The Oregon Administrative Rules contain OARs filed through November 15, 2015
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DEPARTMENT OF CONSUMER AND BUSINESS SERVICES,
INSURANCE DIVISION
DIVISION 43
WORKERS' COMPENSATION INSURANCE RATING SYSTEM AND AUDIT PROCEDURES
836-043-0001
Statutory Authority; Purpose;
(1) OAR 836-043-0001 to 836-043-0091 are adopted by the Insurance Commissioner pursuant to the authority and requirements of ORS 656.427, 656.730 and 731.244 for the purpose of implementing ORS 656.427, 656.730, and 737.265, and may be cited as the Oregon Workers' Compensation Insurance Plan (the "Plan" or "WCIP").
(2) The Oregon Workers' Compensation Insurance Plan provides for the equitable apportionment among workers' compensation insurers of employers who are in good faith entitled to workers' compensation insurance, but who are unable to procure such insurance in a regular manner.
(3) The Plan applies to all authorized workers' compensation insurers and the State Accident Insurance Fund Corporation, their agents and the Plan Administrator.
Stat. Auth.: ORS 656.427, ORS 656.730 & ORS 731.244
Stats. Implemented: ORS 656.427, ORS 656.730 & ORS 737.265
Hist.: IC 1-1979(Temp), f. & ef. 10-12-79; IC 1-1980, f. & ef. 1-15-80; IC 1-1982, f. 1-15-82, ef. 7-1-82; ID 10-1989(Temp), f. & cert. ef. 11-3-89; ID 7-1990, f. 4-30-90, cert. ef. 5-1-90; ID 18-1990(Temp), f. & cert. ef. 8-6-90; ID 1-1991, f. & cert. ef. 2-19-91; ID 13-1992, f. & cert. ef. 8-12-92; ID 4-1994, f. & cert. ef. 4-19-94; ID 10-1996, f. 6-27-96, cert. ef. 7-1-96
836-043-0005
Definitions for the Workers' Compensation Insurance Plan
As used in OAR 836-043-0001 to 836-043-0091:
(1) "Affiliated insurer" or "affiliate" means an insurer that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, another insurer specified, and is required to participate in the Plan pursuant to OAR 836-043-0009. For purposes of this definition, "control" means possession, direct or indirect, of the power to direct or cause the direction of the management and policies of an insurer, whether through the ownership of voting securities, by contract or otherwise. Control is deemed to exist if any person or business enterprise, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies, representing ten percent or more of the voting securities of any other insurer.
(2) “Application” means the form approved for use in the assigned risk market by the Plan Administrator for the purpose of securing workers compensation insurance under the Plan, which contains the required information as described in NCCI’s Assigned Risk Supplement to the Basic Manual for Workers’ Compensation and Employers Liability Insurance.
(3) “Assigned risk market” means a state insurance plan that provides employers unable to secure coverage in the voluntary market with a means for insuring their operations through a designated insurance carrier.
(4) “Assigned Carrier Performance Standards” means the minimum level of performance for servicing carriers writing coverage on behalf of the Plan. The purpose of the Assigned Carrier Performance Standards is to provide policy issuance and service level requirements that servicing carriers must adhere to in order to provide assigned risk market policyholders with uniform service while reducing the overall loss ratio.
(5) “Board” means the Board of Directors or governing entity of the reinsurance organization selected by the Director to implement the assigned risk plan under ORS 656.730.
(6) “Bona Fide Premium Dispute” means a disagreement relating to a workers’ compensation premium established under OAR 836-043-0071(1).
(7) "Client" means any person to whom workers are provided under contract and for a fee on a leased basis.
(8) “Common management interest” means an interest that exists when one or more individuals are or were owners or officers of, or performs or performed management functions for, two or more entities, or for a succession of entities.
(9) "Employer" means any business organization or enterprise that has a statutory right to maintain workers' compensation insurance in Oregon. “Employer” includes:
(a) Any business organization or enterprise that is affiliated at any time as a result of common management or ownership; or
(b) A client business of a worker leasing company as established in ORS 656.850.
(10) “Governing state” means the state that generates the largest amount of payroll.
(11) “Insured” means the employer designated in the information page of a policy to which this Plan is applied and issued by a servicing carrier.
(12) “Insurance Commissioner” means the Director of the Department of Consumer and Business Services or the person appointed by the director to serve as Insurance Commissioner under ORS 705.115.
(13) "Insurer" means the State Accident Insurance Fund Corporation or a person licensed under ORS chapter 731 for workers’ compensation that satisfies its participation obligation by subscribing to the organizing principles. By subscribing to the organizing principles, an insurer shares in the results of the reinsurance pooling mechanisms on a pro-rata basis of their net premiums written within the state. The insurer may be assessed or receive disbursements depending upon the reinsurance pooling mechanism’s operating results.
(14) "National Council on Compensation Insurance, Inc." and "NCCI" mean a rating organization that is licensed in Oregon to make and file rates, rating values, classifications and rating plans for workers' compensation insurance, and is an organization that authorized workers' compensation insurers may be members for the purpose of satisfying ORS 737.560.
(15) "Net premiums written" means the gross direct premiums charged less all premiums (except dividends and savings refunded under participating policies) returned to insureds for all workers' compensation and occupational disease insurance, exclusive of premiums for employers subject to the Plan, and for employers written under the National Defense Projects Rating Plan and under excess policies.
(16) “Organizing principles” means the agreement and principles of the reinsurance organization, approved by the Director, that govern the management of and participation in the Plan. A carrier participating in the Plan subscribes to the organizing principles. “Organizing principles” may include any of the following, as applicable:
(a) The National Pool reinsurance mechanism that is filed with and approved by the Insurance Commissioner and that is authorized under the Plan to provide reinsurance to the servicing carriers on employers assigned to them under the Plan.
(b) The Bylaws of the National Workers’ Compensation Reinsurance Association NFP (NWCRA or Association), whose member insurers participate in the Reinsurance Agreement(s) authorized under this Plan to provide reinsurance to the servicing carriers on employers assigned to them under this Plan. The Bylaws are the agreement subscribed to by insurers selecting Option 2 -- Subscription to organizing principles as their means of satisfying their participation in the Plan.
(c) The agreement or management rules of any reinsurance organization selected by the Director to implement Oregon’s assigned risk plan.
(17) "Plan" means the Oregon Workers' Compensation Insurance Plan.
(18) "Plan Administrator" means the organization designated in OAR 836-043-0017, and its agents.
(19) “Producer” means a person who is licensed as an insurance producer under ORS 744.052 to 744.089, whose privileges under this Plan have not been suspended or revoked, designated by the employer or applicant applying under this Plan to secure and maintain workers’ compensation and employers liability insurance on behalf of the employer. For purposes of this Plan, the producer is considered to be acting on behalf of the insured or employer applying for coverage under this Plan and not as a producer of the Plan Administrator or of any servicing carrier for Plan business.
(20) “Reasonable offer of voluntary coverage” means any offer for voluntary coverage where the total estimated annual premium is less than or equal to the assigned risk total estimated annual premium including any applicable assigned risk surcharges or pricing programs for all comparable coverage. Subject to the Plan Administrator’s discretion, “reasonable offer of coverage” does not include:
(a) An offer that does not provide all of the required coverage (e.g., carrier cannot provide federal coverage or limits of liability);
(b) An offer that includes a deductible or deposit that is a financial burden to the employer as determined by the producer or employer; or
(c) The carrier's financial rating status is below that required by the producer or employer.
(21) “Regulatory authority” means the commissioner, director or superintendent of a state’s insurance regulatory agency, or a properly appointed designee of the commissioner, director or superintendent.
(22) “Reinsurance Agreement” means a contractual arrangement among association members providing a quota share reinsurance facility for workers’ compensation insurance in a number of states and for which administrative services are provided by the National Council on Compensation Insurance, Inc. in its capacity as administrator as designated under the organizing principles.
(23) “Reinsurance Organization” means the entity selected by the Director to implement Oregon’s workers compensation assigned risk plan under ORS 656.730. “Reinsurance Organization” may include:
(a) The National Workers’ Compensation Reinsurance Association, a nonprofit corporation whose members provide for contractual quota share reinsurance through reinsurance agreements among themselves as workers’ compensation insurers, which affords the insurers an option for complying with state insurance plan requirements by sharing in the experience of certain policies written pursuant to such insurance plans;
(b) The National Workers’ Compensation Reinsurance Pool, a contractual reinsurance mechanism among participating workers’ compensation insurers, that affords insurers in certain states an option for complying with state insurance plan requirements by sharing in the experience arising out of certain policies written pursuant to such insurance plans; or
(c) Any other entity selected by the Director to implement the Oregon assigned risk plan.
(24) "Servicing carrier" means an insurer, including the State Accident Insurance Fund Corporation, approved by the Insurance Commissioner that has been assigned to provide coverage to an eligible employer who has applied for workers' compensation insurance pursuant to the Plan.
(25) “State” means any state of the United States and the District of Columbia.
(26) "Undisputed premium obligation" means a workers' compensation insurance premium obligation that is not the subject of a bona fide dispute pursuant to ORS 737.318 or 737.505 or by a judicial action, and for which there is no written payment plan in effect between an insurer and employer.
(27) "Workers' compensation insurance" means:
(a) Statutory workers' compensation and occupational disease liability insurance, including insurance for liability under the Longshore and Harbor Workers' Compensation Act, as amended, and the Federal Coal Mine Health and Safety Act of 1969, as amended;
(b) Employers liability insurance written in connection with a workers' compensation insurance policy; and
(c) Such additional coverage as determined by the Plan Administrator and approved by the Insurance Commissioner.
(28) "Workers' Compensation Rating System Review and Advisory Committee" means the committee established pursuant to OAR 836-043-0200 to hear employer grievances pursuant to ORS 737.505.
Note: The Bylaws and the National Pool reinsurance mechanism (Articles of Agreement) are attached to this rule as Exhibit 4.
[ED. NOTE: Exhibits referenced are available from the agency.]
Stat. Auth.: ORS 656.427, 656.730 & 731.244
Stats. Implemented: ORS 656.427, 656.730 & 737.265
Hist.: IC 1-1979(Temp), f. & ef. 10-12-79; IC 1-1980, f. & ef. 1-15-80; IC 1-1982, f. 1-15-82, ef. 7-1-82; ID 10-1989(Temp), f. & cert. ef. 11-3-89; ID 7-1990, f. 4-30-90, cert. ef. 5-1-90; ID 18-1990(Temp), f. & cert. ef. 8-6-90; ID 1-1991, f. & cert. ef. 2-19-91; ID 13-1992, f. & cert. ef. 8-12-92; ID 4-1994, f. & cert. ef. 4-19-94; ID 10-1996, f. 6-27-96, cert. ef. 7-1-96; ID 18-2008, f. 12-9-08, cert. ef. 1-1-09
836-043-0009
Participation by Insurers and Insurance Producers
(1) All insurers authorized to transact workers' compensation insurance in Oregon are required to participate in the Plan and subscribe to the organizing principles for Oregon.
(2) Failure of an insurer to comply with the Plan is grounds for revocation of the insurer's certificate of authority to transact workers' compensation insurance.
(3) Each insurance producer who is authorized to transact the class of property and casualty insurance is authorized to transact workers' compensation insurance offered by the Plan. The Director of the Department of Consumer and Business Services may terminate a producer's authority under this section for cause.
(4) An insurer may terminate participation in this Plan as of the close of the calendar year in which its authority to write workers’ compensation is terminated. With respect to all policies in force on the effective date of an insurer’s termination, the liability of the terminating insurer will cease on the succeeding anniversary date of each such policy. Termination of participation does not discharge or otherwise affect liabilities incurred prior to the anniversary date of such policies, and the insurer will be charged or credited in due course with the insurer’s proper share of all expenses, losses, and profits allocable thereof.
(5) All insurers participating in the Plan through the Reinsurance Agreements provided for in the organizing principles shall share in the writings, expenses, servicing allowance and losses. Each insurer’s participation in the Plan shall:
(a) Be in the proportion that the total net premiums of all members participating in the Plan in Oregon during the preceding calendar years bear to the aggregate direct premiums written in Oregon during the preceding calendar years by all insurers participating through the Reinsurance Agreements;
(b) Except as provided in OAR 836-043-0017(2)(k), exclude that portion of the premiums attributable to the operation of the Plan; and
(c) Be determined on the basis of the direct premiums as reported in the most recent annual reports filed with the regulatory authority.
Stat. Auth.: ORS 656.427, 656.730 & 731.244
Stats. Implemented: ORS 656.427, 656.730 & 737.265
Hist.: ID 4-1994, f. & cert. ef. 4-19-94; ID 10-1996, f. 6-27-96, cert. ef. 7-1-96, Renumbered from 836-043-0016; ID 8-2005, f. 5-18-05, cert. ef. 8-1-05; ID 18-2008, f. 12-9-08, cert. ef. 1-1-09
836-043-0017
Plan Administrator
(1) The Plan Administrator is a rating organization for workers' compensation insurance in Oregon that is designated as the plan administrator by the Director. The National Council on Compensation Inc. is designated as the Plan Administrator. The Plan Administrator shall continue to serve from the effective date of the Plan unless the Plan Administrator resigns. The Plan Administrator must give advance written notice of its resignation to the Director at least one year in advance of the effective date of resignation.
(2) The Plan Administrator has the following duties and responsibilities in addition to any others set forth in the Plan and the organizing principles:
(a) Determining the methodology and formula for making assignments to servicing carriers pursuant to OAR 836-043-0060 and securing the necessary information in order to make the assignments;
(b) Developing and implementing assigned risk operating rules and forms approved by the Director to the extent necessary to carry out the purposes of the Plan;
(c) Processing assigned risk applications pursuant to OAR 836-043-0041;
(d) Establishing written Assigned Carrier Performance Standards for servicing carriers, subject to approval by the Insurance Commissioner, including, but not limited to:
(A) Verification of ongoing Plan eligibility of the employer;
(B) Issuance of policies and endorsements;
(C) Filings with administrative agencies;
(D) Maintenance of premiums on policies, consistent with manual rules, rates, rating plans, and classifications;
(E) Completion and billing of final audits;
(F) Collection of premium;
(G) Claim services, including investigation, disability management and medical cost control;
(H) Loss control services and safety information to encourage employers to make safety a part of their business;
(I) Payment of producer fees;
(J) Issuance of renewal proposals and non-renewal notices;
(K) Assurance of insured and insurer compliance with all terms and conditions of the policy contract;
(L) Resolution of complaints and response to insured and insurance producer inquiries; and
(M) Reporting financial and statistical data;
(e) Monitoring servicing carrier performance and enforcing Assigned Carrier Performance Standards and incentives;
(f) Administering the dispute resolution mechanism as provided in OAR 836-043-0070;
(g) Developing and implementing assigned risk operating rules and forms to the extent necessary to carry out the purposes of the Plan;
(h) Informing the Insurance Commissioner of any insurer that is not participating in this Plan;
(i) Monitoring the performance and operation of the Plan and initiating amendments thereto as appropriate;
(j) Determining the expenses for operation of the Plan, including but not limited to the Plan Administrator’s fees or legal expenses associated with Plan matters, and assess each insurer participating in the Plan for those expenses on an equitable basis as determined by the Plan Administrator and approved by the Director; and
(k) Developing and administering a take-out credit program as provided in OAR 836-043-0076.
(3) The Plan Administrator shall also publish and make available to all affected insurers and producers, upon request and at no charge, both the necessary information for placement in the Plan and the listings of all employers that have been placed into the Plan. The listings shall include each employer's name, address, policy expiration date, latest experience modification, if applicable, the Simplified Assigned Risk Adjustment Program factor and the governing class code.
(4) The Plan Administrator shall monitor compliance by servicing carriers with occupational safety and health consultative service requirements of ORS 731.480. The Plan Administrator shall file with the Insurance Commissioner by May 1 of each year a report regarding such compliance for the preceding calendar year. The Plan Administrator shall also determine the expenses for operation of the Plan, not including the Plan Administrator's expenses incurred in connection with responsibilities it has under the Articles, and shall assess each insurer participating in the Plan for those expenses on an equitable basis as determined by the Plan Administrator.
Stat. Auth.: ORS 656.427, 656.730 & 731.244
Stats. Implemented: ORS 656.427, 656.730 & 737.265
Hist.: ID 4-1994, f. & cert. ef. 4-19-94; ID 10-1996, f. 6-27-96, cert. ef. 7-1-96, Renumbered from 836-043-0030; ID 8-2005, f. 5-18-05, cert. ef. 8-1-05; ID 18-2008, f. 12-9-08, cert. ef. 1-1-09
836-043-0021
Servicing Carriers
(1) The Plan Administrator shall establish written requirements that insurers must meet in order to be eligible to act as a servicing carrier. The Plan Administrator shall provide the written requirements to the board for review and acceptance. From among those insurers that are eligible and have applied to act as a servicing carrier, and subject to approval by the Insurance Commissioner, the Plan Administrator shall select a sufficient number of servicing carriers that are needed to handle the assignments made pursuant to the Plan. The Plan Administrator may confer with the board in regard to the number of servicing carriers needed to handle the assignments made pursuant to this Plan. Subject to approval by the Insurance Commissioner, the Plan Administrator may terminate the servicing carrier status of any insurer that fails to meet the servicing carrier requirements on a continuing basis.
(2) In order to be a servicing carrier, an insurer must meet all of the following eligibility criteria:
(a) Be licensed to write workers’ compensation and employers liability insurance in Oregon or be the State Accident Insurance Fund Corporation.
(b) Be writing or be an affiliated insurer of a carrier that is currently licensed and actively writing voluntary workers’ compensation and employers liability insurance premium in Oregon and that has been licensed and writing in Oregon for each of the five calendar years immediately preceding the first effective year of the proposed contract, or be licensed and actively writing workers’ compensation and employers liability insurance in Oregon for a minimum of the most recent three calendar years immediately preceding the first effective year of the proposed contract and active as a workers’ compensation servicing carrier in any other national workers’ compensation reinsurance organization in another state for a minimum of five calendar years immediately preceding the first effective year of the proposed contract.
(c) Be assigned and maintain at a minimum an “A-” rating as published by A.M. Best, except that such "A-" A.M. Best rating is not applicable to the State Accident Insurance Fund Corporation.
(d) Maintain the necessary staff and facilities to comply with the procedures, Assigned Carrier Performance Standards, financial reporting requirements, and Plan requirements.
(e) Comply with all applicable statutory and regulatory requirements, including but not limited to, statutes, regulations, codes, rules, acts, directives, bulletins, announcements and circulars.
(f) Be either precertified in writing by the Plan Administrator or have achieved and maintained and not be subject to a revocation of precertification or certification status as determined by the Plan Administrator under the applicable precertification or certification program established by the Plan Administrator.
(g) Comply with all mandatory electronic processing and reporting requirements of the Plan Administrator that are currently in effect.
(h) Comply with all federal and state laws and regulations, which relate to the policies applicable to the servicing carrier.
(3) Each servicing carrier shall provide a report to the Plan Administrator in such a format and for such a period as determined by the Plan Administrator, but not less than semiannually. This report, among other things, shall provide information on the servicing carrier's operations related to Plan business in the following areas: underwriting, auditing, claims, loss control, premium collection and customer service. A summary of such reports shall be provided to the Insurance Commissioner.
(4) The Plan Administrator shall establish written procedures for measuring servicing carrier performance. In recognition of the interests of the participating companies who have subscribed to the organizing principles, the Plan Administrator shall provide a copy of such written Assigned Carrier Performance Standards to the board for review and acceptance. Servicing carriers shall manage losses in compliance with the performance standards established hereunder. The Plan Administrator, with the approval of the Insurance Commissioner, shall also establish the compensation for servicing carriers, which shall take into consideration, among other things, provisions for:
(a) Rewarding servicing carriers for positive action targeted at reducing losses and costs;
(b) Disincentives for inefficiencies and service below the minimum Assigned Carrier Performance Standards; and
(c) Servicing carrier capacity.
(5) The Plan Administrator shall monitor and review servicing carrier performance by:
(a) Reviewing the operations reports;
(b) Requiring and reviewing self-audits;
(c) Conducting on-site audits; and
(d) Reviewing any other information available that relates to the servicing carrier.
(6) The Plan Administrator shall require servicing carriers to maintain desired performance levels and shall take appropriate remedial action where necessary including, but not limited to, establishment and administration of a progressive discipline program which may lead to terminating an insurer's servicing carrier status.
(7) Termination of an insurer's servicing carrier status is subject to Insurance Commissioner approval.
(8) Any formal action taken by the Plan Administrator under this rule shall be the exclusive remedy and in lieu of any other penalty or sanction that may apply under the Plan.
(9) Any action taken by the Plan Administrator under this provision is subject to review under OAR 836-043-0070.
(10) In order to fulfill its responsibilities under this Plan, the Plan Administrator shall have the right, itself or through authorized representatives, at all reasonable times during regular business hours, to audit and inspect the books and records of any servicing carrier with respect to any policies, claims, or related documents coming within the purview of the Plan, the organizing principles or the Reinsurance Agreement. Upon request, the Plan Administrator shall make available to the Insurance Commissioner and the board a formal written report on the Plan Administrator’s monitoring and enforcement activities related to servicing carriers.
Stat.Auth.: ORS 656.427, 656.730 & 731.244
Stats. Implemented: ORS 656.427, 656.730 & 737.265
Hist.: ID 4-1994, f. & cert. ef. 4-19-94; ID 10-1996, f. 6-27-96, cert. ef. 7-1-96, Renumbered from 836-043-0040; ID 18-2008, f. 12-9-08, cert. ef. 1-1-09
836-043-0024
Right to Apply
(1) An employer who is eligible for workers’ compensation insurance as set forth in this rule may apply to the Plan Administrator for workers' compensation insurance under the Plan as provided in this rule if the employer is unable to obtain a reasonable offer of voluntary coverage. The employer must apply on the forms and according to the directions prescribed in Exhibits 1, 2, and 3 to this rule.
(2) For purposes of section (1) of this rule, the offer of a rating plan approved by the Insurance Commissioner is considered an offer of voluntary coverage or insurance. Any dispute arising from the application or interpretation of this rule is subject to the dispute resolution procedure provided in OAR 836-043-0070. As used in this section, “reasonable rating plan” means any rating program approved for use in a state by the regulatory authority.
(3) An employer seeking coverage under the Plan or a representative of the employer must:
(a) Within 60 days before applying for coverage under the Plan, apply for workers’ compensation insurance and receive a declination from at least one insurer licensed to write and actively writing workers’ compensation insurance in Oregon. The declination must be from the insurer providing workers’ compensation insurance to the employer at the time of application, if any. Proof of cancellation or nonrenewal from the insurer shall be considered to be the required declination.
(b) Maintain a record of all insurer declinations for the policy period in force. The employer must provide this information to the Plan Administrator or servicing carrier upon request. The information must include:
(A) Insurer name;
(B) Person contacted at insurer;
(C) Mailing address and phone number of insurer contact; and
(D) Date of declination.
(4) For purposes of section (1) of this rule, an employer is presumed to be eligible in the absence of clear and convincing evidence to the contrary. An employer is not eligible if any of the following circumstances exists at the time of application or thereafter:
(a) A self-insured employer knows and is aware of pending bankruptcy proceedings, insolvency, cessation of operations or conditions that will probably result in occupational disease or cumulative injury claims from exposures incurred while the employer was self-insured.
(b) The employer, while insurance issued under the Plan is in force:
(A) Knowingly refuses to meet reasonable health, safety or loss control requirements;
(B) Does not allow any insurer or the servicing carrier reasonable access to its records for audit or inspection under the policy; or
(C) Does not comply with any other policy obligation.
(c) The employer has an outstanding workers' compensation insurance premium obligation or other monetary policy obligation including but not limited to an obligation under a deductible program, on previous workers' compensation insurance that is not subject to a bona fide dispute.
(d) The employer, a representative of the employer, or the producer knowingly fails to comply with Plan procedures, or knowingly makes a material misrepresentation on the application by express statement, omission or otherwise, including but not limited to:
(A) Estimated payroll;
(B) Offers of workers' compensation insurance;
(C) Nature of business;
(D) Name of business;
(E) Management or ownership of business;
(F) Previous insurance history;
(G) Avoidance of an experience rating modification;
(H) An outstanding workers' compensation insurance premium obligation or other monetary policy obligation of the employer;
(I) Noncompliance with any applicable state licensing or registration requirement;
(J) Fails to accept any reasonable offer of voluntary coverage; or
(K) Other evidence exists that shows the employer is not entitled to insurance
(5) An eligible employer may submit a completed application for assigned risk coverage through the Plan by any method approved by the Plan Administrator, including:
(a) Online -- Through ncci.com ;
(b) Mail -- The U.S. Postal Service or private overnight delivery service; or
(c) Telephone -- By contacting the Plan Administrator.
(6) The Plan Administrator shall conditionally bind coverage of a worker leasing company applicant for an initial worker leasing company license under OAR 436-050-0440 pending issuance of the license by the Director.
(7) An eligible employer or the representative of the employer must submit the total initial or deposit premium by a method approved by the Plan Administrator including:
(a) Electronic fund transfer;
(b) Credit card; or
(c) Check.
[ED. NOTE: Exhibits referenced are available from the agency.]
Stat. Auth.: ORS 656.427, 656.730 & 731.244
Stats. Implemented: ORS 656.427, 656.730 & 737.265
Hist.: ID 10-1996, f. 6-27-96, cert. ef. 7-1-96; ID 1-2003, f. & cert. ef. 1-17-03; ID 18-2008, f. 12-9-08, cert. ef. 1-1-09
836-043-0028
Application by Electronic Transmission or Telephone
(1) An application made by electronic transmission or telephone must be completed in full and must be signed. The signature may be submitted by facsimile transmission. The effective date of coverage shall be determined in accordance with OAR 836-043-0044.
(2) An employer or the representative of an employer may apply for assigned risk coverage electronically by accessing NCCI’s online application service. Upon receipt of an application submitted electronically, the Plan Administrator shall review the information to determine whether the employer is eligible. If the employer is eligible and the application is complete and accurate, the Plan Administrator shall calculate electronically the initial or deposit premium amount and request the employer to submit the amount to continue the application process. The amount of the initial or deposit premium shall be determined in accordance with rules set forth in Exhibit 3 to OAR 836-043-0024.
(3) The employer or its agent must submit the total required initial premium to the Plan Administrator by credit card or electronic funds transfer. A portion of the deposit premium may be satisfied with an authorized surety's financial guaranty bond as provided in OAR 836-043-0034.
(4)(a) The employer or the representative of the employer may contact the Plan Administrator by telephone to apply for assigned risk coverage. If the information provided by telephone is complete, accurate, and the employer is deemed eligible for coverage, the Plan Administrator shall:
(A) Advise the employer of the total estimated annual premium and required initial or deposit premium required to bind coverage; and
(B) Fax the employer a copy of the completed applications as set forth in Exhibits 1 and 2 of OAR 836-043-0024 for review and signature.
(b) For a application made by telephone, the employer or the representative of the employer shall submit the total required initial or deposit premium by electronic funds transfer in accordance with rules set forth in Exhibit 3 to OAR 836-0043-0028.
[ED. NOTE: Exhibits referenced are available from the agency.]
Stat. Auth.: ORS 656.427, 656.730 & 731.244
Stats. Implemented: ORS 656.427, 656.730 & 737.265
Hist.: ID 10-1996, f. 6-27-96, cert. ef. 7-1-96; ID 18-2008, f. 12-9-08, cert. ef. 1-1-09
836-043-0032
Nonelectronic Application
(1) An employer or the representative of an employer may submit a signed and completed application as set forth in Exhibits 1 and 2 of OAR 836-043-0024 by United States mail or a private overnight mail delivery service. The application must be sent to the Plan Administrator and must include the initial or deposit premium as calculated by the employer or its agent. The application may include a requested date for the coverage to become effective. A portion of the deposit premium may be satisfied with an authorized surety's financial guaranty bond as provided in OAR 836-043-0034.
(2) The employer or its agent shall refer to Exhibit 3 to OAR 836-043-0024 of the application for the applicable deposit or initial premium rules.
[ED. NOTE: Exhibits referenced are available from the agency.]
Stat. Auth.: ORS 656.427, 656.730 & 731.244
Stats. Implemented: ORS 656.427, 656.730 & 737.265
Hist.: ID 10-1996, f. 6-27-96, cert. ef. 7-1-96; ID 18-2008, f. 12-9-08, cert. ef. 1-1-09
836-043-0034
Surety Bonds
For all submission options under OAR 836-043-0028 or 836-043-0032, the employer submitting an application may satisfy a portion of the deposit premium with an authorized surety’s financial guaranty bond, but the cash portion of the deposit premium must be no less than either the minimum premium or 25 percent of the total estimated annual premium, whichever is greater. The employer may select any minimum deposit percentage listed in the NCCI Plan Oregon State Instructions page (Exhibit 3 to OAR 836-042-0024) and post a bond for the premium difference between that percentage and the minimum deposit percentage otherwise applicable.
Stat. Auth.: ORS 656.427, 656.730 & 731.244
Stats. Implemented: ORS 656.427, 656.730 & 737.265
Hist.: ID 18-2008, f. 12-9-08, cert. ef. 1-1-09
836-043-0041
Application Review
(1) Upon receiving an application submitted under OAR 836-043-0028 or 836-043-0032, the Plan Administrator shall review the application for completeness and determine whether the employer is eligible for coverage under the Plan.
(2) The Plan Administrator may request additional information to establish eligibility, to assign appropriate classification codes, to calculate applicable premiums and to otherwise appropriately process the application. The additional information may include:
(a) Tax documentation;
(b) Ownership information, including a request to complete and sign a change of ownership form;
(c) Contracts, including worker leasing company arrangements, temporary employment agency contract or franchise agreements;
(d) Supplemental worker leasing company applications;
(e) Additional information regarding short-term policies requests, such as verification of annualized payroll;
(f) Proof of declination of voluntary coverage;
(g) Prior policy information including claims and audits, corporate charters, Dun & Bradstreet, Inc. reports, signed financial statements and signed letters of explanation; and
(h) Any other information that the Plan Administrator considers necessary to process the application.
(3) The employer or its agent shall provide information and documentation requested by the Plan Administrator or provide an acceptable explanation for failure to provide the requested items not later than the second business day after the request or upon the mutually agreed-upon date.
(4) The Plan Administrator may return an incomplete application to the employer or its agent for completion or, with notice to the employer or its agent, the Plan Administrator may retain the application pending receipt of further information. The Plan Administrator may reject an application and the previously established effective date if the employer fails to comply in a timely manner with a request from the Plan Administrator.
(5) An employer or a representative of an employer may resubmit a complete application to the Plan Administrator for an application review and establishment of a new effective date in accordance with 836-043-0044.
Stat. Auth.: ORS 656.427, 656.730 & 731.244
Stats. Implemented: ORS 656.427, 656.730 & 737.265
Hist.: ID 10-1996, f. 6-27-96, cert. ef. 7-1-96; ID 18-2008, f. 12-9-08, cert. ef. 1-1-09
836-043-0044
Binding Coverage
(1) The Plan Administrator may issue binders to eligible employers in accordance with the provisions of this Plan. The servicing carrier shall provide coverage under any binder issued by the Plan Administrator, subject to the provisions of the Plan, any applicable policy terms or conditions, and any applicable laws, rules, or regulations. The Plan Administrator shall send copies of the binder to the employer’s representative, if any, the servicing carrier to which the Plan Administrator assigned the employer and the Director of the Department of Consumer and Business Services.
(2) The Plan Administrator shall issue a binder for an employer when the Plan Administrator determines all of the following occur:
(a) The employer is eligible for coverage;
(b) The Plan Administrator has received an application that is complete and signed by an officer, owner or other designee with power of attorney and includes any additional information within the established time frame; and
(c) The Plan Administrator has received the total initial premium or deposit premium within the established time frame.
(3) After the Plan Administrator binds coverage, the Plan Administrator shall provide the servicing carrier with the following:
(a) A copy of the binder;
(b) The initial or deposit premium;
(c) The application forms as set forth in Exhibits 1 and 2 to OAR 836-043-0024;
(d) Copies of any provided election or rejection forms;
(e) Other forms submitted during the application review process; and
(f) Any information to assist the servicing carrier in providing the proper coverage and correct rates including but not limited to experience rating modification worksheet data, NCCI’s Inspection and Classification Report, and change of ownership information form if applicable.
(4) Upon receipt of the assignment package, the servicing carrier shall review the documents to ensure that all documentation needed to properly issue the policy is attached. Based on the separate review of the servicing carrier , the servicing carrier may request additional information or premium from the employer. The servicing carrier must receive all additional requested information or premium before the servicing carrier issues a policy.
(5) The servicing carrier shall issue the policy in accordance with Plan rules, state law and the Assigned Carrier Performance Standards.
(6) The binder or verification page remains in effect until cancelled or until the servicing carrier issues a policy in accordance with the Assigned Carrier Performance Standards or state law. If the Plan Administrator does not issue a binder, coverage does not exist.
(7) (a) The employer or the representative of the employer may request an effective date no later than sixty days after the date of application. However, such requested effective date must be the later of the following:
(A) The established effective date as outlined in the tables set forth in subsection (8) of this rule;
(B) The date of expiration of existing coverage; or
(C) A date the employer requested.
(b) To secure a requested effective date, the employer or the representative of the employer shall:
(A) Submit to the Plan Administrator a signed and completed application as described in Exhibits 1 and 2 to OAR 836-043-0024 using one of the submission methods described in OAR 836-043-0024(5).
(B) For an application submitted by U.S. Postal Service or private overnight delivery service, at a minimum, include in the application submission the required critical threshold elements as defined in NCCI’s Assigned Risk Supplement to the Basic Manual.
(C) If submitting an application via mail or an overnight delivery service, include the appropriate initial or deposit premium. The Plan Administrator will consider the receipt of the application at the specified mailing address receipt.
(8) The earliest effective date for coverage is dependent on the method used to submit the application and shall be determined in accordance with the following tables: [Table not included. See ED. NOTE.]
(9) If the Plan Administrator fails to issue a binder to an eligible employer by the 14th day after receiving a completed application and the total initial or deposit premium, coverage is bound at 12:01 a.m. on the later of the dates specified in section (8) of this rule.
(10) A binder issued to a worker leasing company applicant in compliance with requirements for an initial worker leasing company license under OAR 436-050-0440 is extended as provided in this section until the Director of the Department of Consumer and Business Services either licenses or refuses to license the applicant, as follows:
(a) The binder is conditional upon the subsequent initial worker leasing company licensing by the Director. The binder does not obligate the Plan to provide coverage to the worker leasing company for its clients until the worker leasing company is licensed by the Director of the Department of Consumer and Business Services.
(b) Upon the conditional binding of the applicant worker leasing company, the Plan Administrator shall send the binder to those entities listed in section (1) of this rule, except for the servicing carrier.
(c) Upon the initial licensing of a worker leasing company applicant by the Director of the Department of Consumer and Business Services, and receipt of proof of licensing, the Plan Administrator shall assign an unconditional binder to a servicing carrier and send an unconditional binder to all entities listed in section (1) of this rule.
(d) Upon the refusal to license a worker leasing company applicant by the Director of the Department of Consumer and Business Services, and upon receipt of proof of refusal, the Plan Administrator shall send notice to all entities listed in section (1) of this rule that the conditional binder has been rescinded and the applicant was not covered.
[ED. NOTE: Tables referenced are available from the agency.]
Stat. Auth.: ORS 656.427, 656.730 & 731.244
Stats. Implemented: ORS 656.427, 656.730 & 737.265
Hist.: ID 10-1996, f. 6-27-96, cert. ef. 7-1-96; ID 1-2003, f. & cert. ef. 1-17-03; ID 18-2008, f. 12-9-08, cert. ef. 1-1-09
836-043-0046
Rates and Forms, Policy Term, Additional Coverages and Other Provisions
(1) An insurer issuing a policy to an employer to which the Plan applies shall write the policy according to the classifications, forms including but not limited to policy endorsements, change of ownership forms, supplemental leasing forms, and rates and rating plans including retrospective rating plans authorized for use in the assigned risk market by the Plan Administrator and approved by the Insurance Commissioner as required in ORS 737.265(2).
(2) The policy information page and all endorsements must be properly identified as a Plan or AR (Assigned Risk) policy, and policy information submitted on hard copy must show the Plan or AR indicator with the policy number on the Information Page. The Policy Information Page and all endorsements must be submitted to the Plan Administrator or its designee within the time frame and in the format established by the Plan Administrator.
(3) The servicing carrier shall issue a policy and proof of coverage as required by ORS 656.419, for a term of at least one year, unless insurance for a shorter term has been requested. A short-term policy may be obtained only once within a 12-month period unless otherwise agreed by the servicing carrier.
(4) The servicing carrier may make additional coverages described in the Supplement to the Plan available to an employer.
Stat. Auth.: ORS 656.427, 656.730 & 731.244
Stats. Implemented: ORS 656.419, 656.427, 656.730 & 737.265
Hist.: ID 10-1996, f. 6-27-96, cert. ef. 7-1-96; ID 18-2008, f. 12-9-08, cert. ef. 1-1-09; ID 6-2009, f. & cert. ef. 8-14-09
836-043-0048
Additional States' Coverage
Except as shown on the binder or verification page, all assignments under the plan are to be made on an intrastate basis. An employer seeking insurance for operations in one or more states other than the state listed in the Policy Information Page may request its servicing carrier to furnish insurance in the additional states in accordance with OAR 836-043-0050 and the Interstate Assignments section of the Plan. A Plan policy that affords coverage on operations in more than one state shall clearly indicate the premium developed for each state separately.
Stat. Auth.: ORS 656.427, 656.730 & 731.244
Stats. Implemented: ORS 656.427, 656.730 & 737.265
Hist.: ID 10-1996, f. 6-27-96, cert. ef. 7-1-96; ID 18-2008, f. 12-9-08, cert. ef. 1-1-09
836-043-0050
Interstate Assignments
(1) Any employer assigned under this Plan and desiring workers' compensation insurance for operations for physical locations in states other than that covered by the Plan may request its servicing carrier to furnish such insurance in such additional states. If the servicing carrier is licensed in those additional states and will write workers’ compensation insurance on a voluntary basis, the servicing carrier must do so on a voluntary basis and in accordance with the law, rates, rules, classifications, and regulations applicable to the voluntary workers' compensation market in those states.
(2) If the servicing carrier does not wish to provide the insurance on a voluntary basis, the servicing carrier may provide assigned risk coverage in such additional states subject to the following:
(a) Workers' compensation insurance may be provided only in accordance with OAR 836-043-0001 to 836-043-0091 in those states that have a Workers' Compensation Insurance Plan that is similar to this Plan and that allows employers applying for coverage under those Plans to obtain coverage for operations in Oregon;
(b) A servicing carrier providing such insurance shall collect all premiums due based on the exposure for the physical operations in those other states. The effective date of such insurance in such additional states shall be the day after premium is received; however, in the event coverage in such additional states is on an "if any" basis, the effective date of such coverage shall be the day following receipt of an acceptable request for such insurance by the servicing carrier. A copy of the policy Information Page and all endorsements, properly identified as a Plan or AR (Assigned Risk) policy, shall be submitted to the appropriate Plan Administrator having jurisdiction in the state where the coverage is effected;
(c) The rates, rating plans, classifications, and policy forms used to provide coverage in such additional states shall be those that are:
(A) Applicable to the assigned risk market;
(B) On file and have been approved by the regulators in those additional states; and
(C) Authorized for use in the assigned risk market by the Plan Administrator;
(d) The servicing carrier must be a signatory to an agreement providing reinsurance for workers’ compensation insurance policies issued to assigned risk market employers under the organizing principles in each state where the coverage shall be provided; and
(e) A servicing carrier unwilling or unable to provide insurance for an employer in additional states shall refer the employer to the Plan Administrator or appropriate administrative organization for the states where coverage is needed for instructions and applications.
(3)(a) An employer who applies for workers' compensation insurance under another state's workers' compensation insurance plan may purchase coverage for operations in Oregon without meeting the application requirements of this Plan, provided:
(A) The employer qualifies for such insurance under the other state's Plan;
(B) The employer is in good faith entitled to insurance under this Plan;
(C) The other state's Plan is similar to this Plan;
(D) That Plan also provides for interstate assignments; and
(E) The payroll for the employer's operation in Oregon is not greater than the payroll in the other state;
(b) The rates, rating plans, classifications and policy forms used to provide coverage in Oregon shall be those that are applicable to assigned risk market risks in Oregon and are on file and have been approved by the Insurance Commissioner and authorized for use in the assigned risk market by the Plan Administrator;
(c) The administrator of the other Plan is authorized to assign employers with operations in Oregon to the other Plan's servicing carriers, subject to the following conditions:
(A) The servicing carrier must be a signatory to the organizing principles in Oregon. In addition, if the payroll for the employer's operation in Oregon is greater than $250,000, the servicing carrier must also be a servicing carrier in Oregon. If there is no eligible servicing carrier in Oregon that is also an insurer in the state of assignment, then the Plan Administrator may remove the payroll limitation or may require the employer to submit a separate application for coverage in Oregon; and
(B) The other state's Plan must give the Plan Administrator in Oregon similar authority to make interstate assignments.
(d) With regard to interstate assignments and policies, this Plan shall have jurisdiction over all disputes resulting from the application of rules, programs, and procedures that are specific to Oregon. Disputes regarding application requirements shall be under the jurisdiction of the state's Plan where the application was filed.
(4) This section is not applicable for unknown or unanticipated operations or exposures for which coverage may be available under the Residual Market Limited Other States Coverage Endorsement.
Stat. Auth.: ORS 656.427, 656.730 & 731.244
Stats. Implemented: ORS 656.427, 656.730 & 737.265
Hist.: ID 4-1994, f. & cert. ef. 4-19-94; ID 10-1996, f. 6-27-96, cert. ef. 7-1-96; ID 18-2008, f. 12-9-08, cert. ef. 1-1-09
836-043-0053
Premium Obligations
(1)(a) The Plan Administrator shall not knowingly make an assignment unless the employer has met all undisputed workers' compensation premium obligations on any previous workers’ compensation insurance including but not limited to obligations to:
(A) Any servicing carrie;
(B) A direct assignment carrier; or
(C) A voluntary insurer.
(b) After policy issuance, if an employer does not meet all undisputed workers' compensation insurance premium obligations under the current policy or previous assigned risk or voluntary policies, the employer's present servicing carrier retains the right to cancel a policy currently in force under the plan in accordance with ORS 656.427.
(2) When an employer with a prior undisputed workers' compensation premium obligation is a client of a worker leasing company as established in ORS 656.850 that is insured by the Plan, the servicing carrier may instruct the worker leasing company to issue a client cancellation notice to the Director of the Department of Consumer and Business Services with a copy to the client and a copy to the servicing carrier. Such a cancellation is effective on the 30th day after receipt of notice by the Director of the Department of Consumer and Business Services unless the client pays the prior premium debt or obtains coverage in the voluntary insurance market before the 30th day. When a worker leasing company fails to issue the requested client cancellation notice within 20 days of the request, the servicing carrier may cancel the worker leasing company policy.
Stat. Auth.: ORS 656.427, 656.730 & 731.244
Stats. Implemented: ORS 656.427, 656.730 & 737.265
Hist.: ID 10-1996, f. 6-27-96, cert. ef. 7-1-96; ID 18-2008, f. 12-9-08, cert. ef. 1-1-09
836-043-0056
Insurer Cancellation and Nonrenewal of Workers’ Compensation Insurance Policies or Surety Bonds
The following provisions of this rule govern when an insurer cancels or fails to renew a workers’ compensation insurance policy or surety bond:
(1) An insurer canceling coverage under ORS 656.427 for an employer who has an undisputed premium obligation not more than 30 days past due shall take the following actions:
(a) At the time the insurer gives notice of the cancellation, the insurer shall notify the employer of the right to placement in the Plan if eligible under OAR 836-043-0043;
(b) Provide the employer, not later than the tenth day after the employer's contact for Plan coverage, an accurately filled-in "Request for Coverage" form, using the form prescribed in Exhibits 1 and 2 to OAR 836-043-0024; and
(c) The insurer shall date stamp the request for coverage identifying the insurer's name and forward the form to the Plan administrator with payment, not later than the fifth day after receiving the signed request form from the employer.
(2) An employer or its agent desiring Plan coverage, whose coverage is being cancelled or nonrenewed under ORS 656.427 and who does not have an undisputed premium obligation more than 30 days past due, shall:
(a) Give notice to the canceling or nonrenewing insurer, prior to the termination of coverage, that the employer intends to become an insured employer under the Plan; and
(b) Verify coverage elections and other information provided in the Request for Coverage form (Exhibits 1 and 2 to OAR 836-043-0024), and sign the request form and return the form with the deposit premium check to the canceling or nonrenewing insurer before the end of coverage or not later than the tenth day after the insurer issues the Request for Coverage form, if later.
(3) The Plan Administrator shall process the Request for Coverage form received with a deposit premium prior to the coverage ending date in the manner provided for a Plan application, except that the Plan Administrator shall bind coverage under the Plan for Request for Coverage upon the date of receipt of the form (Exhibits 1 and 2 to OAR 836-043-0024) by the canceling or nonrenewing insurer in accordance with this rule or the ending date of previous coverage, if later.
[ED. NOTE: Exhibits referenced are available from the agency.]
Stat. Auth.: ORS 656.427, 656.730 & 731.244
Stats. Implemented: ORS 656.419, 656.427, 656.730 & 737.265
Hist.: ID 10-1996, f. 6-27-96, cert. ef. 7-1-96; ID 6-2009, f. & cert. ef. 8-14-09
836-043-0060
Assignment Formula
(1) This rule describes the mechanism used to provide for the random and equitable distribution of employers under the Plan to servicing carriers. The Plan Administrator may override the random assignment process to ensure the availability of requested Plan coverages to the employer.
(2)(a) A servicing carrier is responsible for providing services on behalf of those insurers that have elected to meet their Plan participation requirements by subscribing to the organizing principles. The Plan Administrator shall determine the allocable percentage of the servicing carrier through an objective selection process. However, the combined allocable percentages for all servicing carriers must be equal to the combined net voluntary premiums written for all signatories to the organizing principles as compared to the total net premiums of all insurers participating in the Plan in Oregon. An approved servicing carrier may receive assignments for any risk eligible for coverage under the Plan.
(b) When assigning an employer to an insurer, the Plan Administrator shall consider the employer’s prior Plan coverage, special requirements, including but not limited to additional states or federal coverage, and premium size.
(c) Any carrier authorized by the U.S. Department of Labor to provide coverage under the U.S. Longshore and Harbor Workers’ Compensation Act (USL&HW) and extension acts is eligible to receive assignments requesting the same coverage in the assigned risk market. A carrier with USL&HW authorization is also eligible for assignments requesting Maritime, Program I or II. The Plan Administrator shall determine request for assignments under the USL&HW Act, Maritime, or extension acts coverage in accordance with the assignment methodology established by the Plan Administrator.
(d) A servicing carrier that has previously reported voluntary or assigned risk premium writing in any state, that is subject to the Federal Coal Mine Health and Safety Act or that has previously accepted assignments in any state for operations that are subject to the Federal Coal Mine Health and Safety Act, will receive assignments requesting such coverage in accordance with the assignment methodology established by the Plan Administrator.
(3) If an employer has prior assigned risk coverage, the Plan Administrator shall reassign the employer to the original servicing carrier as long as the carrier can provide the coverage requested by the employer. Circumstances may require the suspension of this criterion, such as when the suspension is warranted, in order to ensure that all servicing carriers achieve their allocable percentage of Plan business. The Plan Administrator shall provide a report of such suspensions to the regulatory authority upon request.
(4) The Plan Administrator shall identify those servicing carriers eligible to receive an assignment based on the following requirements of the employer and the capabilities of carriers:
(a) The Plan Administrator shall select a servicing carrier that is able to provide coverage in the additional states requested by the employer in accordance with Interstate Assignments section of the Plan.
(b) The Plan Administrator shall select a servicing carrier that is able to provide authorized additional coverage requested by the employer. The following coverages require assignment to a servicing carrier with special capabilities as indicated:
(A) For coverage under the USL&HW Act and its extension acts, including the Outer Continental Shelf Lands Act, Defense Base Act, and Nonappropriated Fund Instrumentalities Act, the Plan Administrator shall select a carrier authorized by the U.S. Department of Labor to provide these coverages.
(B) For Maritime coverage, the Plan Administrator shall select a carrier authorized by the Department of Labor to provide United States Longshore and Harbor Workers’ Compensation Act coverage.
(C) For coal mine risks, the Plan Administrator shall select a carrier experienced in servicing coal mine risks, either through writing coal mine policies in the voluntary market or through prior servicing of assigned risk market coal mine risks.
(c) Under special circumstances, the Plan Administrator may establish a minimum or maximum number of assignments or premium in order to ensure equitable assignments. These numbers may vary and are based on the amount of business remaining to be assigned and the number of weeks remaining in the calendar year.
(d) A servicing carrier that meets or exceeds its maximum weekly number of risks is not considered eligible. Each employer is assigned to an eligible servicing carrier according to the following algorithm, considering all servicing carriers in the aggregate:
(A) Each servicing carrier’s quota premium is calculated by multiplying total premium in the Plan at the time of the assignment by the carrier’s quota percent. A servicing carrier’s quota percent may be adjusted to allow for a more even distribution of assignments over a period of time.
(B) Each servicing carrier’s remaining business to be assigned is calculated by subtracting its premium in force at the time of the assignment from its adjusted quota premium. In order to allow the flexibility of slightly larger assignments in the carrier assignment process, an adjustment is made to each carrier’s quota premium. This adjustment consists of applying an “over-quota limit” of five percent or $5,000, whichever is greater, up to a maximum of $200,000. The Plan Administrator may lower this limit if circumstances warrant, such as when required to ensure that all servicing carriers achieve their allocable percentage of Plan business.
(C) Based on the difference between the percentage of a servicing carrier’s premium in force and its quota premium, a range of numbers proportional in size to the percentage difference is assigned to each carrier. A random number is generated, and the assignment is made to the servicing carrier whose range encompasses the random number. Issuance and Continuation of Policy A policy must be issued, renewed or reinstated without a lapse in coverage when premium is received by the carrier or postmarked by the United States Postal Service prior to the policy effective date or cancellation date.
Stat. Auth.: ORS 656.427, 656.730 & 731.244
Stats. Implemented: ORS 656.427, 656.730 & 737.265
Hist.: ID 10-1996, f. 6-27-96, cert. ef. 7-1-96; ID 18-2008, f. 12-9-08, cert. ef. 1-1-09
836-043-0062
Issuance and Continuation of Policy
(1) A policy must be issued, renewed or reinstated without a lapse in coverage when premium, including an interim premium audit or installment payment, is received by the carrier or postmarked by the United States Postal Service prior to the policy effective date or cancellation date.
(2) The following table establishes reinstatement provisions for a policy that is cancelled or renewed: [Table not included. See ED. NOTE.]
(3) A servicing carrier may impose additional requirements if necessary to effect the reinstatement of a policy. Effective or reinstatement dates for a lapse in coverage shall be determined in the same manner provided in OAR 836-043-0044.
[ED. NOTE: Tables referenced are available from the agency.]
Stat. Auth.: ORS 656.427, 656.730 & 731.244
Stats. Implemented: ORS 656.427, 656.730 & 737.265
Hist.: ID 10-1996, f. 6-27-96, cert. ef. 7-1-96; ID 18-2008, f. 12-9-08, cert. ef. 1-1-09
836-043-0064
Renewal, Nonrenewal
(1) A servicing carrier shall send a renewal or nonrenewal notice of impending expiration of coverage to the insured, the representative of the insured and the Plan Administrator at least 45 days before the expiration date of insurance. Upon receipt of the required premium, the servicing carrier shall issue the policy in accordance with Oregon statutes and rules and furnish a copy of such policy and all endorsements, properly identified as a Plan or AR (Assigned Risk) policy, to the Plan Administrator or its designee within the time and in the format established by the Plan Administrator.
(2) The servicing carrier shall apply the deposit premium paid by an employer in the Plan against the deposit required for a renewal policy, if any. If the servicing carrier assigned the renewal policy is different from the previous servicing carrier, then the previous servicing carrier shall promptly bill the employer for the final billing period, including any audit adjustments. If the final billing is not paid on or before the 30th day after the billing, the renewal servicing carrier may immediately issue a cancellation notice.
(3) A servicing carrier may refuse to renew a policy if the servicing carrier is unable to supply a required type of coverage, including but not limited to longshore, coal mine, maritime or additional state exposures.
Stat. Auth.: ORS 656.427, 656.730 & 731.244
Stats. Implemented: ORS 656.427, 656.730 & 737.265
Hist.: ID 10-1996, f. 6-27-96, cert. ef. 7-1-96; ID 18-2008, f. 12-9-08, cert. ef. 1-1-09
836-043-0066
Reassignment
(1) An employer may submit to the Plan Administrator a written request for reassignment to a different carrier, if available. The employer must submit the request in writing to the Plan Administrator not later than the 30th day and not earlier than the 60th day prior to the expiration of the current policy unless the Plan Administrator approves another request period or at the request of the regulatory authority. The employer must provide the Plan Administrator with an acceptable reason for the request with appropriate documentation. Acceptable reasons for an employer to request reassignment include:
(a) Documented poor servicing carrier service such as failure to provide timely issuance of statements, policies, and endorsements, or services not provided under the policy;
(b) Documented refusal of or inability of a servicing carrier to supply a required type of coverage including but not limited to longshore, coal mine, maritime or additional state exposures;
(c) Documented failure of a servicing carrier to return premium due to the insured, where there is no valid bona fide premium dispute;
(d) Based on the servicing carrier’s A.M. Best Rating or financial size category, if appropriate documentation is provided to and approved by the Plan Administrator; or
(e) Any other substantial documented reason subject to approval of the Plan Administrator
(2) The request for reassignment is subject to approval by the Plan Administrator. If the Plan Administrator approves the reassignment request, the employer shall submit a new application as provided in OAR 836-043-0028 or 836-043-0032 along with the appropriate initial or deposit premium to the Plan Administrator and must be otherwise eligible for continued coverage through the Plan. The reassignment shall be made on a random basis.
Stat. Auth.: ORS 656.427, 656.730 & 731.244
Stats. Implemented: ORS 656.427, 656.730 & 737.265
Hist.: ID 10-1996, f. 6-27-96, cert. ef. 7-1-96; ID 18-2008, f. 12-9-08, cert. ef. 1-1-09
836-043-0068
Cancellation
(1) The servicing carrier may cancel a policy after its issuance, with the approval of the Insurance Commissioner, for any of the reasons stated in this section. The servicing carrier must first provide an opportunity for cure and must file the reasons for cancellation with the Insurance Commissioner for necessary approval before issuance of the cancellation notice and inform the Plan Administrator of the reason for the cancellation. A proposed cancellation shall be deemed approved unless disapproved by the Insurance Commissioner on or before the 15th day after the servicing carrier filed the reasons for cancellation. A servicing carrier may initiate cancellation when the employer:
(a) Has failed to comply with reasonable health, safety or audit requirements;
(b) Has violated any of the terms and conditions under which the insurance was issued;
(c) Is not eligible for workers’ compensation insurance under the Plan;
(d) Refuses to allow the servicing carrier or NCCI reasonable access to its facilities or its files and records for audit or inspection;
(e) Refuses to disclose to the servicing carrier the full nature and scope of the employer’s exposure;
(f) Has had the employer’s worker leasing company license denied, revoked or suspended; or
(g) The employer does not properly report changes in ownership.
(2) The servicing carrier may cancel a policy without the approval of the Insurance Commissioner when cancellation is for any of the following reasons:
(a) Nonpayment of Plan premium, except that a servicing carrier must provide a minimum of 10 days' notice of additional premium owed prior to the obligation becoming past due;
(b) Failure to complete, submit and pay a payroll report due the insurer, if the insurer has given the employer the following notice:
Important Notice: This Policy is subject to periodic payroll reporting. Reports will be sent to you in accordance with the section entitled "Reporting Frequency" on the Information Page of your policy. Your failure to complete, submit and pay these reports to the insurance company when due may result in cancellation of your policy.
(c) Nonpayment of a premium finance agreement, as defined in ORS 746.405 with notice pursuant to ORS 656.427; or
(d) The employer properly reported changes in ownership.
(3) An insured employer whose coverage is canceled as provided in this rule must reestablish eligibility or must demonstrate entitlement to the Plan Administrator before any further assignment can be made under the Plan.
(4) If an employer fails or refuses to file any report of payroll required by the servicing carrier, the servicing carrier may estimate the payroll and make demand for premiums due thereon. If the required report and the premium due thereon are not received within ten days of actual notice of demand, the employer shall be considered in default of premium payment.
(5) The servicing carrier shall keep the Plan Administrator fully informed of any cancellation and of any reestablishment of eligibility or of compliance by the employer. Any employer whose coverage is cancelled must reestablish eligibility or demonstrate eligibility for coverage under this Plan to the Plan Administrator before the Plan Administrator may make any further assignment under the Plan.
Stat. Auth.: ORS 656.427, 656.730 & 731.244
Stats. Implemented: ORS 656.427, 656.730 & 737.265
Hist.: ID 10-1996, f. 6-27-96, cert. ef. 7-1-96; ID 3-2008, f. & cert. ef. 4-7-08; ID 18-2008, f. 12-9-08, cert. ef. 1-1-09
836-043-0071
Dispute Resolution Procedures
(1)(a) A bona fide premium dispute is established when the employer or its representative provides:
(A) Written notice to the Plan Administrator that includes all of the following:
(i) All documentation relevant to the dispute, including written notice to the insurer or the servicing carrier detailing the specific areas of dispute;
(ii) Description of the attempts to reconcile the differences; and
(iii) A specific request for a review of all documentation, appropriate action to resolve the areas of dispute and if necessary, a hearing before the appropriate administrative or regulatory body having jurisdiction over assigned risk related appeals.
(B) An estimate of the premium the employer believes to be correct, with an explanation of the premium calculation.
(C) Verification of payment of the undisputed portion of the premium provided to the servicing carrier or insurer, and the Plan Administrator.
(b) If the premium in dispute is in litigation, the employer shall provide documentation to the Plan Administrator.
(c) The Plan Administrator shall notify the servicing carrier when a bona fide premium dispute is confirmed. Upon notification, the servicing carrier shall act according to the Plan Administrator’s direction pending the resolution of the dispute. The Plan Administrator may direct the servicing carrier to:
(A) Suspend collection activity;
(B) Suspend cancellation if a dispute exists prior to the effective date of cancellation; or
(C) For policies already cancelled, refer to rules set forth in by the Plan Administrator.
(2) Any assigned risk policyholder and the producer of an assigned risk policyholder affected by the actions of their servicing carrier or NCCI shall follow the procedures set forth in ORS 731.240, 737.340 or 737.505 to review, resolve or request a hearing on any grievance.
(a) An individual employer dispute is subject to ORS 731.240, 737.340 or 737.505 as applicable and the conditions outlined in the Bona Fide Premium Dispute and Undisputed Premium Obligation. The intervention of the Plan Administrator in a dispute is limited to matters involving:
(A) Experience rating modification factors;
(B) Application of rules contained in NCCI manuals;
(C) Eligibility and assignment under the Workers’ Compensation Insurance Plan;
(D) Classification assignments;
(E) Assigned risk pricing programs; or
(F) A dispute involving other matters arising under the Plan.
(b) Upon receipt of all necessary information regarding the dispute, the Plan Administrator shall review the matter and provide a written decision within 30 days.
(3)(a) When an employer dispute concerns any of the above matters, other than the application of NCCI’s rating plan rules, or involves more than one state, the Plan Administrator shall determine the appropriate jurisdiction for the dispute to be heard, based upon the following factors:
(A) Governing state which shall be the state generating the greatest payroll;
(B) The state covered by the servicing carrier with the greatest exposure insured;
(C) The state where the operations are best represented; or
(D) In accordance with the following jurisdiction table: [Table not included. See ED. NOTE.]
(b) When a dispute concerns the application of NCCI’s rules for interstate rated risks, the Plan Administrator shall determine the appropriate jurisdiction for the dispute to be heard.
(c) Unless state-specific rules apply, the ruling of the state appeals mechanism (as determined by the Plan Administrator to have jurisdiction over the dispute) will apply to all assigned risk policies whether written by one or more servicing carriers.
(4) Upon receipt of all necessary information regarding the dispute, the Plan Administrator shall review disputes relating to the calculation or payment of producer fees and producer of record changes and provide a written decision within 30 days.
(5)(a) Any Plan participant who has a dispute with respect to any aspect of the Plan or Reinsurance Agreement including any dispute arising out of the organizing principles must first seek a review of the matter under this section by providing the following to the Plan Administrator:
(A) Written documentation detailing specific areas of the dispute;
(B) Specific request for a review of all documentation; and
(C) Appropriate actions of areas to resolve the dispute.
(b) The Plan Administrator may request additional information necessary to make a decision. All disputes submitted to the Plan Administrator are governed as follows:
(A) For disputes relating to the general operation of the Plan, including but not limited to, performance standards for servicing carrier performance, compensation and incentives and application assignment determination, the Plan Administrator shall review the matter and provide a written decision within 30 days of receipt of all necessary information regarding the dispute.
(B) Within 30 days after the Plan Administrator makes a decision and at the expense of the party, a party affected by the decision may submit a written request for binding arbitration or the party may seek a de novo review by the Insurance Commissioner.
(C) For any de novo review, the Insurance Commissioner shall follow the procedures provided in ORS 183.310 to 183.540 and 737.360 for review of a contested case.
(D) For a dispute relating to the servicing carrier selection process, refer to the Bid Protest Procedures contained in the applicable servicing carrier Request for Proposal (RFP).
(6)(a) Within 30 days after receipt of all necessary information regarding a dispute that arises under the organizing principles or a Reinsurance Agreement, the Plan Administrator or the administrator of the Reinsurance Agreement shall review the matter and provide a detailed written decision. Any party affected by the decision may request the board to review the decision by submitting a written request for review within 30 days after the date of the decision by the Reinsurance Administrator under the organizing principles. The board may:
(A) Consider the matter and render its written decision pursuant to the procedures set forth in the organizing principles, or
(B) Waive its decision and offer the aggrieved party the option of appealing directly to the Insurance Commissioner or submitting the dispute to arbitration in accordance with the terms and conditions established by the board.
(b) Any party affected by a decision of the board may seek a de novo review by the Insurance Commissioner by submitting a written request for review, within 30 days after the date of the board decision.
(c) If the dispute relates to the expulsion of a participating company under the organizing principles by the board or the noncontinuation of the reinsurance afforded under the organizing principles, the party may take the appeal directly to the Insurance Commissioner pursuant to ORS 737.360 without first complying with the procedures contained in this rule. The Insurance Commissioner has exclusive jurisdiction over all such disputes. For a review under this paragraph, the Insurance Commissioner shall follow the procedures provided in ORS 183.310 to 183.540 and 737.360 applicable to review of a contested case.
[ED. NOTE: Tables referenced are available from the agency.]
Stat. Auth.: ORS 656.427, 656.730 & 731.244
Stats. Implemented: ORS 656.527, 656.730 & 737.265
Hist.: ID 18-2008, f. 12-9-08, cert. ef. 1-1-09
836-043-0072
Voluntary Coverage
Notwithstanding OAR 836-043-0089, an insurer that wishes to insure an employer as voluntary business may do so at any time. If a servicing carrier wishes to insure voluntarily one of its plan accounts, the servicing carrier must provide written notice to both the Plan Administrator and the agent of the employer of its intent at least 30 days in advance of the effective date of the servicing carrier's voluntary coverage. If the insurer is not the servicing carrier, the servicing carrier shall cancel its policy pro rata and the assignment shall automatically terminate as of the later of the effective date of the voluntary insurer's policy or the date the voluntary insurer provides written notice to the servicing carrier of its coverage.
Stat. Auth.: ORS 656.427, ORS 656.730 & ORS 731.244
Stats. Implemented: ORS 656.427, ORS 656.730 & ORS 737.265
Hist.: ID 10-1996, f. 6-27-96, cert. ef. 7-1-96
836-043-0076
Takeout Credit
The Plan Administrator shall establish a take-out credit program. The take-out credit program shall operate in accordance with the following guidelines:
(1) Each insurer participating in the Plan who removes an employer insured through the Plan is eligible for a take-out credit application against the premium used to calculate the Plan participation base of the enrolled insurer. An insurer shall contact the take-out credit administrator to enroll in the program. Any insurer licensed in Oregon and writing workers’ compensation insurance coverage is eligible to enroll in the take-out credit program.
(2) An insurer may not receive credit for any policy removed from the Plan within one calendar year after the insurer or its affiliate wrote the policy in the voluntary market. An insurer who does not enroll in the program cannot receive take-out credit.
(3) An insurer, other than the last voluntary insurer of record, may remove a policy without any restriction on the length of time the policy resided in the assigned risk market.
(4) For the purpose of the take-out credit program, the requirements of this rule apply to an insurer's affiliates as well as to the insurer.
(5) The kind and amount of coverage to be offered a voluntary employer shall not be less than those afforded by the policy being replaced unless the kinds and amounts of coverage are refused by the employer.
(6) The granting of credits is subject to the following provisions:
(a) An insurer who removes an employer from the assigned risk market is eligible for a take-out credit application equal to the annual premium from the voluntary policy times a credit factor from the following schedule: Total Premium -- $5,000 or Less -- Total Premium -- Greater than $5,000:
(A) First Year -- 3:1 -- 1:1;
(B) Second Year -- 3:1 -- 1:1;
(C) Third Year -- 3:1 -- 1:1.
(b) Credits received under this rule are not subject to a maximum limit, except that the credits shall not reduce the participation base of an insurer below zero.
(c) An insurer shall receive a credit against the premium used to calculate its Plan participation base for the amount of verifiable annual premium reported in its Exhibit of Premiums and Losses (Statutory Page 14) of its Annual Statement for the respective calendar year. The reported premium must be stated on the same financial basis as the premiums that are reported for use in determining each insurer's Plan participation base and are subject to subsequent adjustments and audits. The definition of "net premiums written" in the Plan shall govern the description of premium used to calculate the Plan participation base. As audit premiums, retrospective adjustments and other items are developed, an insurer shall receive a credit against its participation base for the amount of the premium adjustment in the calendar year in which the adjustment is reported in the direct earned premium for Oregon entry in the Annual Statement. Regardless of when an adjustment was made or reported in the direct earned premium for Oregon entry, the adjustment shall be allowed if related to the first, second or third year of voluntary coverage by the insurer.
(d) If an insurer keeps an employer out of the assigned risk market for three consecutive years, the insurer shall receive credit for each of the three consecutive years. If the insurer does not write the insurance for three years, it shall receive credit only for the consecutive period of time that it covered the employer in the voluntary market. An insurer shall not receive any credit for an employer returned to the Plan within one calendar year of removal.
(e) An insurer must submit a request for credit annually during the three year period in order to qualify for the credit.
(f) Each year, the Plan Administrator shall perform a systematic search of policies submitted as voluntary that were previously assigned risk policies to determine their eligibility for take-out credit.
(g) The Plan Administrator shall provide enrolled insurers with a detailed Take-Out Credit Policy Report of eligible policies. The Plan Administrator shall provide the Take-Out Credit Policy Report to insurers in electronic format.
(h) Each insurer shall review and modify the Take-Out Credit Policy Report to ensure all eligible policies are included in the calculation of the credit.
(i) The Plan Administrator shall review any modifications to the Take-Out Credit Policy Report to ensure agreement. The Plan Administrator may eliminate any policy that is inaccurately reported or those modifications that the Plan Administrator cannot research for concurrence.
(j) Upon review and approval of the policies on the Take-Out Credit Policy Report, the enrolled insurer need only send an electronic reply of concurrence that indicates the official request of the insurer to receive the credit.
(k) The Plan Administrator shall grant credit only to enrolled insurers that provide electronic concurrence with the Take-Out Credit Policy Report.
Stat. Auth.: ORS 656.427, 656.730 & 731.244
Stats. Implemented: ORS 656.427, 656.730 & 737.265
Hist.: ID 10-1996, f. 6-27-96, cert. ef. 7-1-96; Administrative Reformatting 1-15-98; ID 18-2008, f. 12-9-08, cert. ef. 1-1-09
836-043-0079
Notification of Outstanding Premium
A servicing carrier or its representative shall furnish information regarding outstanding assigned risk and voluntary workers' compensation insurance premium or other workers' compensation monetary policy obligations identified by the servicing carrier or its representative to the Plan Administrator or its designee in accordance with the appropriate Assigned Carrier Performance Standards or other state market conduct or regulatory requirements. A servicing carrier shall report to the Plan Administrator within five business days of the servicing carrier’s determination all instances of noncompliance and of any compliance by the employer.
Stat. Auth.: ORS 656.427, 656.730 & 731.244
Stats. Implemented: ORS 656.427, 656.730 & 737.265
Hist.: ID 10-1996, f. 6-27-96, cert. ef. 7-1-96; ID 18-2008, f. 12-9-08, cert. ef. 1-1-09
836-043-0082
Policyholder Services
A servicing carrier shall provide all of the following to each policyholder or a representative of the insured and its producer:
(1) Access to audit, loss control and safety services.
(2) Prompt, professional handling of claims, including investigation, resolution and communication.
(3) Fair and prompt responses to complaints and disputes.
(4) Access to appropriate information regarding the classification of the business and the factors influencing the policy premium.
Stat. Auth.: ORS 656.427, 656.730 & 731.244
Stats. Implemented: ORS 656.427, 656.730 & 737.265
Hist.: ID 10-1996, f. 6-27-96, cert. ef. 7-1-96; ID 18-2008, f. 12-9-08, cert. ef. 1-1-09
836-043-0087
Producer Changes and Compensation
(1) The servicing carrier must pay a fee to the licensed agency on all new and renewal policies after the policy is issued. The servicing carrier shall pay the producer as premium is collected. The servicing carrier must process and mail fee payments within 30 days after the date the policy is issued or 30 days after the receipt of premium. The carrier may withhold payments until an accumulative total of $25 per agency is reached. However, the servicing carrier must pay the agency their fees upon request regardless of the amount or if the withholding time period exceeds six months. The fee payment also may be applied to return fees that the agency may owe to the servicing carrier from other assigned risk policies for that agency. The servicing carrier may not pay a producer fee on premium not actually collected.
(2) The producer fee paid by the servicing carrier shall be in accordance with the producer fee percentage scales and shall be paid at the rate filed by the Plan Administrator with the Director.
(3) It is the responsibility of the servicing carrier to determine whether the producer is properly licensed in the appropriate jurisdictions for payment of producer fees. If the producer listed on the application is not properly licensed, or if the employer designates a representative other than a licensed producer, the servicing carrier shall accept the assignment but the producer fee will not be paid. For all other purposes, the producer shall be treated as the producer of record.
(4) The employer may request a change to the licensed producer. The employer shall provide written notice to the servicing carrier, generally in the form of a “producer of record” letter. The request must be made prior to the date of renewal, or with the consent of the servicing carrier at another agreed upon time.
Stat. Auth.: ORS 656.427, 656.730 & 731.244
Stats. Implemented: ORS 656.427, 656.730 & 737.265
Hist.: ID 18-2008, f. 12-9-08, cert. ef. 1-1-09
836-043-0089
Confidentiality of Information
The servicing carrier shall keep in confidence and must not, except as directed by the insured or the producer of record, or as otherwise may be required by law or the Insurance Commissioner, disclose to any third party, or use for the benefit of itself or any third party, such detailed information as it may obtain by virtue of its position as the servicing carrier. Such information may be used solely for the evaluation, underwriting, and insuring of coverage under this Plan and not for any other purpose. The servicing carrier may not use any information the servicing carrier obtains in its capacity as the servicing carrier to request, encourage, or solicit employers it insures under this Plan to use the services of any specific insurance producer, agency, insurer or group of insurers, including but not limited to direct writers affiliated with the servicing carrier, for purposes of providing voluntary workers’ compensation insurance or other lines of insurance to such employer.
Stat. Auth.: ORS 656.427, 656.730 & 731.244
Stats. Implemented: ORS 656.427, 656.730 & 737.265
Hist.: ID 10-1996, f. 6-27-96, cert. ef. 7-1-96; ID 18-2008, f. 12-9-08, cert. ef. 1-1-09
836-043-0091
Self-Funded Plan
It is essential for maintaining the viability of the Plan to establish and maintain rates at a level that will permit the Plan to operate with no more than a reasonable subsidy required from voluntary insured employers. The NCCI shall maintain necessary ratemaking data in order to permit the actuarial determination of rates and rating plans appropriate for the business insured through the Plan. Each servicing carrier shall report its experience on business written under the Plan to the NCCI in a format prescribed by the NCCI. It is the responsibility of the NCCI to monitor both rate adequacy and Plan results. The NCCI shall notify the Insurance Commissioner if excessive losses are indicated to enable the Insurance Commissioner to take corrective action.
Stat. Auth.: ORS 656.427, ORS 656.730 & ORS 731.244
Stats. Implemented: ORS 656.427, ORS 656.730 & ORS 737.265
Hist.: ID 4-1994, f. & cert. ef. 4-19-94; ID 10-1996, f. 6-27-96, cert. ef. 7-1-96; Renumbered from 836-043-0080
Rating and Rating Organization Workers' Compensation Premium Audit Program System
836-043-0101
Statutory Authority; Purpose; Applicability
(1)
OAR 836-043-0101 to 836-043-0170 are adopted by the Director of the Department of
Consumer and Business Services pursuant to the requirements of ORS 737.318.
(2)
OAR 836-043-0101 to 836-043-0170 establish a premium audit program system for workers'
compensation insurance for the following purposes:
(a)
Achieving equitable premium charges to insureds and collecting credible ratemaking
data;
(b)
Prescribing minimum standards for an efficient premium audit program that ensures
an adequate proportion of an insurer's earned premium is audited and focuses on
operations where accurate reporting may be difficult or where misreportings are
more likely;
(c)
Educating insureds about the audit reporting function of the rating system;
(d)
Establishing a continuing test audit program of all insurers;
(e)
Providing an appeal process pursuant to ORS 737.318(3)(d) and 737.505(4) to (5)
for insureds to request a hearing to dispute the results of an audit, as described
in a final premium audit billing issued by an insurer to an insured.
(3)
OAR 836-043-0101 to 836-043-0170 apply to all authorized workers' compensation insurers,
the State Accident Insurance Fund Corporation, Oregon insureds, and the National
Council on Compensation Insurance.
Stat.
Auth.: ORS 731.244, 737.310 & 737.318
Stats.
Implemented: ORS 737.235, 737.318 & 737.505
Hist.:
ID 1-1988, f. & cert. ef. 1-20-88; ID 13-2012, f. 7-16-12, cert. ef. 1-1-13
836-043-0105
Definitions
As
used in OAR 836-043-0101 to 836-043-0170, unless the context requires otherwise:
(1)
"Audit" means a process of verification of information used to determine the premium
for a workers’ compensation insurance policy that is performed in one of the
following formats:
(a)
"Desk audit" means an audit performed by an insurer at a site, other than the insured’s
principal place of business, mutually agreed to by the insurer and the insured.
A desk audit does not consist of an examination of a payroll report submitted by
the insured to the insurer in lieu of an audit.
(b)
"Field audit" means an audit performed by an insurer at the insured's principal
place of business, work site, or other site mutually agreed to by the insurer and
the insured.
(2)
"Bureau" means the licensed rating organization of this state for workers' compensation
insurance.
(3)
"Classification" means a grouping of insurance risks according to a classification
system used by an insurer.
(4)
"Classification System" means a schedule of classifications and a rule or set of
rules used by an insurer for determining the classifications applicable to an insured.
(5)
"Committee" means the Oregon Workers' Compensation Rating System Review and Advisory
Committee established by OAR 836-043-0200 to 836-043-0240.
(6)
"Insured" means an employer who has been issued a workers' compensation insurance
policy by an insurer.
(7)
"Insurer" means any insurer authorized to write workers' compensation insurance
in this state or the State Accident Insurance Fund Corporation.
(8)
"Payroll" or "remuneration" means money or substitutes for money payable to workers
for their services, which are specified or defined by the rating system used by
the insurer subject to the limitations imposed in the definition of "payroll" in
ORS 656.005.
(9)
"Payroll report" means a report of an insured's payroll by class code used by an
insurer to determine the premium for an insurance policy.
(10)
"Premium" means the contractual consideration charged to an insured for an insurance
policy for a specified period of time, regardless of the timing of actual charges.
(11)
"Rate" means a monetary amount applied to the exposure units for a classification
to determine the premium for an insurance policy.
(12)
"Rating Plan" means a rule or set of rules used by an insurer to calculate premium
for an insurance policy, including all rating plan factors applied, after application
of classification premium rates to exposure units.
(13)
"Rating System" means a collection of rating plans to be used by an insurer, rules
for determining which rating plans are applicable to an insured, a classification
system and other rules used by an insurer for determining contractual consideration
for an insurance policy.
(14)
"Standard Premium" means the premium determined by application of approved rates,
including experience rating modifications and other charges in accordance with the
statistical plan as defined in OAR 836-042-0045.
(15)
"Workers' Compensation Insurance" means insurance providing coverage for the obligations
of an employer arising from illness or insurance to workers whether such obligation
is imposed by ORS Chapter 656, similar laws of the United States or agreement between
states.
Stat.
Auth.: ORS 731.244, 737.310 & 737.318
Stats.
Implemented: ORS 737.235, 737.318 & 737.505
Hist.:
ID 1-1988, f. & cert. ef. 1-20-88; ; ID 13-2012, f. 7-16-12, cert. ef. 1-1-13
836-043-0110
Insurer
Premium Audit Program
(1)
The rates, rating plans and rating systems filed with and approved by the Director
of the Department of Consumer and Business Services shall govern the audited payroll
and the adjustment of premiums, subject to the provisions of this rule.
(2)
For the purpose of determining the premium for an insurance policy producing an
annual standard premium of $10,000 or more, the insurer must perform a field audit
of the insured at least once annually, except as provided in this section. For as
long as the insurer continues to provide coverage to an insured, when the insurer
finds that the audit premium difference is less than five percent for each of two
consecutive policy years for which the insurer provided coverage, the insurer need
audit only every third renewal policy subsequent to the policy most recently audited.
If the insurer finds at any audit that the audit premium difference is five percent
or greater, the insurer must again audit the insured's policy at least annually
until the insurer finds an audit premium difference of less than five percent for
each of two consecutive policy years. For each policy year for which a policy is
not audited, the insurer shall obtain a payroll report from the insured. For purposes
of this section, the basis for the audit premium difference for an insured will
be the audited standard premium as defined in each insurer's approved rating system.
(3)
An insurer shall perform a field audit of at least five percent of all policies
that are issued by the insurer and produce an annual standard premium of less than
$10,000 but more than $1,000. In each year when a field audit of such a policy is
not performed, the insurer shall perform a desk audit or obtain a payroll report
from the insured. If neither a field or desk audit is performed nor a payroll report
is obtained, the insurer shall give satisfactory reason to the director.
(4)
When an insurer performs an initial or revised audit, the insurer shall send to
the insured a written final premium audit billing, as described in this rule and
in OAR 836-043-0170.
(5)
A final premium audit billing must include the following wording, or substantially
equivalent wording approved by the director, that is prominently displayed and in
not less than 12-point type:
Notice: You, the insured, may request a hearing to dispute the results of the audit described
in this final premium audit billing. If you want to request a hearing, you must
send a written request for a hearing to the Insurance Division of the Department
of Consumer and Business Services, State of Oregon. The Insurance Division must
receive the request not later than the 60th day after you received this billing.
Who
may request a hearing?
1.
If the insured is a sole proprietor, then the insured or an attorney for the insured
may request a hearing.
2.
If the insured is a partnership, then an attorney for the partnership or any member
of the partnership may request a hearing.
3.
If the insured is a corporation, association or organized group, then an attorney
for the corporation, association or organized group or an authorized officer or
authorized employee of the corporation, association or organized group may request
a hearing.
4.
If the insured is a governmental authority other than a state agency, then an attorney
for the governmental agency or an authorized officer or authorized employee of the
governmental authority may request a hearing. Please state in your request the date
you received this final premium audit billing. You must send the request for a hearing
using at least one of the following methods:
By
delivery:
Insurance
Division
Department
of Consumer and Business Services
350
Winter St. NE
Salem,
OR 97301-3883
By
mail:
Insurance
Division
Department
of Consumer and Business Services
PO
Box 14480
Salem,
OR 97309-0405
By
e-mail:
DCBS.INSMAIL@state.or.us
By
fax: 503-378-4351 Assistance is available on the Insurance Division's web page,
at http://www.cbs.state.or.us/external/ins/ and by e-mail, at DCBS.INSMAIL@state.or.us
If the Insurance Division timely receives your request for a hearing, the Insurance
Division will send or make available to you a petition form. In the petition, you
must explain why you believe the billing is incorrect and describe the actions you
want the director to take to correct the matter. The completed petition, along with
a complete copy of the final premium audit billing, must be received by the Insurance
Division not later than the 60th day after the date the Insurance Division received
your request for a hearing. You are entitled to a hearing only if the Insurance
Division timely receives your request for a hearing and completed petition and determines
that the director has jurisdiction over the matter. You may send a copy of your
request for hearing to your insurer so that you may attempt to resolve the dispute
with your insurer prior to a hearing. However, please remember:
1.
The 60-day period for initiating your request continues to run even though you may
be negotiating with your insurer.
2.
Your request must be received by the Insurance Division not later than the 60th
day after you received this billing. You may wish to consult with an attorney about
your case.
Stat.
Auth.: ORS 731.244, 737.310 & 737.318
Stats.
Implemented: ORS 737.318 & 737.505
Hist.:
ID 1-1988, f. & cert. ef. 1-20-88; ID 13-1988(Temp), f. & cert. ef. 7-27-88;
ID 15-1988(Temp), f. & cert. ef. 9-2-88; ID 4-1989, f. & cert. ef. 2-28-89;
ID 9-1990, f. 5-10-90, cert. ef. 6-1-90; ID 6-1997(Temp), f. & cert. ef. 5-30-97;
ID 17-1997, f. 11-25-97, cert. ef. 11-26-97; ID 1-2000, f. & cert. ef. 2-10-00;
ID 1-2007, f. & cert. ef. 1-17-07; ID 13-2012, f. 7-16-12, cert. ef. 1-1-13
836-043-0115
Insurer Audit Procedure Guide
Each
insurer shall develop audit procedures that include all of the features described
in this rule or, in place thereof, more comprehensive alternative procedures that
will consistently achieve minimum standards as measured by the Oregon Test Audit
Program under OAR 836-043-0125. The features are as follows:
(1)
The auditor shall perform a pre-audit review to ensure that the insurer provided
or made available to the auditor all relevant information and materials, as listed
in this section.
(a)
The bureau Basic Manual;
(b)
Bureau bulletins, "Scopes Manual" on classifications or similar classifications
and committee minutes pertinent to classifications and auditing procedures;
(c)
Policy information that provides a description of operations and a summary of payrolls
by classification;
(d)
Bureau Inspection & Classification Reports that provide a description of operations
and summary of employees by classification;
(e)
Bureau Experience Rating Modification Worksheets that provide payroll classifications
and claims allocation history;
(f)
Claims data in sufficient detail to verify classification assignments;
(g)
Pertinent correspondence;
(h)
Prior year's audit file if renewed, or copies of interim payroll reports, if on
an interim reporting basis.
(2)
The auditor must contact a principal or designated representative of the insured
who is familiar with the insured's operation, in order to ensure that the insured
is properly classified under Basic Manual rules.
(3)
Audit practices require the following:
(a)
Examining payrolls from the most complete and accurate records;
(b)
Determining proper payroll classifications, substantiated by a written description
of the insured's operations;
(c)
Making sufficient test checks to establish the audit’s accuracy and compliance
with Basic Manual rules when using summary type records as the payroll source;
(d)
Reconciling the total payroll with records not used in the original tabulation;
and
(e)
Providing guidance on recordkeeping practices to aid in future audits, including,
but not limited to, maintenance of verifiable payroll records.
(4)
An insurer shall give particular attention to the following factors and circumstances:
(a)
Type of entity. With respect to the type of entity being insured, the insurer shall
include factors and circumstances as follows:
(A)
If the entity is a corporation, limited liability company, limited liability partnership,
partnership, or other entity described in ORS 656.027, the name, title, classification
assignment and total remuneration for each executive officer, member, or partner
must be shown separately. All other officers of the corporation, members of the
limited liability company, or partners must also be listed. The insurer shall designate
whether each officer, member, or partner is a subject employee under ORS Chapter
656;
(B)
Listings of covered corporate officers, limited liability company members, partners,
and proprietors must include a brief description of each person’s duties.
The auditor must verify the stipulated maximum and minimum remuneration with respect
to non-subject corporate officers who have elected coverage or are covered as provided
under ORS 656.027, and assumed wage for non-subject sole proprietors, partners,
and limited liability company members who have elected coverage or are covered as
provided under ORS 656.027.
(b)
Sources and reconciliation. The insurer shall indicate the source record used to
conduct the audit and the record used for reconciliation purposes. The most commonly
used records include, but are not limited to, time records, payroll journal, individual
earnings records, prepared summary, check book, cash book, petty cash book, general
ledger, confidential ledger, bank statements, job cost records and tax returns (Federal,
Social Security/State Unemployment). The auditor must be able to reconcile the audit
product with the source record and be certain that appropriate records have been
examined to verify the inclusion of all payroll. When summary type records are used
as the audit source, sufficient sampling of the original payroll records must be
made to ensure the inclusion of all payroll. The insurer must be sure that the auditor
is able to check and list the dates (and amounts if readily available) of the opening
and closing payroll period or periods (e.g., weekly and semi-monthly) in order to
establish proper continuity from prior audits and for subsequent audits. This is
also necessary for the purpose of proper audit review.
(c)
Remuneration. The insurer shall investigate all possible sources of earnings, including
those for uninsured contract employment.
(d)
Overtime. The insurer shall indicate whether overtime was paid and, if so, whether
the records are maintained in such manner as to permit the exclusion of overtime
remuneration from total payroll, as allowed by Basic Manual rules. If overtime was
paid but not properly recorded in the insured's records, the auditor shall provide
the insured with guidance for maintaining overtime remuneration records to allow
for credit on subsequent audits. This action shall be documented on the auditor's
worksheet.
(e)
Out of state operation. The insurer shall determine if the insured uses Oregon subject
workers to perform work outside Oregon. Payroll for Oregon subject workers performing
work outside Oregon must be included in the premium, based on protection provided
through the extra-territorial provisions of Oregon law.
(f)
Clerical employees, salesmen and drivers. The insurer shall:
(A)
Verify the proper use of Classifications 8810 — Clerical Office Employees
NOC, 8742 — Salespersons or Collectors — Outside, and 7380 — Drivers,
Chauffeurs, Messengers, and Their Helpers NOC — Commercial;
(B)
Show clerical, outside sales and drivers payroll analysis on work sheets, either
for the entire audit period or for a sample period.
(g)
Classifications. The insurer shall determine the proper classifications. The insurer
shall explain if the classifications assigned to the insured at audit differ from
those shown on the insured’s policy information page or bureau Inspection
Report. Final premium charges are subject to ORS 737.310. The insurer shall obtain
a detailed description of the insured’s operations from the person or persons
in the insured's organization best able to answer inquiries regarding the following:
(A)
The service or product;
(B)
The raw materials used;
(C)
The process involved; and
(D)
How the product is marketed.
(h)
Additional classification information. The insurer shall examine the insured’s
first reports of occupational injury or illness as an additional source of classification
information when classification issues require additional inquiry. The insurer’s
review may include electronic or paper documentation.
(i)
Location. The insurer shall document any changes in the insured’s locations.
The insurer shall review payroll to assure that all locations have been included
in the audit.
(j)
Rate splits. The insurer shall determine if rate changes or normal anniversary rating
dates require payrolls to be split;
(k)
New construction or alteration. The insurer shall determine if structural alterations
or new construction work on the insured's premises has been conducted by employees
of the insured during the audit period. Payroll for these activities must be separately
rated.
(l)
New operations. The insurer shall identify any new operations, acquisitions or changes
in operations.
(m)
Longshore and Harbor Workers’ Compensation Act operations. The insurer shall
determine if the insured is engaged in operations subject to the Longshore and Harbor
Workers' Compensation Act and if such operations are covered under the policy as
evidenced by endorsement.
(n)
Division of payroll. The insurer shall determine if the insured’s records
support a division of payroll between different classifications due to an interchange
of labor, as provided for by OAR 836-042-0050 to 836-042-0060.
(5)
If the director meets with the insurer under OAR 836-043-0155 to obtain a detailed
explanation of remedial measures undertaken by the insurer, the director may request
a copy of the insurer's audit review program. If the director determines that the
insurer's program is inadequate, the director may prescribe an audit review program
for use by the insurer during the period in which the insurer must take remedial
measures.
[Publications:
Publications referenced are available from the agency.]
Stat.
Auth.: ORS 731.244, 737.310 & 737.318
Stats.
Implemented: ORS 737.318 & 656.027
Hist.:
ID 1-1988, f. & cert. ef. 1-20-88; ID 12-1998, f. & cert. ef. 9-14-98; ID
13-2012, f. 7-16-12, cert. ef. 1-1-13
836-043-0120
Minimum
Standards of Insured Education Program
(1)
At or before policy issuance, an insurer shall make available to the insured information
covering the matters identified in this section. This information may be delivered
via electronic means, as provided for under ORS Chapter 84.
(a)
Which workers are subject to the Workers' Compensation Law for whom premiums must
be paid;
(b)
What remuneration is subject to premium charges;
(c)
How to divide payroll between assigned classifications, as established in OAR 836-042-0060;
(d)
The requirements for verifiable records, as established in OAR 836-042-0060;
(e)
The existence and nature of premium audits and the appeal process afforded insureds
by ORS 737.505;
(f)
The insured’s responsibility to notify the insurer of changes in the business
structure and operations; and
(g)
The classification notice requirements prescribed by OAR 836-043-0175 to 836-043-0185.
(2)
When the insurer becomes aware of changes in the insured’s business that affect
the reporting of payroll or other exposure basis, the insurer shall provide additional
appropriate instruction to the insured.
(3)
When changes in statute, rules or rating system occur that affect reporting of payroll
or other exposure basis, the insurer shall provide notification of such changes
to insureds as soon as reasonably possible.
Stat.
Auth.: ORS 731.244, 737.310 & 737.318
Stats.
Implemented: ORS 737.318
Hist.:
ID 1-1988, f. & cert. ef. 1-20-88; ID 1-1999, f. & cert. ef. 2-19-99; ID
13-2012, f. 7-16-12, cert. ef. 1-1-13
Test Audit Program
836-043-0125
Purpose
A
Test Audit Program shall be conducted by the bureau to carry out ORS 737.318. To
perform this function, the bureau shall maintain the test audit staff for examining
pertinent records of a number of Oregon insureds and insurers established according
to the schedule in Exhibit 1 of OAR 836-043-0130, or other appropriately credible
audit levels as determined by the director. The purposes of the test audit program
are as follows:
(1)
To check the accuracy and reliability of each insurer's audits, verify the classifications
assigned, and assure that the premiums charged are based upon filed rates, rating
plans and rating systems on file with and approved by the director;
(2)
To establish minimum auditing standards and to develop a program for monitoring
insurer performance toward the achievement of established standards; and
(3)
To improve audit proficiency through the evaluation of insurer auditing practices.
[ED.
NOTE: Exhibits referenced are available from the agency.]
Stat.
Auth.: ORS 731.244 & 737.318
Stats.
Implemented: ORS 737.318
Hist.:
ID 1-1988, f. & cert. ef. 1-20-88; ID 7-1997(Temp), f. & cert. ef. 5-30-97;
ID 18-1997, f. 11-25-97, cert. ef. 11-26-97; ID 13-2012, f. 7-16-12, cert. ef. 1-1-13
836-043-0130
Selection
of Risks for Test Audit
(1)
All insurers or insurer groups shall be test audited on a continuous basis. Each
quarter, the bureau shall send a list of policies selected for test audit to each
insurer's Oregon policy issuing office or other office designated by the insurer.
(2)
The number of policies to be selected for each insurer shall be determined based
on Exhibit 1, using the insurer's current policy premium distribution and the error
ratio from the insurer's previous test audits. The policy premium distribution shall
be based on estimated annual standard premium reported by the insurer for policies
subject to selection. For each insurer, the error ratio shall be the number of policies
found to have audit errors divided by the total number of policies test audited
during the latest six quarters. The error ratio shall be assigned a credibility
weight, as described in Exhibit 1, and the complement weight shall be assigned to
the statewide error ratio of all insurers for the latest six quarters. The credibility
weighted error ratio for the insurer shall be used to determine the policy sample
rates in Exhibit 1.
(3)
The quarterly list of policies selected for test audit shall be randomly drawn from
an insurer’s entire book of workers’ compensation business, subject
to the requirements of section (2) of this rule. Additional policies may be added
at the request of the director. The list shall indicate, for each insurer or insurer
group, the insured, the policy number, the issuing office (if available) and the
policy dates. This list shall only include policies with expiration dates not less
than 90 days prior to the date of selection. Unless otherwise requested by the director,
this list shall exclude:
(a)
Wrap-up policies approved under ORS 737.602 or Sections 1 and 2, Chapter 336, Oregon
Laws 1995;
(b)
Policies for risks that have been test audited within the four-year period prior
to the date of selection; and
(c)
Policies canceled by either the insured or the insurer prior to the expiration date
of the policy.
(4)
Within 45 days after receipt of the selection list, each issuing office shall provide
the bureau the following audit material on those risks for which it is responsible:
(a)
If an audit is performed, a non-returnable copy of the auditor's work sheets and
the premium invoice;
(b)
Correspondence pertinent to proper completion of the audit;
(c)
If the insured’s payroll report has been utilized, a copy of the insured’s
payroll report and the premium invoice; and
(d)
A list of all compensable indemnity claims. The claim listing should also reflect
each compensable medical-only claim with reported loss amounts of $5,000 or more.
The bureau must receive at least the name of the injured employee and the date of
accident, although the following information must also be submitted if available;
job title, nature of injury, Basic Manual classification to which claim is assigned,
claim file number and a brief description of what the employee was doing when the
accident occurred. (See Exhibit 1.)
(5)
At least 10 days before the test auditor's planned date of call, the auditor must
inform the insured in writing of the planned date of call.
(6)
The written notice required by section (5) of this rule must include certain information.
An example of acceptable written notice is located on the Department of Consumer
and Business Services, Insurance Division website at www.insurance.oregon.gov. The
notice must include the following information:
(a)
Identification of the insurer, the insured, the policy number, and the policy period
being audited;
(b)
The scheduled date and time of the test audit;
(c)
Explanation of the test audit program and the statutory authority to conduct test
audits;
(d)
Identification of the bureau responsible for conducting the test audit;
(e)
Explanation of the bureau’s authority under the policy to examine the insured’s
records;
(f)
Explanation of the types or specific records the insured must make available to
the auditor; and
(g)
Contact information for the auditor.
(7)
The bureau shall complete the test audits within six months of the date of selection.
Test audits not completed within the six-month period may not be included in the
insurer's result. Nevertheless, the insurer shall submit a revised unit statistical
report for any late test audits that would have otherwise constituted an error.
The director may request the bureau to provide a quarterly report of test audits
that are not completed in a timely manner.
(8)
The following must be obtained from bureau files:
(a)
A policy data sheet providing all necessary information shown on the insurer's policy;
and
(b)
A copy of the latest bureau inspection.
[ED.
NOTE: Exhibits referenced are available from the agency.]
Stat.
Auth.: ORS 731.244 & 737.318
Stats.
Implemented: ORS 737.318
Hist.:
ID 1-1988, f. & cert. ef. 1-20-88; ID 11-1994, f. 12-19-94, cert. ef. 1-1-95;
ID 7-1997(Temp), f. & cert. ef. 5-30-97; ID 18-1997, f. 11-25-97, cert. ef.
11-26-97; ID 12-1998, f. & cert. ef. 9-14-98; ID 13-2012, f. 7-16-12, cert.
ef. 1-1-13
836-043-0135
Test
Audits
(1)
A Analysis of Test Audit Results shall be completed on each test audit.
(2)
The test auditor shall interview the insured or an authorized representative of
the insured in order to solicit the insured's cooperation and also to obtain all
factual data necessary for proper completion of the test audit.
(3)
If a current inspection is in the file, the test auditor shall verify data contained
in that report.
(4)
Each test audit, using the audit detail form, shall contain the following:
(a)
A reconciliation of payroll subject to premium charge, which must be made with the
independent control records of the State Unemployment Insurance quarterly reports
and FICA quarterly report;
(b)
A review of the cash disbursements journal to develop the remuneration paid to contract
labor and casual labor;
(c)
A detailed review of at least one pay period to verify proper classification;
(d)
A review of time cards to verify proper treatment of overtime remuneration;
(e)
A review of original entry records to verify proper application of the "division
of single employee's payroll" rules (OAR 836-042-0050 to 836-042-0060);
(f)
A listing by name, duties and earnings of all persons assigned to the "standard
exceptions" classifications. When size of the risk makes the listing impractical,
spot checks must be made;
(g)
A listing by name, title, duties and earnings of all covered executive officers,
partners or individuals;
(h)
A summary, by classification, of all chargeable payrolls;
(i)
A summary of differences between the test audit and the insurer audit.
(5)
Examples of the templates and forms described in this rule are located on the Department
of Consumer and Business Services, Insurance Division website at www.insurance.oregon.gov.
[ED.
NOTE: Exhibits referenced are available from the agency.]
Stat.
Auth.: ORS 731.244 & 737.318
Stats.
Implemented: ORS 737.318
Hist.:
ID 1-1988, f. & cert. ef. 1-20-88; ID 13-2012, f. 7-16-12, cert. ef. 1-1-13
836-043-0145
Disposition of Test Audits
(1)
The bureau shall submit individual results of each test audit to the office or offices
designated by the insurer as soon as the bureau audit is completed.
(2)
For those audits that do not result in a significant difference, defined as in excess
of $500 in premium or in excess of two percent of the total standard premium, whichever
is greater, the bureau must notify the insurer by letter of the name of the insured,
the policy number and the fact that the test audit was closed without change from
the original audit.
(3)
For those audits that do develop a significant premium difference, the bureau must
provide the insurer with a report explaining the difference and the effect of such
difference upon the total premium. An example of this report template is located
on the Department of Consumer and Business Services, Insurance Division website
at www.insurance.oregon.gov.
(4)
Results of test audits of individual insurers shall be confidential data under ORS
731.264.
(5)
Immediately upon receipt of the bureau's report, the insurer shall determine whether
it agrees with the bureau's findings, auditing the insured if necessary. If the
insurer agrees with the bureau's findings, the insurer shall file the corrected
information on the original or, if necessary, on a revised unit statistical report.
When the net premium difference is not sufficient to qualify as an "error" but a
single difference is sufficiently large to qualify as an error prior to any offsetting
premium amounts, the insurer shall be advised of such differences by an "advisory"
notice. Also, when individual claims have been assigned to an incorrect classification
an "advisory" notice shall also be submitted to the insurer. Upon receipt of the
"advisory" notice, the insurer shall report such payrolls or losses on the initial
or, if necessary, a "C" (corrected) Unit Statistical Report. All test audit differences
must be closed within sixty days of notification unless the insurer requests an
extension and the request is approved by the bureau.
(6)
When classifications utilized by the insurer are found to be in error, the bureau
shall take the normal appropriate action to secure compliance.
(7)
Findings resulting from test audits shall not be utilized in any action by an insurer
to enforce premium collections.
(8)
If there is disagreement with the bureau's findings, the insurer shall communicate
with the designated contact at the National Council on Compensation Insurance office
to resolve areas of contention.
(9)
When an insurer is unable to resolve test audit differences with the bureau staff,
the insurer may present an appeal to the committee.
(10)
When an insurer is unable to resolve test audit differences with the committee,
the insurer may present an appeal to the director for final determination.
[ED.
NOTE: Exhibits referenced are available from the agency.]
Stat.
Auth.: ORS 731.244 & 737.318
Stats.
Implemented: ORS 737.318
Hist.:
ID 1-1988, f. & cert. ef. 1-20-88; ID 11-1994, f. 12-19-94, cert. ef. 1-1-95;
ID 13-2012, f. 7-16-12, cert. ef. 1-1-13
836-043-0150
Summary
of Test Audit Results
(1)
Test audit results shall be summarized quarterly for the individual insurer or insurer
group, as well as for the industry as a whole. The summary must include all prior
quarters up to but not exceeding a total of six quarters. The summary must reflect
separately the results of field audits, desk audits, and reviews of payroll reports.
An example of this report template is located on the Department of Consumer and
Business Services, Insurance Division website at www.insurance.oregon.gov.
(2)
The summary of test audit results must be reported quarterly to the insurer's home
office to the attention of the designated contact. If the insurer’s home office
is located outside Oregon, a copy of the summary results must also be forwarded
to the Oregon branch or division office that reports directly to the home office.
It shall be the insurer's responsibility to keep the bureau advised of the responsible
contact to whom the summary results should be directed.
(3)
The bureau shall meet with each insurer to review its results and when requested,
may offer remedial suggestions when such action is indicated.
(4)
The bureau shall maintain sufficient records to permit accurate reporting to the
insurer and the director.
(5)
Copies of all individual insurer and summary reports shall be submitted to the director
upon completion.
[ED.
NOTE: Exhibits referenced are available from the agency.]
Stat.
Auth.: ORS 731.244 & 737.318
Stats.
Implemented: ORS 737.318
Hist.:
ID 1-1988, f. & cert. ef. 1-20-88; ID 11-1994, f. 12-19-94, cert. ef. 1-1-95;
ID 13-2012, f. 7-16-12, cert. ef. 1-1-13
836-043-0155
Test
Audit Standards
(1)
An insurer that fails to achieve the Minimum Standard of the Test Audit Performance
for six consecutive quarters shall meet with the director, or the director’s
designated representative, to provide a detailed explanation of the remedial measures
the insurer is taking to restore overall audit proficiency to an acceptable level.
An insurer meets the Minimum Standard when the insurer satisfies the requirement
that the number of premium differences in excess of $500 or two percent of the insured's
standard premium, whichever is greater, must not exceed the critical number shown
in the Table of Minimum Standards Exhibit 2.
(2)
If an insurer still fails to achieve the Minimum Standard following presentation
of remedial measures to the director, as required in section (1) of this rule, the
director may impose a penalty, including possible suspension of the insurer's certificate
of authority.
(3)
For the purposes of this rule, only policies that exceed $5,000 in annual standard
premium after test audit will be used to determine whether an insurer achieves the Minimum Standard.
[ED.
NOTE: Exhibits referenced are available from the agency.]
Stat.
Auth.: ORS 731.244 & 737.318
Stats.
Implemented: ORS 737.318
Hist.:
ID 1-1988, f. & cert. ef. 1-20-88; ID 11-1994, f. 12-19-94, cert. ef. 1-1-95;
ID 7-1997(Temp), f. & cert. ef. 5-30-97; ID 18-1997, f. 11-25-97, cert. ef.
11-26-97; ID 13-2012, f. 7-16-12, cert. ef. 1-1-13
836-043-0165
Monitoring Audit Program System
(1)
The director shall examine every insurer at least once each three years for the
purpose of determining its compliance with:
(a)
The statistical reporting requirements of OAR 836-042-0045;
(b)
The premium audit program requirements of OAR 836-043-0110 and 836-043-0115; and
(c)
The minimum standards of insured education programs of OAR 836-043-0120.
(2)
The director shall continuously monitor the bureau for the purpose of assuring its
compliance with the test audit program requirements of OAR 836-043-0125 to 836-043-0155.
Stat.
Auth.: ORS 731.244 & 737.318
Stats.
Implemented: ORS 737.235 & 737.318(3)(b)
Hist.:
ID 1-1988, f. & cert. ef. 1-20-88; ID 13-2012, f. 7-16-12, cert. ef. 1-1-13
836-043-0170
Premium
Audit Hearings
(1)
This rule establishes the procedure for an insured to request a hearing to dispute
the results of an audit, as described in a final premium audit billing issued by
an insurer to the insured, pursuant to ORS 737.318(3)(d) and 737.505(4) to (5).
If an insured wants to request a hearing, then the insured must send a written request
for a hearing to the Insurance Division. The Insurance Division must receive the
request not later than the 60th day after the insured received the final premium
audit billing. For the purpose of determining the date of receipt of a final premium
audit billing sent to the insured by mail when the receipt date is unknown to the
insured, the date of receipt shall be presumed to be three days after the postmark
date, or three days after the date of mailing, if the postmark is illegible or unavailable.
(2)
If the Insurance Division timely receives the insured’s request for a hearing,
the Insurance Division will send or make available to the insured a petition form.
In the petition, the insured must explain why it believes the billing is incorrect
and describe the actions the insured wants the director to take to correct the matter.
The petition, along with a complete copy of the final premium audit billing, must
be received by the Insurance Division not later than the 60th day after the date
the Insurance Division received the insured’s request for a hearing.
(3)
For the purposes of computing time periods specified in sections (1) and (2) of
this rule, ORS 174.120 and 174.125 shall govern.
(4)
If the Insurance Division determines that the insured is entitled to a hearing,
the Insurance Division shall notify the insured and the insurer, and also the bureau
if the statements in the petition of the insured address the use of the bureau rating
system, that the insured is entitled to a hearing and the Insurance Division has
requested the Office of Administrative Hearings to schedule and, if necessary, conduct
a hearing. The Insurance Division shall forward the insured’s request for
a hearing and petition to the insurer, and, if helpful to decide the matter, the
bureau.
(5)
An insured may request the director to stay the collection effort of an insurer
on a final premium audit billing during the pendency of an insured’s request
for a hearing, pursuant to ORS 737.505(5). The application must allege and show
good cause as required in ORS 737.505 by providing an explanation of the alleged
errors for which the insured is requesting relief. The stay must apply only to the
disputed amount. The director shall not decide whether to grant or deny the insured’s
request for a stay until after the Insurance Division has timely received the insured’s
request for a hearing and completed petition and determined that the insured is
entitled to a hearing. The director may delegate to the Office of Administrative
Hearings the authority to grant or deny the insured’s request for a stay.
(6)
Subject to the exception provided in section (7) of this rule, for purposes of ORS
737.318(3)(d) and 737.505(4) to (5), OAR 836-043-0110 and this rule, the final premium
audit billing of an insured is the first document issued by the insurer to the insured
after the insurer’s initial or revised audit of the insured that contains
all of the elements specified in this section. Failure by the insurer to include
any of the elements renders the billing incomplete as a final premium audit billing
for purposes of ORS 737.318 and 737.505 and renders the debt uncollectible until
all elements are included. An invoice issued by an insurer based on a payroll report
without having performed an audit is not considered a final premium audit billing.
The elements are as follows:
(a)
The results of the audit;
(b)
If the final premium audit billing is based on an initial audit, the amount of the
difference between the estimated standard premium reported by the insured for the
entire policy period and the final standard premium calculated after the policy
period is over, pursuant to the audit;
(c)
If the final premium audit billing is based on a revised audit, the amount of the
difference between the final standard premium calculated after the policy period
is over, pursuant to the initial audit, and the final standard premium, calculated
pursuant to the revised audit;
(d)
If the final premium audit billing is based in whole or in part on a determination
by the insurer that one or more persons are employees rather than independent contractors,
then the name of each person, a description of the positions or tasks of each named
person, and the basis for the determination;
(e)
The notice required by ORS 737.318(3)(d) and OAR 836-043-0110; and
(f)
The front page of the billing bears the title “Final Premium Audit Billing.”
(7)
If, after performing an audit of an insured, the insurer issues both a statement
of the insured’s account and a letter to the insured that explains the audit
and states the amount of the difference, the statement of account and the letter
together are considered to be the final premium audit billing and:
(a)
The insurer may provide the notification required in ORS 737.318 and OAR 836-043-0110
either in the statement of account or in the letter; and
(b)
If the statement of account and the letter are received separately, the 60-day period
within which the director must receive the request for a hearing begins upon receipt
by the insured of the later-received document.
(8)
Unless otherwise provided by statute or rule, the director shall dismiss an insured’s
request for a hearing if:
(a)
The director does not receive the insured’s written request for a hearing
within the required timeframe.
(b)
The director does not receive the insured’s completed petition within the
required timeframe.
(c)
The audit results in changes that affect a future policy period, but does not result
in changes to the policy period audited.
(d)
The director does not have jurisdiction in the matter, including, but not limited
to, the following circumstances:
(A)
The billing only addresses changes to the workers’ compensation insurance
coverage for an insured’s employees who are not Oregon subject workers.
(B)
The billing is based on an estimate of compensation paid by the insured to its employees
who are Oregon subject workers and not on actual audit results.
(C)
The billing is based on the assignment of an experience rating modification by the
bureau, in accordance with the experience rating plan adopted under OAR 836-042-0015.
Stat.
Auth.: ORS 731.244 & 737.318
Stats.
Implemented: ORS 737.318 & 737.505
Hist.:
ID 1-1988, f. & cert. ef. 1-20-88; ID 13-1988(Temp), f. & cert. ef. 7-27-88;
ID 15-1988(Temp), f. & cert. ef. 9-2-88; ID 4-1989, f. & cert. ef. 2-28-89;
ID 9-1990, f. 5-10-90, cert. ef. 6-1-90; ID 13-1998, f. & cert. ef. 9-23-98;
ID 1-2000, f. & cert. ef. 2-10-00; ID 13-2012, f. 7-16-12, cert. ef. 1-1-13
Rating and Rating Organization Worker's Compensation Insurance Classification Notice
836-043-0175
Statutory Authority; Purpose; Applicability
(1)
OAR 836-043-0175 to 836-043-0185 are adopted by the Director of the Department of
Consumer and Business Services pursuant to the provisions of ORS 737.310.
(2)
The purpose of these rules is to prescribe minimum standards for notice by insurers
to insureds regarding approved rate classifications.
(3)
These rules apply to all authorized workers' compensation insurers and the State
Accident Insurance Fund Corporation.
Stat.
Auth.: ORS 731.244 & 737.310
Stats.
Implemented: ORS 737.310
Hist.:
ID 2-1988, f. & cert. ef. 1-20-88; ID 2-1992, f. 2-6-92, cert. ef. 2-15-92;
ID 13-2012, f. 7-16-12, cert. ef. 1-1-13
836-043-0180
Definitions
As
used in OAR 836-043-0175 to 836-043-0185 unless the context requires otherwise:
(1)
"Bureau" means the licensed rating organization of this state for workers' compensation
insurance.
(2)
"Classification" means a grouping of insurance risks according to a classification
system used by an insurer.
(3)
"Classification System" means a schedule of classifications and a rule or set of
rules used by an insurer for determining the classifications applicable to an insured.
(4)
"Insurer" means any insurer authorized to transact workers' compensation insurance
or the State Accident Insurance Fund Corporation.
(5)
"Reclassification" means an addition or removal of a classification by an insurer
to a policy for an insured when the previous classification is improper or inadequate.
(6)
"Workers' Compensation Insurance" means insurance providing coverage for the obligations
of an employer arising from illness or injury to workers whether such obligation
is imposed by ORS Chapter 656, similar laws of the United States or agreement between
states.
Stat.
Auth.: ORS 731.244 & 737.310
Stats.
Implemented: ORS 737.310
Hist.:
ID 2-1988, f. & cert. ef. 1-20-88; ID 2-1992, f. 2-6-92, cert. ef. 2-15-92;
ID 13-2012, f. 7-16-12, cert. ef. 1-1-13
836-043-0185
Insurer
Classification Notice
(1)
When an insurer issues a workers' compensation insurance policy to an insured for
the first time, an insurer shall provide each insured a written rate classification
notice describing the work activities of each classification assigned. This information
may be delivered via electronic means, as provided for under ORS Chapter 84.
(2)
The rate classification notice shall include the following information:
(a)
The complete description for each classification assigned as contained in the insurers'
classification system filed with and approved by the director;
(b)
An adequate description of work activities for such classification as reviewed by
the director;
(c)
One or more publications that include basic ratemaking and classification information
and necessary records and reporting procedures for the division of payroll of an
individual employee among classifications assigned as provided for under OAR 836-042-0060;
(d)
An amendatory endorsement to the policy for reclassification assignments during
the policy year as provided for under ORS 737.310(13).
(3)
When an insurer provides the written rate classification notice required under ORS
737.310 (12) and (13), the notice must be given in the manner prescribed by section
(2) of this rule.
[ED.
NOTE: Exhibits referenced are available from the agency.]
Stat.
Auth.: ORS 731.244, 737.310(12) & 737.310(13)
Stats.
Implemented: ORS 737.310(12)
Hist.:
ID 2-1988, f. & cert. ef. 1-20-88; ID 2-1992, f. 2-6-92, cert. ef. 2-15-92;
ID 13-2012, f. 7-16-12, cert. ef. 1-1-13
Rates and Rating Organizations Workers' Compensation Rating System Review and Advisory Committee
836-043-0200
Statutory Authority; Purpose; Applicability
(1) OAR 836-043-0200 to 836-043-0240 are adopted by the Director pursuant to ORS 731.244, 737.310(13) and 737.526(1) to aid in the effectuation of insurer filings under 737.205, the review of workers' compensation insurance filings under 737.320 and the hearing process under 737.505 for persons aggrieved by the application of the rating system.
(2) The purpose of these rules is to establish an Oregon Workers' Compensation Rating System Review and Advisory Committee by which the authorized workers' compensation rating organization for this state may:
(a) Exchange information and experience data with its members and the Director;
(b) Consult and cooperate with its members and the Director with respect to National Council on Compensation Insurance filings and to application of workers' compensation rating system; and
(c) Hear insured grievances regarding the application of its rating system.
(3) These rules apply to all authorized workers' compensation insurers, the State Accident Insurance Fund Corporation and the National Council on Compensation Insurance.
Stat. Auth.: ORS 731.244, ORS 737.310(13) & ORS 737.526(1)
Stats. Implemented: ORS 737.310(13) & ORS 737.526
Hist.: ID 11-1992, f. 6-9-92, cert. ef. 6-15-92
836-043-0210
Definitions
As used in; OAR 836-043-0200 to 836-043-0240, unless the context requires otherwise:
(1) "Aggrieved Person" means any person adversely affected by application of a rating system or by any decision of the Committee.
(2) "Classification" means a grouping of insurance risks according to a classification system used by an insurer.
(3) "Classification System" means a schedule of classifications and a rule or set of rules used by an insurer for determining the classification applicable to an insured.
(4) "Committee" means the Oregon Workers' Compensation Rating System Review and Advisory Committee established by OAR 836-043-0200 to 836-043-0240.
(5) "Experience Rating" means modification of workers' compensation insurance premium according to the Experience Rating Plan Manual of the National Council on Compensation Insurance filed with the Director.
(6) "Hearing" or "Hearings" means an informal and reasonable means whereby any person aggrieved by the application of NCCI's rating system or an authorized representative of the person may be heard by the Oregon Workers' Compensation Rating System Review and Advisory Committee to review the manner in which such rating system has been applied in connection with the insurance afforded the person. This hearing does not constitute a contested case hearing within the meaning of ORS 183.310.
(7) "Insured" means an employer who has been issued a workers' compensation insurance policy by an insurer. An insured may designate, in writing, a representative to present their appeal before the Committee. The Small Business Ombudsman of the Department of Insurance and Finance may be a representative.
(8) "Insurer" means any insurer authorized to transact workers' compensation insurance and includes the State Accident Insurance Fund Corporation.
(9) "Member" means a member of the Oregon Workers' Compensation Rating System Review and Advisory Committee of the Director of the Department of Insurance and Finance.
(10) "National Council on Compensation Insurance" or "NCCI" is the rating organization that has been licensed by the Director for workers' compensation insurance, of which organization authorized workers' compensation insurers must be members pursuant to ORS 737.560.
(11) "Northwestern Division" or "NWD" is a branch of the National Council on Compensation Insurance providing related services for Oregon.
(12) "Premium" means the contractual consideration charged to an insured for insurance for a specific period of time regardless of the timing of actual charges.
(13) "Rate" means a monetary amount applied to the units of exposure basis assigned to a classification and used by an insurer to determine the premium for an insured, prior to any adjustment or adjustments resulting from the application of any rating plan.
(14) "Rating Plan" means a rule or set of rules used by an insurer to calculate premium for an insured, and the parameter values used in such calculation, after application of classification premium rates to units of exposure.
(15) "Rating System" means a collection of rating plans to be used by an insurer, rules for determining which rating plans are applicable to an insured, a classification system and other rules used by an insurer for determining contractual consideration for an insured.
(16) "Retrospective Rating" means a method of adjustment of workers' compensation insurance premium according to the insurer's rating plan for the policy of an insured based on losses incurred during the period covered by the policy.
(17) "Workers' Compensation Insurance" means insurance providing an employer coverage from the obligations of an employer arising from illness or injury to workers whether such obligation is imposed by ORS Chapter 656 of this state, similar laws of the United States, or agreements between states.
[Publications: The publication(s) referred to or incorporated by reference in this rule are available from the agency.]
Stat. Auth.: ORS 731.244, ORS 737.310(13) & ORS 737.526(1)
Stats. Implemented: ORS 737.310(13) & ORS 737.526
Hist.: ID 11-1992, f. 6-9-92, cert. ef. 6-15-92
836-043-0220
Committee Participation
(1) The Committee shall consist of seven voting and one nonvoting member as follows:
(a) Five voting members shall be insurers, one of which shall be the State Accident Insurance Fund Corporation. No two insurers that share common ownership or management so as to meet the definition of a controlled group under Sections 851(c)(3) or 1563(a) of the Internal Revenue Code shall serve together on the Committee;
(b) One voting member shall be an Oregon Workers' Compensation insured;
(c) One voting member shall be a "public body" as defined by ORS 192.410(1);
(d) The nonvoting member shall be the Director or the Director's designee.
(2) The Committee officers are as follows:
(a) Chairperson shall be the Director, or Director's designee;
(b) First Vice-chairperson and Second Vice-chairperson shall be elected by insurer voting members for annual terms provided that one of the vice-chairpersons be the State Accident Insurance Fund Corporation.
(c) Recording Secretary shall be a representative of the NCCI.
(3) Committee members shall be selected as follows:
(a) The Director shall appoint the insured member and public body members;
(b) The Director shall appoint the insurer members as follows:
(A) NCCI shall compile a list of nominees which the Director is to consider when making such appointments. The Director, however, is not required to appoint any of the nominees presented by NCCI;
(B) The list of nominees complied by NCCI shall contain no fewer than seven candidates, one of which shall be the State Accident Insurance Fund Corporation;
(C) The nominees presented by NCCI shall possess expertise in the application of the Oregon workers' compensation rating system;
(D) The nominees presented by NCCI shall, to the extent possible, represent on a written premium basis a balance between stock and non-stock insurers;
(E) NCCI shall provide the list of nominees to the Director 30 days prior to the date the Director is required to make the appointments;
(F) When an appointment is made, the Director will immediately notify NCCI regarding the identity of the insured member and public body members;
(G) In the event the Director fails to make any such appointment, the members serving on the Committee for the term immediately preceding shall continue to serve until such time as a new appointment is made.
(c) Each member appointed by the Director shall furnish to the Director, and to the NCCI the names, addresses, and telephone and facsimile numbers of the individuals which it has selected to serve as its representative and alternate on the Committee.
(4) Each insurer member's term on the Committee shall be for three years. The insurer members shall serve staggered terms. For the first term, two insurer members shall be selected for one year terms, two shall be selected for two year terms, and one shall be selected for a three year term.
(5) The insured member and public body members shall each serve for a one year term.
(6) Vacancies on the Committee shall be filled for the remainder of the unexpired term pursuant to section (3) of this rule. Newly appointed members shall be from the same class as the retiring member.
(7) Members shall be reimbursed by NCCI for the reasonable expenses connected with the Committee functions, including, but not limited to, travel expenses, food and lodging. Such reimburse-ment may be provided as a per diem allowance. Members shall receive no other compensation for their participation.
Stat. Auth.: ORS 731.244, ORS 737.310(13) & ORS 737.526(1)
Stats. Implemented: ORS 737.310(13) & ORS 737.526
Hist.: ID 11-1992, f. 6-9-92, cert. ef. 6-15-92
836-043-0230
Committee Operating Rules
(1) The term of each Committee shall commence on June 1 and expire on May 31 of the following year.
(2) The Committee shall meet either in person or by teleconference at the beginning of each term for purposes of electing the First Vice-chairperson and Second Vice-chairperson. The Chairperson shall be responsible for organizing the agenda of each meeting and each hearing, and for the conduct of each hearing. The First Vice-chairperson shall be responsible for arranging facilities, providing notice as required, and arranging for administrative support services. The Chairperson or Vice-chairperson, may delegate any of its administrative functions to other Committee officers.
(3) The Committee shall meet as needed and in accordance with the provisions of state law.
(a) Upon receipt of a grievance to the Recording Secretary, the Committee shall schedule a hearing to be convened within 90 days;
(b) Written notice of hearing shall be provided to the appellant, the insurer and the NWD within 20 days after receipt of the grievance, but not less than ten days prior to the hearing;
(c) The written notice of hearing shall contain notice of discovery rights pursuant to ORS 737.505(1) and notice of the right to be represented by counsel or have other advisors present;
(d) Hearings shall not be held unless a quorum is present either in person or by teleconference. A quorum shall consist of a simple majority. The decision of the Committee shall be by majority vote of those voting members present at the hearing;
(e) If a member has a conflict of interest with respect to a hearing scheduled before the Committee, the member shall declare such conflict of interest and either abstain from voting, or obtain the agreement of the aggrieved party that such abstention is not required. A conflict of interest shall exist when:
(A) A member has a familial relationship with the aggrieved party; or
(B) An insured member is a direct competitor of the aggrieved party; or
(C) An insured member is a part of an affiliated group, any member of which is a direct competitor of the aggrieved party; or
(D) A member is associated with the aggrieved party and comes within the definition of a controlled group as specified in Section 851(c)(3) of the Internal Revenue Code; or
(E) A member has any other material conflicting interest which could call into question that member's ability to render an unbiased decision.
(f) A conflict of interest may be waived if, after full disclosure of the facts raising such a conflict, all parties to the appeal agree to such waiver;
(g) The NCCI representative(s) on the Committee shall not be deemed to have a conflict of interest with respect to any appeal brought before the Committee based solely upon such representa-tives' affiliation with NCCI.
(4) Each decision shall be provided in writing and shall state the reason(s) for the decision. The decision shall be sent within 30 days of the hearing to all parties and to the Director:
(a) The votes of each member shall not be recorded on the decision;
(b) This decision shall be prepared by the First Vice-chairman of the Committee;
(c) This decision shall provide conspicuous notice of the appeal rights to a de novo administrative law contested case hearing before the Director pursuant to ORS 737.505(3). The NCCI shall have the right to appeal this decision at such a contested case hearing.
(5) Review of decisions of the Committee shall be accorded pursuant to ORS 737.505.
(6) Except for executive sessions held to discuss appropriate issues, all Committee meetings shall be open to any NCCI member or subscriber, insured and the general public. Executive Sessions are open to any NCCI member.
Stat. Auth.: ORS 731.244, ORS 737.310(13) & ORS 737.526(1)
Stats. Implemented: ORS 737.310(13) & ORS 737.526
Hist.: ID 11-1992, f. 6-9-92, cert. ef. 6-15-92
836-043-0240
Committee Activities
The subject matter jurisdiction of the Committee shall include but not be limited to the following:
(1) Any insured or insurer grievance regarding the application of any part of the NCCI rating system adopted by the insurer, including but not limited to:
(a) A classification;
(b) Classification system;
(c) Experience rating system or component thereof; or
(d) Rating plans including the retrospective rating plans, component parts and tables.
(2) Except for voluntary market advisory loss cost and assigned risk plan advisory rate filings, proposed filings of the NCCI for subsequent submission to Director.
(3) The calling for an analysis of any special or ordinary statistical data reports from the NCCI or its members.
(4) Special surveys or projects dealing with the rating system as may be initiated by the Director.
Stat. Auth.: ORS 731.244, ORS 737.310(13) & ORS 737.526(1)
Stats. Implemented: ORS 737.310(13) & ORS 737.526
Hist.: ID 11-1992, f. 6-9-92, cert. ef. 6-15-92
Rating and Rating Organizations
836-043-0300
Qualifications for Workers' Compensation Rating Oganizations
(1) Prior to operating in Oregon, a worker's compensation rating organization shall apply to the Director for a license. The Director shall act on the application within 60 days of the application. Prior to approving any applicant's license, the Director shall determine that the organization meets the qualifications and requirements of ORS 737.355(1).
(2) The rating organization shall include with its application the following documents:
(a) Copies of its articles of incorporation,
(b) Bylaws,
(c) Biographies of its corporate officers,
(d) A description of its operation,
(e) Copies of its last three quarterly financial statements,
(f) A copy of its two most recent annual report,
(g) Copies of its Securities and Exchange Commission filings, if any.
(3) The rating organization's application shall demonstrate to the Director's satisfaction:
(a) The level of professional staffing that the rating organization will dedicate to serving insurers within Oregon, including the number of actuaries, statisticians and economists, the number of years of experience of each professional staff member and the professional designations of its staff;.
(b) The capacity and quality of the rating organization's electronic data processing system dedicated to the workers' compensation rating system in Oregon.
(c) The rating organization's knowledge of insurance ratemaking both generally and within Oregon; and
(d) The rating organization's availability to its clients in Oregon.
Stat. Auth.: ORS 731.244 and 737.355
Stats. Implemented: ORS 737.355
Hist.: ID 3-2000, f. & cert. ef. 3-29-00
836-043-0310
Exchange of Data Among Workers' Compensation Rating Organizations
(1) Not later than the 25th day of each month, each licensed workers' compensation rating organization shall report to the statistical agent all edited data reported by its member insurers under OAR 836-042-0045 during the prior month that the rating organization finds useable for experience rating.
(2) The data to be reported by each rating organization under section (1) of this rule includes all financial data by policy year, accident year and calendar year.
Stat. Auth.: ORS 731.244 and 737.355
Stats. Implemented: ORS 737.355
Hist.: ID 3-2000, f. & cert. ef. 3-29-00
836-043-0320
Competitive Selection Process; Designation of a Workers' Compensation Statistical Agent
(1) When the Director licenses more than one workers' compensation rating organization, the Director shall notify each licensed rating organization of the Director's intent to begin a competitive process for selecting a statistical agent for gathering workers' compensation insurance data. Only a licensed workers' compensation rating organization may apply for designation as the statistical agent.
(2) The notification required in section (1) of this rule shall describe the competitive process and establish a deadline for applications and related submissions.
(3) Upon receipt of notice of the Director's intent to begin a selection process, and licensed rating organization may, in writing to the Director, waive its right to pursue selection as the designated statistical agent.
(4) Each applicant for designation as the statistical agent must submit the following with its proposal:
(a) A compilation plan that provides for:
(A) A flow of required data to the state;
(B) A flow of statewide compiled data to all rating organizations and their member insurers, and interested agents and insured employers; and
(C) A flow of individual insured employer data necessary for employerexperience rating and other individual employer rating of the insured employers of each rating organization's members to each rating organization and their member insurers, and the authorized agents of the insured employers and the insured employers;
(b) A plan for assuring timeliness, oversight and quality control of data received from the rating organizations;
(c) A description of the level of professional staffing the applicant will dedicate as statistical agent to serving the State of Oregon and rating organizations;
(d) A description of the capacity and quality of the applicant's electronic data processing system dedicated to the workers' compensation rating system in Oregon;
(e) A description of the applicant's availability to rating organizations in Oregon and its ability to assist them with their operations;
(f) A waiver of all intellectual property rights in compilations of Oregon data required to be prepared by the statistical agent; and
(g) A statement of fees that the applicant will charge rating organizations for statistical agent services with adequate itemization of the components of the fees to demonstrate they are reasonable and not excessive for the services provided
(5) The Director, upon completing a review of all applications with supporting material and such other information as the Director may require, shall designate one rating organization to serve as the statistical agent for a period of three years.
(6) The Director may extend the designation of the current statistical agent pending the competitive selection process. In the event the current statistical agent is unable or unwilling to continue, the Director may designate a temporary statistical agent pending the completion of the competitive selection process.
(7) The statistical agent may establish and assess reasonable fees against all licensed rating organizations. The statistical agent must first demonstrate to the Director that the fees will minimize costs to rating organizations without compromising data quality controls and its performance of other statutory responsibilities.
Stat. Auth.: ORS 731.244 and 737.225
Stats. Implemented: ORS 737.225
Hist.: ID 3-2000, f. & cert. ef. 3-29-00
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