the premium tax paid     modification factor.                    WCB that the premium figures include rating plan.
                       David Withers (NH)                    Janice Moskowitz (NV)                  Tomasz Serbinowski (UT)               Janet Silverman (NY)                Michael Riley (WV)

                                                              Private insurer losses are used only to
                                                              allocate the DIR assessment between
                                                              the private insurers, the self-insured
                                                              employers and the associations of self-
                                                              insured employers as described in the
                       to Fund DOL WC Function : Calendar response to question 2. Premiums
                       year Paid Loss (Pg 14)                 are used to allocate this assessment
                            2nd Injury Fund: CY Paid Loss     among private insurers. Losses are
                       (Pg 14)                                used to allocate the assessment
                                                              among self-insured employers and
                        Note: This calendar year data is      associations of self-insured
                       applied against fiscal year assessment employers. See attached Summary of
                       amounts.                               Premium Earned and Claims                                                   Loss-based assessments for the State
                              For example 2005 Pg 14 data     Expenditures and Summary of Insurer                                         Insurance Fund and self-insurers are
  Uses losses as the   would be used for FY 2007              Claims Expenditures forms and           There are no assessments based on   determined from NY indemnity losses
6 basis                apportionment.                         instructions.                           losses.                             (see “5”, above).                    N/A
                           Mike Shinnick (TN)                      Nicole Elliott (TX)                     Steve Manders (GA)          William R. Lacy (AR)   Kevin Conley (NC)

Extra Comments:
                                                                 We have Schedule Z data (from                                                                In the context of the 2006 annual WC
                                                                 NCCI) for large deductibles. Schedule                                                        rate filing (received on 9/1/06 for a
                                                                 Z data includes losses by injury type                                                        4/1/07 effective date), we asked for
                                                                 and exposure, both are separated by                                                          and received detailed policy level and
                                                                 class code. We also collect                                                                  claims level databases that did include
                                                                 deductible information via a quarterly                                                       an identifier as to whether the policy or
                                                                 data call and the results are published                                                      claim arose from a large deducible
                                                                 in the Quarterly Legislative Report on                                                       policy. In this database, large
                           Non credited large deductible premium Market Conditions. These reports can                                                         deductibles were defined as $100K
                           is reported to the Workers‟           be found at the bottom of                                                                    and higher. Our focus here was not
                           Compensation Advisory Council                                                    tax and assessment equity, which is
                           annually as part of a Market          4.html. The quarterly call instructions                                                      the focus of your survey, but instead,
                           Conditions presentation. Data is      can be found at                                                                              the growing disparity between financial
  1 Sources of Information reported by NCCI.            Rating organization data.   N/A                    data and stat plan data in WC, both of
    State's system is
  2 reasonable equitable No                                                                                Yes                         Yes                    Yes
                         Mike Shinnick (TN)                      Nicole Elliott (TX)                    Steve Manders (GA)                  William R. Lacy (AR)   Kevin Conley (NC)

                         Guarantee and Second Injury Funds       Answer from Self Insured perspective
                         are funded from the premium tax.        only…Whether this is done
                         Large deductible insureds pay a lower   "reasonably equitable" is hard to say
                         amount of premium tax than do self      in that the private Certified Self-
                         insureds and guaranteed cost            Insured Employers only make up
                         policyholders since large deductible    about 10% of the whole workers'
                         premium credits are applied to the      compensation market. However,
                         premiums. Credits on average have       based on the current 47 active CSI's
                         ranged from 73% to 78% over the past    and the previous 43 companies who
                         several years.                          withdrew from the program, there have
                         We do not have information available    been no known concerns raised about
                         to assess costs on a reasonable         the process or amount of
                         equitable basis.                        assessments made to the private       This is done by the State Board of
  Remark:                                                        Certified Self-Insured Employers.     W/C not the Insurance Dept.
3 Adequate information   Yes                                     Yes                                   Yes                                  Yes
                      Mike Shinnick (TN)   Nicole Elliott (TX)   Steve Manders (GA)   William R. Lacy (AR)   Kevin Conley (NC)

                                                                                                             See #1. We have enough information
                                                                                                             now to do a reasonable estimate as to
                                                                                                             how much higher the assessment or
                                                                                                             taxation base would be if we wanted to
                                                                                                             put all employers on a first dollar basis
  Remark:                                                                                                    for tax purposes.

  Data Collected by
4 state               Yes                  Yes                   Yes                  No                     Yes
          Mike Shinnick (TN)                       Nicole Elliott (TX)                         Steve Manders (GA)                 William R. Lacy (AR)   Kevin Conley (NC)

                                                   a. Texas Self-Insurance Regulatory
                                                   Fee - for private Certified Self-Insured
                                                   Employers - uses the employers‟
                                                   indemnity payments made in the
                                                   preceding calendar year to calculate
                                                   this administrative fee.
                                                   b. Texas Workers‟ Compensation
                                                   Maintenance Tax - for private Certified
                                                   Self-Insured Employers - is based on
                                                   the amount of liabilities for Texas
                                                   workers‟ compensation claims that
                                                   occurred in the previous year including
                                                   claims incurred but not reported
                                                   c. Texas Workers‟ Compensation
                                                   Research Maintenance Tax - for
                                                   private Certified Self-Insured
                                                   Employers - is based on the same            W/C Board administrative
                                                   Certified Self-Insurer tax base as the      assessment.
                                                   Texas Workers‟ Compensation                                                                           Self insured employers are required to
                                                   Maintenance Tax.                                                       Self-                          submit payroll by class annually to
                                                   More detailed info here:                    insured insolvency pool.                                  Dept. of Revenue so that they can
          Payroll, experience modifications, and   SITF                                                      calculate imputed first dollar premium
Remark:   NCCI class.                              html#feetax                                                                                           and tax accordingly.
                        Mike Shinnick (TN)                       Nicole Elliott (TX)                         Steve Manders (GA)              William R. Lacy (AR)                  Kevin Conley (NC)

                                                                 Here is a link to the comptroller's web
                        Premium taxes: 4.4% (.4% does not        page for insurance taxes. 25-100 is
                        apply to any employer who employs        for premium taxes. 25-102 is the                                                                                   NC uses state page DWP as its
                        10 or less employees unless such         maintenance tax form. The link for 25-                                                                             premium tax base, except for self
                        employer is in the business of           300 is the instructions for maintenance                                                                            insureds (see #4). No state agency
                        construction or manufacturing) of        taxes.                                                                                                             assesses any provider of WC
                        premium collected for workers‟                                                                            insurance for second injury funds or
                        compensation.                            xforms/25-forms.html                                                                                               for WC agency budgets. Self insureds,
                        Residual market assessments:             25-102 related to maintenance taxes                                                                                either group or individual, are not
                        Tennessee Workers‟ Compensation          states that premium is defined as                                                                                  assessed for guaranty funds or
                        Insurance Plan reinsurance               gross premiums less dividends prior to                                                                             residual markets. These latter
                        mechanism assesses plan deficits         application of any deductible credits.                                                                             assessments are done by the North
                        based upon the participating carrier‟s   See here for further definition of gross                                    An additional premium tax is levied on Carolina Insurance Guaranty
                        share of the voluntary workers           premium and deductible credit:              Residual market net WP          workers compensation premiums for      Association and by the NCCI. I am
                        compensation premium. (Direct     Insolvency pool net WP          use of the Arkansas Workers            told that the NCCI excludes large
  Uses premium as the   premium written: Not defined)            ac$ext.ViewTAC?tac_view=5&ti=34&pt          State Board Assessment net WP   Compensation Commission and is         deductible policies entirely from its
5 basis                                                          =1&ch=3&sch=GG&rl=Y                         Fraud assessment net WP         collected by it.                       residual market assessment base.
                       Mike Shinnick (TN)   Nicole Elliott (TX) answer as #4,
                                            Essentially the same                      Steve Manders (GA)   William R. Lacy (AR)   Kevin Conley (NC)
                                            with some more detail.

                                                                      a. The Texas
                                            Self-Insurance Regulatory Fee
                                            assessed to private Certified Self-
                                            Insured Employers covers the
                                            administrative costs of Self-Insurance
                                            Regulation incurred by the Division of
                                            Workers‟ Compensation (DWC) in
                                            implementing the Self-Insurance
                                            Program in the Texas Workers‟
                                            Compensation Act (Act). Self-
                                            Insurance Regulation uses the
                                            Certified Self-Insurer‟s indemnity
                                            payments made in the preceding
                                            calendar year to calculate the fee.
                                            b. The Texas Workers‟ Compensation
                                            Maintenance Tax assessed to private
                                            Certified Self-Insured Employers is
                                            authorized by the Act to pay for
                                            DWC‟s cost of administering the Act.
                                            It covers the operations of DWC,
                                            excluding Self-Insurance Regulation,
                                            which is paid directly by the CSIs
                                            through the regulatory fee. The tax
                                            collected by DWC from the CSIs is
                                            based on the claims liabilities that                                                  No assessments in NC are based on
                                            occurred in the previous year. Claim                                                  losses, either by a state agency or by
                                            liabilities include indemnity payments,                                               the entities mentioned in #5. Premium,
                                            medical payments, expense                                                             or at least imputed premium, is always
  Uses losses as the                        payments, indemnity reserves,                                                         used as the base for all WC taxes
6 basis                None                 medical reserves, expense reserves        SITF paid losses     N/A                    and assessments in NC.
                           Angela Nelson (MO)                      Tracy Valentino (OH)                  Joanne Starace (CT)                    Nancy Myers (MN)                     Alan Seeley (NM)

                           Form in word document format is
Extra Comments:            provided.
                                                                                                         At one time, the Connecticut
                                                                                                         Insurance Department collected
                                                                                                         information regarding losses paid
                                                                   Ohio is a monopolistic state for      within the deductible amount as part of
                           Missouri assesses an Administrative     workers‟ compensation purposes. The the Connecticut page 14 data of the
                           Surcharge on large deductible           Ohio Bureau of Workers‟               Annual Statement, similar to the
                           policies, for that portion of premium   Compensation (BWC) does not collect recommendation of the NAIC Workers
                           that would have been subject to the     information from other insurers. The Compensation Large Deductible
                           Administrative tax. This tax is what    Ohio BWC does offer a large           Study. This was discontinued in the
                           funds the Division of Workers‟          deductible program called the         late 1990‟s. The department also
                           Compensation operations. Carriers       retrospective rating program (retro). required that a copy of a large
                           are required to make quarterly and      A copy of the information for the     deductible policy be filed with the
                           annual reconciliations. A copy of       retrospective rating program is       department. This is no longer required. Minnesota does not have any large
  1 Sources of Information those forms are attached.               attached to this email.               Assessments are now calculated in a deductible reports.                     None.
    State's system is
  2 reasonable equitable No                                        Yes                                   Yes                                    Yes                                  No
                         Angela Nelson (MO)                       Tracy Valentino (OH)   Joanne Starace (CT)                          Nancy Myers (MN)   Alan Seeley (NM)

                                                                                         Connecticut‟s system eliminates the
                                                                                         effects of deductibles as regards
                                                                                         For the Workers Compensation
                                                                                         assessment, the Insurance
                                                                                         Department instructs the company
                                                                                         (Bulletin PC-49) to pay the Workers
                                                                                         Compensation assessment based on
                                                                                         the total amount of the claim, including
                                                                                         the deductible portion of the loss.
                         The problem/concern that we have is                             For the Second Injury Fund, the
                         that there is currently no mechanism                            Connecticut General Statutes state
                         to validate the information being                               that the surcharge is based on the                              Roughly 35% to 40% of New Mexico‟s
                         reported by the carriers. The                                   premium before the deductible credit.                           workers compensation exposures are
                         Administrative Surcharge information                            See definition of “Second Injury Fund                           handled by self‟insured groups, which
                         that we obtain from the carriers is self-                       surcharge base” in CGS Sec. 31-349g                             are regulated by New Mexico‟s
                         reported. If there was a means that                             (4).                                                            Workers Compensation Administration
                         would enable us to validate the                                 If no, please describe the nature of the                        rather than by the Insurance
                         information we are being provided, we                           inequity, and also indicate whether you                         Department and which are NOT
                         would have greater confidence that all                          now have the data or information                                subject to residual market
                         carriers are bearing their share of the                         available for costs to be assessed on                           assessments, guarantee fund
  Remark:                burden.                                                         a reasonably equitable basis.                                   assessments or premium taxes.
3 Adequate information   No                                        No                    Yes                                                             No
                      Angela Nelson (MO)                      Tracy Valentino (OH)                      Joanne Starace (CT)                   Nancy Myers (MN)                    Alan Seeley (NM)

                                                                                                        The department hasn‟t had any
                      We would like to be able to track the                                             complaints regarding deductible
                      number of policies, risks being insured                                           policies. Connecticut has a robust and
                      under this option; we would want to be                                            competitive workers compensation
                      able to track claims and losses; and                                              marketplace.
                      finally we would want to know total                                               If not, what additional information do
                      dollar amount of premium for large       The BWC‟s Retrospective program is       you feel would be useful for this
                      deductible policies, the total amount of limited to less than 300 employers per   purpose and how would that             Minnesota does not do any market   I’m not sure what market analysis
  Remark:             deductible credits.                      year.                                    information be used?                   analysis.                          needs we have at the moment.

  Data Collected by
4 state               Yes                                     Yes                                       Yes                                   Yes                                 No
          Angela Nelson (MO)                      Tracy Valentino (OH)
                                                  The BWC collects information yearly          Joanne Starace (CT)                     Nancy Myers (MN)                          Alan Seeley (NM)
                                                  from each self insuring employer (SI)
                                                  on the compensation and medical paid                                                  Assessment: Special Compensation
                                                  in the aggregate for each self-insuring                                               Fund (MN Statute §176.129,176.131-
                                                  employer. These amounts are verified                                                  132,176.183)
                                                  by BWC‟s SI auditors when they are at                                                 The major WC assessment in
                                                  the company performing an audit.                                                      Minnesota is the one for the Special
                                                  The BWC will assess the self insuring                                                 Compensation Fund (SCF) which is
                                                  employer based upon the paid                                                          administered by the Department of
                                                  compensation reported. The                                                            Labor and Industry (DOLI). The SCF
                                                  assessments are for a guaranty fund                                                   assessment pays the operating
                                                  to pay for the claims of the employers                                                expenses of the WC divisions of
                                                  that have defaulted on their SI                                                       DOLI, the Office of Administrative
                                                  liabilities, a surplus fund for other                                                 Hearings and the WC Court of
                                                  costs such as claim reimbursements                                                    Appeals, and also funds special
                                                  for overturned claims, physician                                                      statutory WC programs. Most of the
                                                  exams, etc.., a handicap (second                                                      assessment dollars pay for
                                                  injury) fund, a claim rehabilitation fund,                                            supplementary and second-injury
                                                  and are assessed the portion of                                                       benefits, two programs discontinued in
                                                  administrative costs for the Ohio            Workers Compensation Fund                1995 and 1992, respectively, but
                                                  Bureau of Worker‟s Compensation              Assessment: Self Insureds report their which will have outstanding liabilities
                                                  (BWC) and the Ohio Industrial                paid indemnity and medical losses for for many years.
                                                  Commission (IC) that are attributable        the prior calendar year to the Office of
                                                  to SI employers.                             the Treasurer. Data collected: Paid      Data collected from self-insureds:
                                                  The SI employer has the option of            losses. CGS 31-45                        paid indemnity losses
                                                  participating in the handicap and            Second Injury Fund Surcharge: Self       The allocation of the SCF assessment
          We receive a Table 1 report from the    rehab funds and most elect not to            insureds report their paid indemnity     between self-insured and insured
          self-insured companies indicating their participate. Additionally, the SI            and medical losses for the prior         employers is based on paid indemnity
          payroll for the calendar year. The tax employers are billed dollar for dollar        calendar year to the Office of the       losses in the past year as reported to
          rate set by the Missouri Department of on all Disabled Workers Relief Fund           Treasurer on July 1 and pay the          DOLI. The same base, paid indemnity
          Labor and Industrial Relations,         (DWRF) costs paid on behalf of SI            assessment each quarter based on         losses, is used to allocate the self-
          Division of Workers‟ Compensation is employers. The DWRF costs provide               25% of the losses. Data collected:       insured portion of the assessment
Remark:   applied to the Standard Premium.        for cost of living increases on PTD          Paid losses.                             among the self-insured employers.
                        Angela Nelson (MO)
                        Workers‟ Compensation                     Tracy Valentino (OH)                    Joanne Starace (CT) Fund
                                                                                                          Workers Compensation                    Tax: premium (MN)
                                                                                                                                                  Nancy Myers tax (MN Statute             Alan Seeley (NM)
                        Administrative Tax - Tax on the direct                                            Assessment: The basis is Standard       §297I.05)
                        written workers‟ compensation                                                     Premium as defined in the NCCI Basic    Base: Gross premium less returned
                        premiums at the rate set by the                                                   Manual:                                 premiums (including dividends) on all
                        Missouri Department of Labor and                                                  Standard Premium is the premium         direct business received during the
                        Industrial Relations, Division of                                                 before the application of the premium   preceding calendar year.
                        Workers‟ Compensation. Direct                                                     discount.
                        written premium is total amount of net                                            It is the state premium determined on   Assessment: Special Compensation
                        deposits, net premium, or net                                                     the basis of:                           Fund (see answer to #4)
                        assessments received, whether in                                                   • Authorized rates                     Base: paid indemnity losses and
                        cash or notes, in this state or on                                                 • Disease loadings                     Designated Statistical Reporting
                        account of business done in this                                                   • Nonratable elements                  Premium
                        state…agrees with the amount                                                       • Aircraft seat surcharges             • The allocation of the SCF
                        reported on the annual statement.                                                  • Premium for increased limits of      assessment between self-insured and
                        Workers‟ Compensation                     BWC pure premium assessments            liability                               insured employers is based on paid
                        Administrative Surcharge - Missouri       cover the medical and indemnity          • Experience rating modification       indemnity losses in the past year as
                        assesses an Administrative Surcharge      payments for injured worker claims.      • Applicable schedule rating           reported to DOLI.
                        on large deductible policies, for that    There are additional assessments that modification                              • The allocation of the insured portion
                        portion of premium that would have        non-self-insured employers also pay      • Minimum premiums                     of the assessment is allocated among
                        been subject to the Administrative tax.   (self-insured assessments are listed in Second Injury Fund: The Second          insurers based on the Designated
                          The rate used is the same as that       #4 above). These additional             Injury Fund Surcharge base is defined   Statistical Reporting (DSR) Premium,
                        used for the Workers‟ Compensation        assessments include; 1)                 in the Connecticut General Statutes:    as reported to the Minnesota rating
                        Administrative Tax.                       administrative costs to support the     Sec. 31-349g (4):                       bureau (Minnesota Workers‟
                        Workers‟ Compensation Second Injury       operations of the Ohio Bureau of        "Second Injury Fund surcharge base"     Compensation Insurers Association).
                        Fund- this is assessed by the Missouri    Workers‟ Compensation (BWC) and         means direct written premium on         DSR premium is the (earned) premium
                        Department of Labor and Industrial        the Ohio Industrial Commission (IC);    policies prior to application of any    calculated using the MN pure premium
                        Relations, Division of Workers‟           2) DWRF to provide cost of living       deductible policy premium credits.      base rates, adjusted for experience
                        Compensation.                             increases to PTD injured workers; 3)    Premium Tax: Per CGS 38a-377(c),        modification factors, but not for any    Premium taxes, residual market
                        Guaranty Fund Assessments -               Safety and Hygiene assessment to        the term "premium" shall include all    other discounts, credits, or surcharges. assessments and guaranty fund
                        Members are assessed to cover             fund the BWC‟s safety services and;     premiums, membership fees,                                                       assessments all use premium as the
                        insolvent insurers based on market        4) An assessment to cover the           assessments, dues and any other         Assessment: MN Insurance Guaranty assessment basis. I don‟t know how
  Uses premium as the   share administered by the Missouri        premium obligations of employers that consideration for insurance.              Association                              premium is defined in these three
5 basis                 Guaranty Fund. Assessments are            default on their premiums.              Guaranty Fund Assessment: Per CGS       Base: Direct written premium less        instances.
                       Angela Nelson (MO)                     Tracy Valentino (OH)                    Joanne Starace (CT)                      Nancy Myers (MN)                       Alan Seeley (NM)

                                                                                                    Workers Compensation Fund
                                                                                                    Assessment for insureds: Assessment
                                                                                                    is collected from Insureds based on
                                                                                                    Standard Premium as defined in the
                                                                                                    NCCI Basic Manual (see above), but
                                                                                                    is collected from insurance companies
                                                                                                    based on paid indemnity and medical
                                                                                                    losses. The definition of paid losses is
                                                                                                    “the total compensation and payment
                                                                                                    for hospital, medical and nursing care
                                                                                                    made by such private insurance
                                                                                                    carrier acting on behalf of any such
                                                                                                    (CGS 31-345)
                                                                                                    Note: There is no direct matching of
                                                                                                    the amount collected from insureds
                                                                                                    with the amount of the assessment
                                                                                                    paid by insurance companies because
                                                                                                    it is paid by insureds on a premium
                                                            All of the BWC‟s premium and            basis and collected from insurance
                                                            assessments are based on loss           companies on a loss basis.
                                                            information including medical and       Workers Compensation Fund
                                                            indemnity payments.                     Assessments for self-insureds: The
                                                            The premium assessments for SI and assessment is based on paid losses.             Assessment: Special Compensation
                                                            state agency employers are based on The assessment is based on paid                Fund Assessment
                                                            paid losses.                            indemnity and medical losses defined       Base: The allocation of the SCF
                                                            The premium assessments for non-SI as “the total compensation and                  assessment between self-insured and    We have an Uninsured Employers
                                                            private employers and public employer payment for hospital, medical and            insured employers is based on paid     Fund whose assessments are based
                                                            taxing district employers are based on nursing care made by such self-             indemnity losses in the past year as   on paid losses, indemnity and medical
  Uses losses as the   There currently is no tax or         incurred costs from the oldest 4 of the insured”.                                  reported to DOLI. See answers to #4    included. I don‟t remember the
6 basis                assessment based on the losses paid. last 5 calendar years.                  (CGS 31-345).                              and #5.                                specific details.
                            Clark E. Simcock (DC)

Extra Comments:

                           The District of Columbia is a NCCI
                           State and as such NCCI files the
                           Workers Comp Rates for all insurers
                           licensed to write in DC. While DC
                           allows large deductibles it has no
                           special calls to collect data regarding
  1 Sources of Information that segment of that line of business.
    State's system is
  2 reasonable equitable No
                         Clark E. Simcock (DC)

                         The Department of Insurance,
                         Securities and Banking assesses on a
                         total of all lines of insurance written
                         premiums from the State Page of the
                         Annual Statement and has no
                         separate special workers comp
                         assessment. However, the
                         Department of Employment Services,
                         Workers Comp Division does have a
                         special assessment, this is based on
                         written premiums for insurance
                         companies from the State Page of the
                         Annual Statement and paid losses
                         reported by the self-insured. Some of
                         the self-insured had complained that
                         they are paying a higher assessment
                         amount do to the large deductible
                         policies being written by the insurance
  Remark:                companies.
3 Adequate information   No
                      Clark E. Simcock (DC)

                      At the current time DC does not
                      provide any market analysis for this
  Remark:             segment of the business.

  Data Collected by
4 state               No
          Clark E. Simcock (DC)

          As indicated in number 2 above, self-
          insured feel that they pay more than
Remark:   they should.
                        Clark E. Simcock (DC)

  Uses premium as the   Again as I outlined in Number 2 above
5 basis                 all the assessments for DC.
                       Clark E. Simcock (DC)

  Uses losses as the   Again as I outlined in Number 2 above
6 basis                all the assessments for DC.
                     Dave Bellusci (CA)                                 Martin G. Heagen (NY)                                    Ralph Hermann (WI)
                                                                                                                                 Wisconsin does not
                                                                                                                                 allow the use of
                                                                         A. Aggregate Financial Data Calls on a Policy
                                                                        Year and Accident Year Basis
                                                                        Deductible experience is separately collected by
                                                                        the New York Compensation Insurance Rating
                                                                        Board on an annual basis from each carrier that
                                                                        writes large deductible business in New York.
                                                                        Large deductibles, for this purpose, are defined as
                                                                        deductibles of $100,000 or more under a carrier
                                                                        deductible program approved by the New York
                                                                        State Insurance Department.

                                                                        Up to twenty years of policy year and accident year
                                                                        data is required to be reported, depending on when
                                                                        a carrier began writing this business in New York.
                                                                        Standard premiums are reported on „Gross of
                                                                        Deductible Basis‟ (as if no deductible applied), but
                                                                        WC net earned and net written premiums are also
                                                                        reported, which would contain the effect of
                    In California, insurers annually report their       deductible credits. On the policy year submission,
                    aggregate loss and premium by                       there is also a data field for reporting the actual
                    calendar/accident year in a call for large          deductible credits for each year on an earned
                    deductible experience. (Large deductible            basis. Calendar year premium information can be
                    policies are defined as those with a deductible     derived from the policy year call data for each
                    of $100,000 or greater.) The premium and            carrier.
                    losses are both reported on a first dollar basis.
                    Also reported annually is a reconciliation          Losses (paid, case reserves and IBNR, separately
                    between Statutory Annual Statement Page 15          for indemnity and medical) are required to be
  List and describe information and CIRB call data, which includes      reported only on a „Gross of Deductible Basis‟ (as if
  the data set      the amount of deductible credits reflected in       no deductible applied). There is not any data field
  reported by the   calendar year earned premium and incurred           for reporting losses net of the deductible
1 insurers          losses.                                             reimbursements.
                    The California Department of Workers‟
                    Compensation bases a number of their
                    assessments (e.g. fraud, user funding) on           The Rating Board does not report any carrier data,
  Data used or      WCIRB written premium information, which            large deductible or otherwise, to the state for tax or
  reported to the   reflects premium on a basis prior to adjustment     assessment purposes. Carriers report directly to
2 states            for deductible credits.                             the state for these purposes.
                      Frederick A. Huber (NJ)                                     Tim Wisecarver (PA)   Craig Anderson (MN)

                                                                                  See attached

                                                                                                        The Minnesota Workers Compensation Insurers
                                                                                                        Association (MWCIA) collects two general types
                                                                                                        of data, unit statistical and financial. Unit
                                                                                                        statistical data is reported on each policy issued.
                                                                                                        It contains exposure and loss information, gross
                                                                                                        of deductible credits, both large and small.
                      Experience for policies that include deductible                                   Deductible policies are identified by type of
                      arrangements is collected via the New Jersey                                      deductible, i.e., indemnity, medical, indemnity +
                      Schedule W – “Large Risk, Large Deductible                                        medical, per claim, per accident, per policy,
                      Coverage Only” and New Jersey Schedule Q – “Large                                 percent of claim cost, percent of premium, etc.
                      Risk, Large Deductible Coverage Only” reports. The                                Deductible premium is reported by statistical
                      Schedule W is an aggregate report of premium and                                  code.
                      loss data by policy year. The Schedule Q is an
                      aggregate report of losses by accident year. Premium                              Financial data is aggregate summary data
                      collected in the Schedule W is on a gross and net                                 submitted yearly by each carrier/group. It
                      basis. Losses in the Schedule W and Q are provided                                contains the latest 20 years worth of policy year
                      in detail (paid, outstanding and IBNR and bulk                                    and calendar-accident year premium and loss
                      reserves) on a gross basis and are provided in total on                           data. As with unit statistical data, all financial
                      a net basis.                                                                      data loss amounts are required to be reported
                                                                                                        gross of deductibles. Carriers writing large
                      Experience for policies that include deductible                                   deductible policies are required to separate this
                      arrangements is also collected via the New Jersey                                 data set, and report it in its own unique financial
                      Statistical Plan. The Statistical Plan collects data on                           call. To qualify as a large deductible, the
                      an individual policy basis. Policies with deductibles are                         deductible amount per claim or accident cannot
                      identified by a unique code that identifies the premium                           be less than $100,000. Premium on large
                      credit. Losses are collected on a gross basis only.                               deductible calls is reported at three levels:
                                                                                                        MWCIA designated statistical reporting (DSR)
  List and describe   Premium credits for policies with deductible                                      level, standard at company level (both gross of
  the data set        arrangements are also reported via the New Jersey                                 large deductible credits), and net earned
  reported by the     Mid-Year Report of Premiums. No loss data is                                      premium (net of large deducible credits).
1 insurers            collected via this report.
                                                                                                        Yes. Premium at the MWCIA DSR level (gross of
                      The New Jersey Mid-Year Report of Premiums is used                                deductibles) is used as an exposure base to
                      in apportioning the Rating Bureau assessment among                                compute MN Workers Compensation
  Data used or        our member insurers. Premiums are not reduced by                                  Reinsurance Association, MN Special
  reported to the     the deductible credits when determining the                                       Compensation Fund, and MWCIA
2 states              assessment amounts.                                                               premiums/assessments.

Description: New York Workers' Compensation Statutes document sample