Assigned Risk Rates and Rating Values for the Michigan Workers' Compensation Placement Facility (2018)

Transcription

1 Assigned Risk Rates and Rating Values for the Michigan Workers' Compensation Placement Facility (2018) Table of Contents 1. Circular Letter 2. Class Code Rating Values 3. Footnotes 4. Miscellaneous Values 5. Weighting & Ballast Values 6. Retrospective Rating Plans

2 MICHIGAN WORKERS COMPENSATION PLACEMENT FACILITY P.O. Box 3337 Livonia, MI (734) Fax (734) Internet WEB Site: October 9, 2017 CIRCULAR LETTER # 275 TO ALL PARTICIPANTS IN THE MICHIGAN WORKERS COMPENSATION PLACEMENT FACILITY Regarding Assigned Risk Rates and Rating Values for the Michigan Workers Compensation Placement Facility - Effective 1/1/2018 Applicable to New and Renewal Policies Only Dear Member: Included in this circular letter are rating values which will be applicable to new and renewal Assigned Risk policies having effective dates on or after January 1, There is no application to outstanding policies. Please share this rate information with agents representing your firm. All information is available on our website at: Reports/category/rating-values. The 1/1/2018 rating values represent an average decrease of 7.5% from those effective 1/1/2017. The rate changes are determined by using weighted averages of 80% statewide experience and 20% Facility experience. The components of this change are as follows: Experience, Trend and Benefits -7.8% Servicing Carrier & Administrative Expense +0.6% Loss Based Expense -0.3% Overall -7.5% By industry group, the average pure premium level changes are: Manufacturing -9.4% Contracting -8.3% Office & Clerical -7.4% Goods & Services -7.5% Miscellaneous -4.2% Within each industry group, the changes will vary from the average classification depending upon the volume and character of the particular classification experience.

3 MWCPF CIRCULAR LETTER #275 Page 2 Swing limits (+/- 25%) have been applied which operate to hold individual class rates to the following maximum movement from the January 1, 2018 rates. Manufacturing Contracting Office & Clerical Goods & Services Miscellaneous from 15.6% above to 34.4% below from 16.7% above to 33.3% below from 17.6% above to 32.4% below from 17.5% above to 32.5% below from 20.8% above to 29.2% below The classifications which have been limited are: List of Classifications Limited by Upper Swing Miscellaneous Values List of Classifications Limited by Lower Swing United States Longshoremen s and Harbor Workers Compensation Coverage Percentage Due to the benefit provisions of federal and state laws, the United States Longshoremen s and Harbor Workers Compensation coverage percentage applicable only in connection with Rule XI - D-3 United States Longshoremen s and Harbor Workers Act of the Basic Manual for Michigan Workers Compensation Placement Facility is 68%, applicable to new and renewal business. As a multiplier, the percentage increase is 1.68 (rate multiplied by 1.68). 2. Retrospective Rating Plan Tax Multiplier Due to the change in the Miscellaneous Tax and in the Secondary Injury Fund, the Silicosis and Dust Disease Fund, and the Occupational Safety Fund Assessment, the tax multipliers used in connection with retrospective ratings are: A. Industrial Classes B. Federal (F) Classes or Non-F classes where rate is increased by the USL&HW Act percentage These factors are applicable to new and renewal policies.

4 MWCPF CIRCULAR LETTER #275 Page 3 3. Basis of Premium Basis of Premium applicable in accordance with the footnote instructions for Code 7220 Taxicab Company - Drivers is $30, Remuneration for Executive Officers The weekly payroll amount for corporate officers and active members of limited liability companies is $483 for the minimum weekly payroll assumption and $1,900 is the maximum. 5. Minimum Premiums The Maximum Minimum Premium is $750. The Minimum Premium multiplier is 125. Example: Manual Rate = $4.40 x 125 = $550 + $200 = $750 (Manual Rate) x (Multiplier) + (Expense Constant) = Minimum Premium The revision of rates and rating values was approved for use in the Facility and is applicable to all Facility policies with new or renewal dates of January 1, 2018 or later. Respectfully, Facility Team

5 MICHIGAN WORKERS COMPENSATION AND EMPLOYERS LIABILITY Effective January 1, 2018 APPLICABLE TO ASSIGNED RISK POLICIES ONLY Page S1 CLASS MIN D CLASS MIN D CLASS MIN D CODE RATE PREM ELR RATIO CODE RATE PREM ELR RATIO CODE RATE PREM ELR RATIO P P P P * Refer to the Footnotes Page for additional information on this class code. 09/2017 Note: D-Ratios reflect a $16,500 split point.

6 MICHIGAN WORKERS COMPENSATION AND EMPLOYERS LIABILITY Effective January 1, 2018 APPLICABLE TO ASSIGNED RISK POLICIES ONLY Page S2 CLASS MIN D CLASS MIN D CLASS MIN D CODE RATE PREM ELR RATIO CODE RATE PREM ELR RATIO CODE RATE PREM ELR RATIO F F a a a a a 6872F F M * M M M M M M M M M M M F F F M M M F M M M M M M F F F * Refer to the Footnotes Page for additional information on this class code. 09/2017 Note: D-Ratios reflect a $16,500 split point.

7 MICHIGAN WORKERS COMPENSATION AND EMPLOYERS LIABILITY Effective January 1, 2018 APPLICABLE TO ASSIGNED RISK POLICIES ONLY Page S3 CLASS MIN D CLASS MIN D CLASS MIN D CODE RATE PREM ELR RATIO CODE RATE PREM ELR RATIO CODE RATE PREM ELR RATIO 8709F F M M M M M M a a a a a * Refer to the Footnotes Page for additional information on this class code. 09/2017 Note: D-Ratios reflect a $16,500 split point.

8 MICHIGAN WORKERS COMPENSATION AND EMPLOYERS LIABILITY Effective January 1, 2018 Page 4 APPLICABLE TO ASSIGNED RISK POLICIES ONLY FOOTNOTES a F M See instructions for rating in classification section under code description. The rate provides for coverage under the United States Longshore and Harbor Workers Compensation Act and its extensions. The rate also contains a provision for the USL & HW assessment. The rate provides for coverage under Admiralty Law and Federal Employers' Liability Act (FELA). A provision for the USL & HW assessment is included for those classifications under Program II USL Act. The following classes are grouped by category for ratemaking purposes: Category Program I Program II State Program II USL&HW Railroad Construction Vessels - NOC Boats- Livery - Under 15 ton Vessels - Not Self-Propelled Railroad Operations Dredging - All Types Diving, Salvage, Wrecking - Marine Railroad: Sales, Collectors or Messenger Railroad: Clerical Office - NOC P Classification is computed on a per capita basis. * Class codes with special footnotes: 5038 Refer to "Painting: Metal Structures or Bridges" on Part Two-Classifications 7720 When part-time or volunteer police officers are employed, the actual remuneration of all such persons shall be included with the payroll of regular police officers in computing the premium. In no case, however, shall the remuneration of any such police officers be taken at less than $400 per person per annum Refer to "Scaffolds or Sidewalk Bridges-Installation" on Part Two-Classifications

9 MICHIGAN WORKERS COMPENSATION AND EMPLOYERS LIABILITY Effective January 1, 2018 Page 5 APPLICABLE TO ASSIGNED RISK POLICIES ONLY MISCELLANEOUS VALUES Basis of premium applicable in accordance with the footnote instructions for Code "Taxicab Co. - Drivers": $30, Expected Loss Ratio - for use in return of rating plan deposits Expense Constant applicable in accordance with Basic Manual Rule VI-D-2 $ Remuneration for Executive Officers Active Members LLC's Minimum $483/wk Athletic Teams and Traveling Carnivals Maximum $1,900/wk Remuneration for Spouse of Sole Proprietors - fixed amount Remuneration for Partners - fixed amount $19,800/yr $19,800/yr The Terrorism Risk Insurance Program Reauthorization Act (TRIPRA) of 2015 provides for partial reimbursement by the United States for insured workers compensation losses due to terrorism. Additional insurer loss liability exists under TRIPRA because TRIPRA provides partial reimbursement. In addition, TRIPRA is scheduled to expire at year-end The rates on Exhibit III do not include a provision for this exposure. Effective January 1, 2015 an endorsement entitled Terrorism Risk Insurance Program Reauthorization Act Disclosure Endorsement (WC B) must be attached to all Michigan residual market policies; and, as of this date a surcharge of 1 cent per 100 dollars of payroll will be assessed on all new and renewal policies in the Michigan pool. (See Michigan WC Placement Facility Circular Number 261 found on the CAOM/Facility web site United States Longshore and Harbor Workers' Compensation Coverage percentage applicable only in connection with Rule XI-D-3 "U.S. Longshore and Harbor Workers' Compensation Act" of the Basic Manual. 68% (Multiply a Non-'F' classification advisory loss cost by a factor of This factor adjusts for the differences in state and federal benefits and assessments. The factor to adjust for differences in benefits only is 1.61). NOTE: Basic Manual refers to the Basic Manual for Michigan Workers' Compensation Placement Facility

10 MICHIGAN EXPERIENCE RATING PLAN MANUAL PART FIVE Page 7 Effective January 1, 2018 TABLE OF WEIGHTING VALUES APPLICABLE TO ALL POLICIES Expected Weighting Expected Weighting Losses Values Losses Values 0-1, , , ,383-5, , , ,588-9, , , ,883-14, , , ,271-18, ,205-1,021, ,755-31, ,021,604-1,079, ,368-46, ,079,568-1,141, ,693-60, ,141,459-1,207, ,324-73, ,207,691-1,278, ,595-86, ,278,737-1,355, , , ,355,142-1,437, , , ,437,538-1,526, , , ,526,657-1,623, , , ,623,359-1,728, , , ,728,654-1,843, , , ,843,741-1,970, , , ,970,055-2,109, , , ,109,321-2,263, , , ,263,641-2,435, , , ,435,596-2,628, , , ,628,391-2,846, , , ,846,061-3,093, , , ,093,752-3,378, , , ,378,135-3,708, , , ,708,018-4,095, , , ,095,268-4,556, , , ,556,279-5,114, , , ,114,341-5,803, , , ,803,709-6,676, , , ,676,905-7,818, , , ,818,774-9,375, , , ,375,863-11,624, , , ,624,988-15,159, , , ,159,321-21,521, , , ,521,113-36,365, , , ,365, ,586, , , ,586,090 AND OVER , , , , , , (a) State Per Claim Accident Limitation $165,000 (b) State Multiple Claim Accident Limitation $330,000 (c) USL&HW Per Claim Accident Limitation $831,500 (d) USL&HW Multiple Claim Accident Limitation $1,663,000 (e) Employers Liability Accident Limitation $60,000 (f) USL&HW Act -- Expected Loss Factor -- Non-F Classes % Cap on Modifications = (0.0004) x [(Expected Losses) / (6.60)]

11 MICHIGAN EXPERIENCE RATING PLAN MANUAL EXHIBIT III PART FIVE Effective January 1, 2018 TABLE OF BALLAST VALUES APPLICABLE TO ALL POLICIES Expected Ballast Expected Ballast Expected Ballast Losses Values Losses Values Losses Values Page ,500 16,500 1,139,167-1,172, ,000 2,293,832-2,326, ,500 35,501-61,099 19,800 1,172,148-1,205, ,300 2,326,827-2,359, ,800 61,100-90,513 23,100 1,205,131-1,238, ,600 2,359,823-2,392, ,100 90, ,542 26,400 1,238,114-1,271, ,900 2,392,818-2,425, , , ,326 29,700 1,271,098-1,304, ,200 2,425,814-2,458, , , ,509 33,000 1,304,083-1,337, ,500 2,458,810-2,491, , , ,925 36,300 1,337,069-1,370, ,800 2,491,806-2,524, , , ,488 39,600 1,370,055-1,403, ,100 2,524,802-2,557, , , ,149 42,900 1,403,042-1,436, ,400 2,557,798-2,590, , , ,878 46,200 1,436,030-1,469, ,700 2,590,794-2,623, , , ,657 49,500 1,469,018-1,502, ,000 2,623,791-2,656, , , ,474 52,800 1,502,006-1,534, ,300 2,656,787-2,689, , , ,319 56,100 1,534,996-1,567, ,600 2,689,783-2,722, , , ,187 59,400 1,567,985-1,600, ,900 2,722,780-2,755, , , ,072 62,700 1,600,975-1,633, ,200 2,755,777-2,788, , , ,972 66,000 1,633,966-1,666, ,500 2,788,773-2,821, , , ,884 69,300 1,666,957-1,699, ,800 2,821,770-2,854, , , ,806 72,600 1,699,948-1,732, ,100 2,854,767-2,887, , , ,736 75,900 1,732,939-1,765, ,400 2,887,764-2,920, , , ,674 79,200 1,765,931-1,798, ,700 2,920,761-2,953, , , ,617 82,500 1,798,923-1,831, ,000 2,953,758-2,986, , , ,565 85,800 1,831,916-1,864, ,300 2,986,755-3,019, , , ,518 89,100 1,864,908-1,897, ,600 3,019,753-3,052, , , ,475 92,400 1,897,901-1,930, ,900 3,052,750-3,085, , , ,436 95,700 1,930,894-1,963, ,200 3,085,747-3,118, , , ,399 99,000 1,963,888-1,996, ,500 3,118,745-3,151, , , , ,300 1,996,881-2,029, , , , ,600 2,029,875-2,062, , , , ,900 2,062,869-2,095, , , , ,200 2,095,863-2,128, , ,279-1,007, ,500 2,128,858-2,161, ,000 1,007,254-1,040, ,800 2,161,852-2,194, ,300 1,040,230-1,073, ,100 2,194,847-2,227, ,600 1,073,208-1,106, ,400 2,227,842-2,260, ,900 1,106,187-1,139, ,700 2,260,837-2,293, ,200 For Expected Losses greater than 3,151,741, the Ballast Value can be calculated using the following formula (rounded to the nearest 1): Ballast = (0.10) x (Expected Losses) x (Expected Losses) x (6.60) / (Expected Losses + (700) x (6.60)) Cap on Modifications = (0.0004) x [(Expected Losses) / (6.60)]

12 MICHIGAN WORKERS COMPENSATION AND EMPLOYERS LIABILITY Effective January 1, 2018 Page 6 APPLICABLE TO ASSIGNED RISK POLICIES ONLY 1. Table of Rating Values Applicable Table One Year XXIII B-Michigan 2. Tax Multipliers a. State (non-f Classes) b. Federal Classes, or non-f classes where rate is increased by the USL&HW Act Percentage