WSR 01-23-061

PERMANENT RULES

DEPARTMENT OF

LABOR AND INDUSTRIES

[ Filed November 20, 2001, 11:35 a.m. , effective January 1, 2002 ]

Date of Adoption: November 20, 2001.

Purpose: Adopt January 1, 2002, rate and experience rating plan revisions with adjustments to individual risk classifications which includes a 1.8% general rate increase.

Citation of Existing Rules Affected by this Order: Amending WAC 296-17-855, 296-17-875, 296-17-880, 296-17-885, 296-17-890, 296-17-895, 296-17-89502, 296-17-90492, 296-17-90493, 296-17-90494, 296-17-90495, 296-17-90496, 296-17-90497, and 296-17-920.

Statutory Authority for Adoption: RCW 51.04.020, 51.16.035, 51.32.073, 51.18.010.

Adopted under notice filed as WSR 01-19-070 on September 19, 2001.

Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.

Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.

Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 14, Repealed 0.

Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 0, Repealed 0.

Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 14, Repealed 0.
Effective Date of Rule: January 1, 2002.

November 20, 2001

Gary Moore

Director

OTS-5139.1


AMENDATORY SECTION(Amending WSR 00-23-101, filed 11/21/00, effective 1/1/01)

WAC 296-17-855   Experience modification.   The basis of the experience modification shall be a comparison of the actual losses charged to an employer during the experience period with the losses which would be expected for an average employer reporting the same exposures in each classification. The comparison shall contain actuarial refinements designed to mitigate the effects of losses which may be considered catastrophic or of doubtful statistical significance, due consideration being given to the volume of the employer's experience. Except for those employers who qualify for an adjusted experience modification as specified in WAC 296-17-860 or 296-17-865, the experience modification shall be calculated from the formula:


MODIFICATION
=		 Ap+ WAe+ (1-W) Ee+ B
E+ B

The components Ap, WAe, and (1-W) Ee are values which shall be charged against an employer's experience record. The component, E, shall be the expected value of these charges for an average employer reporting the same exposures in each classification. The meaning and function of each symbol in the formula is specified below.

"Ap" signifies "primary actual losses." For each claim the primary actual loss is defined as that portion of the claim which is considered completely rateable for all employers and which is to enter the experience modification calculation at its full value. For each claim in excess of (($10,936)) $11,764 the primary actual loss shall be determined from the formula:

PRIMARY LOSS = ((27,340)) 29,410
x total loss
Total loss + ((16,404)) 17,646

Primary actual losses for selected claim values are shown in Table I. For each claim less than (($10,936)) $11,764 the full value of the claim shall be considered a primary loss.

"Ae" signifies "excess actual losses." For each claim the excess actual loss is defined as that portion of the claim which is not considered completely rateable for all employers. The excess actual loss for each claim shall be determined by subtracting the primary loss from the total loss.

"W" signifies "W value." For each employer, the W value determines the portion of the actual excess losses which shall be included in the calculation of his experience modification, due consideration being given to the volume of his experience. This amount is represented by the symbol "WAe" in the experience modification formula. W values are set forth in Table II.

"E" signifies "expected losses." An employer's expected losses shall be determined by multiplying his reported exposure in each classification during the experience period by the classification expected loss rate. Expected loss rates are set forth in Table III.

"Ee" signifies "expected excess losses." Expected losses in each classification shall be multiplied by the classification "D-Ratio" to obtain "expected primary losses." Expected excess losses shall then be calculated by subtracting expected primary losses from expected total losses. Each employer shall have a statistical charge included in the calculation of his experience modification, said charge to be actuarially equivalent to the amount forgiven an average employer because of the exclusion of a portion of his excess actual losses. This charge is represented by "(1-W) Ee" in the experience modification formula. D-Ratios are set forth in Table III.

"B" signifies "B value" or "ballast." In order to limit the effect of a single severe accident on the modification of a small employer, a stabilizing element (B value) shall be added to both actual and expected losses. B values are set forth in Table II.

[Statutory Authority: RCW 51.04.020, 51.16.035, 51.32.073, 51.18.010. 00-23-101, 296-17-855, filed 11/21/00, effective 1/1/01. Statutory Authority: RCW 51.16.035, 51.04.020. 00-14-052, 296-17-855, filed 7/1/00, effective 7/1/00. Statutory Authority: RCW 51.04.020, 51.16.035 and 51.32.073. 99-24-055, 296-17-855, filed 11/29/99, effective 12/31/99; 98-24-094, 296-17-855, filed 12/1/98, effective 1/1/99; 97-24-062, 296-17-855, filed 12/1/97, effective 1/1/98; 96-24-063, 296-17-855, filed 11/29/96, effective 1/1/97. Statutory Authority: RCW 51.04.020. 95-23-080, 296-17-855, filed 11/20/95, effective 1/1/96; 94-24-007, 296-17-855, filed 11/28/94, effective 1/1/95; 93-24-114, 296-17-855, filed 12/1/93, effective 1/1/94. Statutory Authority: RCW 51.04.020(1) and 51.16.035. 93-12-093, 296-17-855, filed 5/31/93, effective 7/1/93; 92-24-063, 296-17-855, filed 11/30/92, effective 1/1/93; 91-24-053, 296-17-855, filed 11/27/91, effective 1/1/92; 90-24-042, 296-17-855, filed 11/30/90, effective 1/1/91; 89-24-051 (Order 89-22), 296-17-855, filed 12/1/89, effective 1/1/90. Statutory Authority: RCW 51.16.035 and 51.04.020. 88-24-012 (Order 88-30), 296-17-855, filed 12/1/88, effective 1/1/89. Statutory Authority: RCW 51.16.035. 87-24-060 (Order 87-26), 296-17-855, filed 12/1/87, effective 1/1/88. Statutory Authority: RCW 51.04.020(1) and 51.16.035. 86-24-042 (Order 86-41), 296-17-855, filed 11/26/86. Statutory Authority: RCW 51.16.035. 85-24-032 (Order 85-33), 296-17-855, filed 11/27/85, effective 1/1/86; 84-24-016 (Order 84-23), 296-17-855, filed 11/28/84, effective 1/1/85; 83-24-017 (Order 83-36), 296-17-855, filed 11/30/83, effective 1/1/84; 82-24-047 (Order 82-38), 296-17-855, filed 11/29/82, effective 1/1/83; 81-24-042 (Order 81-30), 296-17-855, filed 11/30/81, effective 1/1/82; 80-17-016 (Order 80-23), 296-17-855, filed 11/13/80, effective 1/1/81. Statutory Authority: RCW 51.04.030 and 51.16.035. 79-12-086 (Order 79-18), 296-17-855, filed 11/30/79, effective 1/1/80; Order 77-27, 296-17-855, filed 11/30/77, effective 1/1/78; Order 74-40, 296-17-855, filed 11/27/74, effective 1/1/75; Order 73-22, 296-17-855, filed 11/9/73, effective 1/1/74.]


AMENDATORY SECTION(Amending WSR 00-23-101, filed 11/21/00, effective 1/1/01)

WAC 296-17-875   Table I.  

((Primary Losses for Selected Claim Values

CLAIM VALUE PRIMARY LOSS
10,936 10,936
11,043 11,000
12,832 12,000
14,871 13,000
17,216 14,000
23,145 16,000
31,614 18,000
44,698 20,000
67,582 22,000
169,663* 24,930
273,400** 25,792))

))
* Average death value
** Maximum claim value

Primary Losses for Selected Claim Values

CLAIM VALUE PRIMARY LOSS
11,764 11,764
12,163 12,000
13,979 13,000
16,031 14,000
18,368 15,000
24,173 17,000
32,207 19,000
44,063 21,000
63,316 23,000
193,599* 26,953
294,100** 27,745

* Average death value
** Maximum claim value

[Statutory Authority: RCW 51.04.020, 51.16.035, 51.32.073, 51.18.010. 00-23-101, 296-17-875, filed 11/21/00, effective 1/1/01. Statutory Authority: RCW 51.04.020, 51.16.035 and 51.32.073. 99-24-055, 296-17-875, filed 11/29/99, effective 12/31/99; 98-24-094, 296-17-875, filed 12/1/98, effective 1/1/99; 97-24-062, 296-17-875, filed 12/1/97, effective 1/1/98; 96-24-063, 296-17-875, filed 11/29/96, effective 1/1/97. Statutory Authority: RCW 51.04.020. 95-23-080, 296-17-875, filed 11/20/95, effective 1/1/96; 94-24-007, 296-17-875, filed 11/28/94, effective 1/1/95; 93-24-114, 296-17-875, filed 12/1/93, effective 1/1/94. Statutory Authority: RCW 51.04.020(1) and 51.16.035. 92-24-063, 296-17-875, filed 11/30/92, effective 1/1/93; 91-24-053, 296-17-875, filed 11/27/91, effective 1/1/92; 90-24-042, 296-17-875, filed 11/30/90, effective 1/1/91; 89-24-051 (Order 89-22), 296-17-875, filed 12/1/89, effective 1/1/90. Statutory Authority: RCW 51.16.035 and 51.04.020. 88-24-012 (Order 88-30), 296-17-875, filed 12/1/88, effective 1/1/89. Statutory Authority: RCW 51.16.035. 87-24-060 (Order 87-26), 296-17-875, filed 12/1/87, effective 1/1/88. Statutory Authority: RCW 51.04.020(1) and 51.16.035. 86-24-042 (Order 86-41), 296-17-875, filed 11/26/86. Statutory Authority: RCW 51.16.035. 86-12-041 (Order 86-18), 296-17-875, filed 5/30/86, effective 7/1/86; 85-24-032 (Order 85-33), 296-17-875, filed 11/27/85, effective 1/1/86; 84-24-016 (Order 84-23), 296-17-875, filed 11/28/84, effective 1/1/85; 83-24-017 (Order 83-36), 296-17-875, filed 11/30/83, effective 1/1/84; 82-24-047 (Order 82-38), 296-17-875, filed 11/29/82, effective 1/1/83; 81-24-042 (Order 81-30), 296-17-875, filed 11/30/81, effective 1/1/82; 80-17-016 (Order 80-23), 296-17-875, filed 11/13/80, effective 1/1/81. Statutory Authority: RCW 51.04.030 and 51.16.035. 79-12-086 (Order 79-18), 296-17-875, filed 11/30/79, effective 1/1/80. Statutory Authority: RCW 51.04.020(1) and 51.16.035. 78-12-043 (Order 78-23), 296-17-875, filed 11/27/78, effective 1/1/79; Order 77-27, 296-17-875, filed 11/30/77, effective 1/1/78; Order 76-36, 296-17-875, filed 11/30/76; Order 75-38, 296-17-875, filed 11/24/75, effective 1/1/76; Order 74-40, 296-17-875, filed 11/27/74, effective 1/1/75; Order 73-22, 296-17-875, filed 11/9/73, effective 1/1/74.]


AMENDATORY SECTION(Amending WSR 00-23-101, filed 11/21/00, effective 1/1/01)

WAC 296-17-880   Table II.  

"B" and "W" Values


Maximum Claim Value = (($273,400)) $294,100

Average Death Value = (($169,663)) $193,599

((Expected Losses B W
5,923 & under 51,584 0.00
5,924 - 11,935 51,068 0.01
11,936 - 18,037 50,552 0.02
18,038 - 24,231 50,036 0.03
24,232 - 30,520 49,521 0.04
30,521 - 36,906 49,005 0.05
36,907 - 43,391 48,489 0.06
43,392 - 49,979 47,973 0.07
49,980 - 56,671 47,457 0.08
56,672 - 63,471 46,941 0.09
63,472 - 70,381 46,426 0.10
70,382 - 77,404 45,910 0.11
77,405 - 84,543 45,394 0.12
84,544 - 91,801 44,878 0.13
91,802 - 99,183 44,362 0.14
99,184 - 106,690 43,846 0.15
106,691 - 114,326 43,331 0.16
114,327 - 122,096 42,815 0.17
122,097 - 130,003 42,299 0.18
130,004 - 138,050 41,783 0.19
138,051 - 146,242 41,267 0.20
146,243 - 154,583 40,751 0.21
154,584 - 163,078 40,236 0.22
163,079 - 171,731 39,720 0.23
171,732 - 180,546 39,204 0.24
180,547 - 189,529 38,688 0.25
189,530 - 198,685 38,172 0.26
198,686 - 208,019 37,656 0.27
208,020 - 217,537 37,140 0.28
217,538 - 227,244 36,625 0.29
227,245 - 237,147 36,109 0.30
237,148 - 247,251 35,593 0.31
247,252 - 257,564 35,077 0.32
257,565 - 268,093 34,561 0.33
268,094 - 278,844 34,045 0.34
278,845 - 289,825 33,530 0.35
289,826 - 301,044 33,014 0.36
301,045 - 312,508 32,498 0.37
312,509 - 324,228 31,982 0.38
324,229 - 336,211 31,466 0.39
336,212 - 348,467 30,950 0.40
348,468 - 361,006 30,435 0.41
361,007 - 373,838 29,919 0.42
373,839 - 386,975 29,403 0.43
386,976 - 400,427 28,887 0.44
400,428 - 414,206 28,371 0.45
414,207 - 428,325 27,855 0.46
428,326 - 442,798 27,340 0.47
442,799 - 457,638 26,824 0.48
457,639 - 472,860 26,308 0.49
472,861 - 488,480 25,792 0.50
488,481 - 504,513 25,276 0.51
504,514 - 520,978 24,760 0.52
520,979 - 537,891 24,244 0.53
537,892 - 555,273 23,729 0.54
555,274 - 573,144 23,213 0.55
573,145 - 591,526 22,697 0.56
591,527 - 610,441 22,181 0.57
610,442 - 629,913 21,665 0.58
629,914 - 649,968 21,149 0.59
649,969 - 670,635 20,634 0.60
670,636 - 691,941 20,118 0.61
691,942 - 713,917 19,602 0.62
713,918 - 736,597 19,086 0.63
736,598 - 760,016 18,570 0.64
760,017 - 784,212 18,054 0.65
784,213 - 809,224 17,539 0.66
809,225 - 835,095 17,023 0.67
835,096 - 861,872 16,507 0.68
861,873 - 889,604 15,991 0.69
889,605 - 918,344 15,475 0.70
918,345 - 948,149 14,959 0.71
948,150 - 979,080 14,444 0.72
979,081 - 1,011,204 13,928 0.73
1,011,205 - 1,044,593 13,412 0.74
1,044,594 - 1,079,323 12,896 0.75
1,079,324 - 1,115,479 12,380 0.76
1,115,480 - 1,153,152 11,864 0.77
1,153,153 - 1,192,440 11,348 0.78
1,192,441 - 1,233,451 10,833 0.79
1,233,452 - 1,276,303 10,317 0.80
1,276,304 - 1,321,124 9,801 0.81
1,321,125 - 1,368,055 9,285 0.82
1,368,056 - 1,417,250 8,769 0.83
1,417,251 - 1,468,879 8,253 0.84
1,468,880 - 1,523,129 7,738 0.85
1,523,130 - 1,580,207 7,222 0.86
1,580,208 - 1,640,343 6,706 0.87
1,640,344 - 1,703,791 6,190 0.88
1,703,792 - 1,770,835 5,674 0.89
1,770,836 - 1,841,792 5,158 0.90
1,841,793 - 1,917,019 4,643 0.91
1,917,020 - 1,996,915 4,127 0.92
1,996,916 - 2,081,932 3,611 0.93
2,081,933 - 2,172,583 3,095 0.94
2,172,584 - 2,269,450 2,579 0.95
2,269,451 - 2,373,199 2,063 0.96
2,373,200 - 2,484,595 1,548 0.97
2,484,596 - 2,604,521 1,032 0.98
2,604,522 - 2,733,999 516 0.99
2,734,00 Over 0 1.00))
Expected Losses B W
6,371 Under 55,490 0.00
6,372 - 12,839 54,935 0.01
12,840 - 19,402 54,380 0.02
19,403 - 26,066 53,825 0.03
26,067 - 32,831 53,270 0.04
32,832 - 39,700 52,716 0.05
39,701 - 46,677 52,161 0.06
46,678 - 53,763 51,606 0.07
53,764 - 60,962 51,051 0.08
60,963 - 68,276 50,496 0.09
68,277 - 75,710 49,941 0.10
75,711 - 83,264 49,386 0.11
83,265 - 90,944 48,831 0.12
90,945 - 98,752 48,276 0.13
98,753 - 106,692 47,721 0.14
106,693 - 114,768 47,167 0.15
114,769 - 122,982 46,612 0.16
122,983 - 131,340 46,057 0.17
131,341 - 139,846 45,502 0.18
139,847 - 148,502 44,947 0.19
148,503 - 157,315 44,392 0.20
157,316 - 166,287 43,837 0.21
166,288 - 175,425 43,282 0.22
175,426 - 184,733 42,727 0.23
184,734 - 194,216 42,172 0.24
194,217 - 203,879 41,618 0.25
203,880 - 213,728 41,063 0.26
213,729 - 223,769 40,508 0.27
223,770 - 234,007 39,953 0.28
234,008 - 244,449 39,398 0.29