Oregon Bulletin
July 1, 2011
Rule
Caption: Reporting and remittance of
workers’ compensation premium assessment.
Adm.
Order No.: WCD 3-2011
Filed with Sec. of
State: 5-16-2011
Certified to be
Effective: 7-1-11
Notice Publication
Date: 4-1-2011
Rules Amended: 436-085-0003, 436-085-0005, 436-085-0025, 436-085-0030
Subject: Revised OAR 436-085, “Premium Assessment” rules:
• Clarify
reporting and remittance requirements through the use of plain language and
removal of obsolete information.
• Redefine
“exempted earned premium” and “self-insured employer group.”
• List key
criteria for annual reporting eligibility.
Rules Coordinator: Fred Bruyns—(503) 947-7717
436-085-0003
Applicability of Rules
(1) These rules are effective July 1, 2011 to carry out
the provisions of:
(a) ORS 656.612 — Consumer and Business Services
Fund; purpose, administration, assessments, and collections.
(b) ORS 656.614 — Self-Insured Employers
Adjustment Reserve; Self-Insured Employer Group Adjustment Reserve.
(2) The director may waive procedural rules as justice
requires, unless otherwise obligated by statute.
Stat. Auth.: ORS 656.612, 656.614 & 656.726(4)
Stats. Implemented: ORS 656.612 & 656.614
Hist.: WCD 5-1985(Admin), f. 12-10-85, ef. 1-1-86; WCD
5-1987, f. 12-18-87, ef. 1-1-88; WCD 24-1990, f. 11-29-90, cert. ef. 12-26-90;
WCD 10-1991, f. 12-13-91, cert. ef. 1-1-92; WCD 2-2005, f. 3-24-05, cert. ef.
4-1-05; WCD 3-2011, f. 5-16-11, cert. ef. 7-1-11
436-085-0005
Definitions
Except where the context requires otherwise, the
construction of these rules is governed by the definitions in the Workers’
Compensation Law and as follows:
(1) “Assessable earned premium” means the amount of
earned premium, minus exempted earned premium, plus large deductible premium
credits or modifications that are subject to the premium assessment.
(2) “Direct earned premium” for the purposes of these
rules means “assessable earned premium.”
(3) “Director” means the director of the Department of
Consumer and Business Services or the director’s delegate for the matter.
(4) “Earned premium” means the amount reported to the
Oregon Department of Consumer and Business Services, Insurance Division in the
insurer’s Annual Statement, Exhibit of Premiums and Losses (Statutory Page 14),
Business in the State of Oregon, Column 2 Direct Premiums Earned, Line 16
Workers’ Compensation. These premiums:
(a) Exclude reinsurance accepted and are without
deduction of reinsurance ceded;
(b) Are before application of any large deductible
credits or modification; and
(c) Are after application of experience rating, premium
discounts, retrospective rating, audit premiums, foreign terrorism premiums,
domestic terrorism and catastrophic premiums, or other individual risk rating
adjustments, and are exclusive of deposit premiums.
(5) “Exempted earned premium” means premium earned on
insurance under jurisdiction of the federal government (e.g., U.S. Longshore
and Harbor Workers’ Compensation Act, Federal Employer’s Liability Act, and
Jones Act), and employer liability increased limits premium as reported in the
insurer’s Annual Statement, Exhibit of Premiums and Losses (Statutory Page 14),
Business in the State of Oregon, Column 2 Direct Premiums Earned, Line 16
Workers’ Compensation. All exempted earned premium must be stated on a direct
basis prior to reinsurance transactions.
(6) “Insurer” means the State Accident Insurance Fund
Corporation or an insurer authorized under ORS chapter 731 to transact workers’
compensation insurance in this state.
(7) “Premium Assessments” means moneys due the director
under ORS 656.612 and 656.614.
(8) “Self-Insured Employer” means an employer who has
been certified under ORS 656.430 as having met the qualifications of a self-insured
employer set out by ORS 656.407.
(9) “Self-Insured Employer Group” means five or more
employers certified under ORS 656.430 as having met the qualifications of a
self-insured employer set out by ORS 656.407 and OAR 436-050-0260 through
436-050-0340.
Stat. Auth.: ORS 656.726
Stats. Implemented: ORS 656.726
Hist.: WCD 5-1985(Admin), f. 12-10-85, ef. 1-1-86; WCD
5-1987, f. 12-18-87, ef. 1-1-88; WCD 24-1990, f. 11-29-90, cert. ef. 12-26-90;
WCD 2-2005, f. 3-24-05, cert. ef. 4-1-05; WCD 3-2011, f. 5-16-11, cert. ef.
7-1-11
436-085-0025
Premium Assessment; Manner and
Intervals for Payments: Insurers
Insurers must report and remit premium assessment
moneys to the director using a completed Form 440-910 as follows:
(1) No later than the 15th day of the second month
following the last day of a calendar quarter, the insurer must report and remit
premium assessment based upon the insurer’s assessable earned premium for that
quarter.
(2) The director may allow an insurer to report and
remit premium assessments annually when the annual premium assessment is less
than $1,000 for at least two consecutive years.
(3) If an eligible insurer elects not to report and pay
annually, or an eligible insurer elects to revert to reporting and paying
quarterly after having reported and paid annually for at least one year, it
must notify the director in writing prior to the first quarter’s premium
assessment due date. An insurer’s reporting and payment frequency remains in
effect the full calendar year and cannot be changed mid-year.
(4) The director may waive an insurer’s reporting
liability after confirming that the insurer has no earned premium for at least
four consecutive quarters. The waiver will remain in effect until premium is
earned.
(5) Assessable earned premium reported by insurers will
be final except for corrections made as a result of audits by the director,
examinations by the Insurance Division or insurance regulator of the insurer’s
state of domicile, or detection by the insurer of clerical error. All such corrections
will be made at the premium assessment rate in effect for the year being
corrected.
(6) Each insurer, including each insurer operating
within an insurer group, must submit a separate report using Form 440-910 and
remittance check.
(7) The insurer must maintain sufficient documentation
to support the assessable earned premium reported to the director and any
adjustments or corrections. The documentation must be sufficient for the
director to verify the amount reported, adjusted, or corrected.
Stat. Auth.: 656.612, 656.614 & 656.726(4)
Stats. Implemented: ORS 656.612 & 656.614
Hist.: WCD 5-1985(Admin), f. 12-10-85, ef. 1-1-86; WCD
5-1987, f. 12-18-87, ef. 1-1-88; WCD 24-1990, f. 11-29-90, cert. ef. 12-26-90;
WCD 10-1991, f. 12-13-91, cert. ef. 1-1-92; WCD 7-1995, f. 7-20-95, cert. ef.
10-1-95; WCD 2-2005, f. 3-24-05, cert. ef. 4-1-05; WCD 3-2011, f. 5-16-11,
cert. ef. 7-1-11
436-085-0030
Premium Assessment; Manner and
Intervals for Payments: Self-Insured Employers and Self-Insured Employer Groups
(1) As used in this rule the term “self-insured
employers” includes self-insured employer groups.
(2) For premium assessment purposes the premium of all
self-insured employers will be determined by using those rates filed with the
Insurance Division by a single insurer effective and filed by April 1, which
the director has determined will provide the lowest overall rates to all
self-insured employers.
(3) Self-insured employers may elect to have their
premium calculated either by using:
(a) The normal method of calculation which is manual
premium modified by experience rating and premium discount; or
(b) A one-year retrospective rating plan developed and
approved by the director. However, any employer becoming self-insured after
July 1, may not elect a retrospective rating plan for that fiscal year.
(4) Self-insured employers are required to calculate
and remit premium assessments based on the normal method of premium calculation
unless the current method elected is to use the one-year retrospective rating
plan.
(5) On or before May 31 of each year, the director will
issue a bulletin notifying all self-insured employers of the premium rates and
the retrospective rating plans developed under sections (2) and (3) of this
rule.
(6) On or before July 1 of each year, every
self-insured employer electing to change their current method of premium
calculation must submit written notification of the election to the director.
Once elected, the method may not be changed for that fiscal year and remains in
effect until the self-insured employer timely elects to change the method.
(7) No later than the last calendar day of the month
that follows the last day of a calendar quarter, the self-insured employer must
report and remit premium assessment using Form 440-900 or Form 440-937. The
premium assessment must be based upon the self-insured employer’s premium for
that quarter and the premium assessment rate in effect for that quarter as
prescribed in OAR 440-045. For retrospective rating plans the premium assessment
must be based upon 80 percent of the self-insured employer’s standard premium
until adjusted by retrospective rating. The director may waive the self-insured
reporting requirement after confirming that the self-insured employer has no
Oregon payroll for four consecutive quarters.
(8) Notwithstanding section (7) of this rule all
premium adjustments resulting from retrospective rating plans or payroll audits
must be made by using the premium assessment rate or rates in effect for the
period being adjusted.
(9) Retrospective rating adjustments covering periods
where more than one assessment rate applied will have the adjusted premium
prorated in direct proportion to the self-insured employer’s standard premium
for each of the periods the assessment rates differed. Total premium assessment
due for the entire period will be adjusted on the same basis.
(10) The director will determine an experience rating
modification for each self-insurance plan. The director will use the same
method as that used by the National Council on Compensation Insurance, except
that the director will use only Oregon claims and payroll exposure and will
assign a policy period of July 1 through the following June 30. The
self-insured employer’s authorized claims processing location(s) must provide
the director loss information necessary to calculate the experience rating
modification. If sufficient experience is not available to promulgate an
experience modification based on Oregon experience only, the director will
assign the self-insured employer an experience rating modification of 1.00.
(11) When the director orders an adjustment in the
experience rating modification applicable for a particular policy period, the
adjustment will be applied retroactively to the beginning of the period. Any
resulting increase in the assessment is payable on demand. Any resulting
decrease may be applied against the next quarterly assessment payment.
(12) If payroll information submitted by the
self-insured employer for use in calculating the experience rating modification
is inaccurate, the director or the self-insured employer may request a revision
of the experience rating modification. A payroll revision may be made only for
the last three calendar years. Any experience modification using that revised
payroll information will be recalculated by the director.
Stat. Auth.: ORS 656.726
Stats. Implemented: ORS 656.612 & 656.614
Hist.: WCB 2-1976(Admin)(Temp), f. & ef. 4-12-76; WCD
3-1976(Admin), f. & ef. 6-15-76; WCD 3-1980(Admin), f. & ef. 4-2-80;
WCD 3-1981(Admin)(Temp), f. 10-30-81, ef. 11-1-81; WCD 4-1982(Admin), f.
2-10-82, ef. 2-15-82; WCD 7-1982(Admin), f. & ef. 4-1-82; WCD
8-1982(Admin), f. & ef. 5-17-82; WCD 10-1982(Admin), f. 9-30-82, ef.
10-1-82; WCD 1-1983(Admin)(Temp), f. 6-30-83, ef. 7-1-83; WCD 7-1983(Admin), f.
12-22-83, ef. 12-27-83; WCD 5-1985(Admin), f. 12-10-85, cert. ef. 1-1-86;
Renumbered from OAR 436-051-0020 & 0025; WCD 5-1985(Admin), f. 12-10-85,
ef. 1-1-86; WCD 5-1987, f. 12-18-87, ef. 1-1-88; WCD 24-1990, f. 11-29-90,
cert. ef. 12-26-90; WCD 2-2005, f. 3-24-05, cert. ef. 4-1-05; WCD 3-2011, f.
5-16-11, cert. ef. 7-1-11
Notes
1.) This online version of the OREGON BULLETIN is provided for convenience of reference and enhanced access. The official, record copy of this publication is contained in the original Administrative Orders and Rulemaking Notices filed with the Secretary of State, Archives Division. Discrepancies, if any, are satisfied in favor of the original versions. Use the OAR Revision Cumulative Index found in the Oregon Bulletin to access a numerical list of rulemaking actions after November 15, 2010.
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