Subject of Possible Rule Making: Chapter 296-17 WAC, Workers' compensation premium rates, expected loss tables, experience rating plan, and retrospective rating rules.

Statutes Authorizing the Agency to Adopt Rules on this Subject: RCW 51.16.035, 51.04.020(1), and 51.18.010.

Reasons Why Rules on this Subject may be Needed and What They Might Accomplish: The Department of Labor and Industries is required by law to establish and maintain a workers' compensation classification plan and set premium rates in accordance with recognized principles of insurance. By law the plan is to recognize the hazardous nature of each industry and assign insurance rates respective with the hazard of each industry, and to adjust these rates annually or more frequently if needed to ensure solvency of the insurance trust funds. The Department of Labor and Industries is also authorized by law to offer optional rating plans to employers as a further incentive to encourage workplace safety and accident prevention. The plan is periodically updated to reflect changes in premium size ranges and other factors.

Other Federal and State Agencies that Regulate this Subject and the Process Coordinating the Rule with These Agencies: No other state, local, or federal agency regulates this subject.

Process for Developing New Rule: The Department of Labor and Industries bases its insurance rates for each industry on the loss and reporting information supplied by employers. Industries whose employers have had an improved loss record from the previous evaluation period will, as a general rule, experience a reduction in rates while industries whose employers experienced an increase in losses will generally see their insurance rates increase. The Department of Labor and Industries will also evaluate the need for an overall rate adjustment for all industries. The Department of Labor and Industries will work with the Workers' Compensation Advisory Committee and Retrospective Rating Advisory Committee on all changes to the premium and group insurance rates.

Interested parties can participate in the decision to adopt the new rule and formulation of the proposed rule before publication. The Department of Labor and Industries has tentatively scheduled two formal public hearings. The first hearing is to be held at the Spokane Labor and Industries Office on October 29, 2001, at 9:30 a.m. The second hearing is to be held at the Tumwater Labor and Industries Central Office Building on November 2, 2001, at 9:30 a.m. Inquiries can be directed to Ken Woehl of the classification services section at (360) 902-4775.

May 23, 2001

Gary Moore

Director

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