WSR 05-23-162

PERMANENT RULES

DEPARTMENT OF

LABOR AND INDUSTRIES

[ Filed November 22, 2005, 4:33 p.m. , effective January 1, 2006 ]


     

     Purpose: Chapter 296-17 WAC, General reporting rules, classifications, audit and recordkeeping, rates and rating system for Washington workers' compensation insurance (2006 workers' compensation premium rates), this rule-making order will adopt risk classification premium base rates and experience rating plan tables to reflect updated loss experience effective January 1, 2006.

     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, and 51.32.073.

      Adopted under notice filed as WSR 05-18-090 on September 7, 2005.

     Changes Other than Editing from Proposed to Adopted Version: The department originally proposed a general rate increase of 3.8%. However, as a result of public comments and review of the most recent financial statements the department will adopt a -0.4% general rate reduction.

     Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.

     Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.

     Number of Sections Adopted on the Agency's Own Initiative: New 0, Amended 14, Repealed 0.

     Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 0, Repealed 0.

     Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0;      Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 0, Repealed 0.

     Date Adopted: November 22, 2005.

Gary Weeks

Director

OTS-8296.2


AMENDATORY SECTION(Amending WSR 04-24-025, filed 11/23/04, effective 1/1/05)

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 $((17,124)) 18,972 the primary actual loss shall be determined from the formula:

PRIMARY LOSS = ((42,810)) 47,430
x total loss
Total loss + ((25,686)) 28,458

     Primary actual losses for selected claim values are shown in Table I. For each claim less than $((17,124)) 18,972 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, and 51.32.073. 04-24-025, § 296-17-855, filed 11/23/04, effective 1/1/05. Statutory Authority: RCW 51.04.020, 51.16.035, 51.32.073, and 51.18.010. 03-24-066, § 296-17-855, filed 12/1/03, effective 1/1/04. Statutory Authority: RCW 51.16.035, 51.32.073, 51.18.010, and 51.04.020(1). 02-24-029, § 296-17-855, filed 11/27/02, effective 1/1/03. Statutory Authority: RCW 51.04.020, 51.16.035, 51.32.073, 51.18.010. 01-23-061, § 296-17-855, filed 11/20/01, effective 1/1/02; 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 04-24-025, filed 11/23/04, effective 1/1/05)

WAC 296-17-875   Table I.  

Primary Losses for Selected Claim Values
Effective January 1, ((2005)) 2006

CLAIM VALUE PRIMARY LOSS
((17,124 17,124
18,636 18,000
22,522 20,000
27,155 22,000
32,773 24,000
39,728 26,000
48,562 28,000
60,155 30,000
76,036 32,000
100,000 34,061
150,000 36,551
209,345* 38,131
300,000 39,434
428,100** 40,387))
18,972 18,972
20,750 20,000
24,620 22,000
29,150 24,000
34,527 26,000
41,010 28,000
48,981 30,000
59,019 32,000
80,131 35,000
100,000 36,923
125,000 38,634
150,000 39,867
208,747* 41,740
300,000 43,321
474,300** 44,745

* Average death value
** Maximum claim value

[Statutory Authority: RCW 51.04.020, 51.16.035, and 51.32.073. 04-24-025, § 296-17-875, filed 11/23/04, effective 1/1/05. Statutory Authority: RCW 51.04.020, 51.16.035, 51.32.073, and 51.18.010. 03-24-066, § 296-17-875, filed 12/1/03, effective 1/1/04. Statutory Authority: RCW 51.16.035, 51.32.073, 51.18.010, and 51.04.020(1). 02-24-029, § 296-17-875, filed 11/27/02, effective 1/1/03. Statutory Authority: RCW 51.04.020, 51.16.035, 51.32.073, 51.18.010. 01-23-061, § 296-17-875, filed 11/20/01, effective 1/1/02; 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 04-24-025, filed 11/23/04, effective 1/1/05)

WAC 296-17-880   Table II.  

"B" and "W" Values
Effective January 1, ((2005)) 2006

Maximum Claim Value = $((428,100)) 474,300
Average Death Value = $((209,345)) 208,747

Expected Losses B W
((9,275 Under 80,774 0.00
9,276 - 18,689 79,966 0.01
18,690 - 28,243 79,159 0.02
28,244 - 37,943 78,351 0.03
37,944 - 47,790 77,543 0.04
47,791 - 57,789 76,735 0.05
57,790 - 67,945 75,928 0.06
67,946 - 78,260 75,120 0.07
78,261 - 88,739 74,312 0.08
88,740 - 99,386 73,504 0.09
99,387 - 110,205 72,697 0.10
110,206 - 121,202 71,889 0.11
121,203 - 132,381 71,081 0.12
132,382 - 143,747 70,273 0.13
143,748 - 155,305 69,466 0.14
155,306 - 167,060 68,658 0.15
167,061 - 179,017 67,850 0.16
179,018 - 191,183 67,042 0.17
191,184 - 203,564 66,235 0.18
203,565 - 216,165 65,427 0.19
216,166 - 228,992 64,619 0.20
228,993 - 242,053 63,811 0.21
242,054 - 255,354 63,004 0.22
255,355 - 268,903 62,196 0.23
268,904 - 282,707 61,388 0.24
282,708 - 296,773 60,581 0.25
296,774 - 311,109 59,773 0.26
311,110 - 325,725 58,965 0.27
325,726 - 340,628 58,157 0.28
340,629 - 355,828 57,350 0.29
355,829 - 371,334 56,542 0.30
371,335 - 387,156 55,734 0.31
387,157 - 403,305 54,926 0.32
403,306 - 419,791 54,119 0.33
419,792 - 436,625 53,311 0.34
436,626 - 453,820 52,503 0.35
453,821 - 471,386 51,695 0.36
471,387 - 489,338 50,888 0.37
489,339 - 507,689 50,080 0.38
507,690 - 526,453 49,272 0.39
526,454 - 545,644 48,464 0.40
545,645 - 565,278 47,657 0.41
565,279 - 585,371 46,849 0.42
585,372 - 605,941 46,041 0.43
605,942 - 627,004 45,233 0.44
627,005 - 648,580 44,426 0.45
648,581 - 670,689 43,618 0.46
670,690 - 693,351 42,810 0.47
693,352 - 716,588 42,002 0.48
716,589 - 740,424 41,195 0.49
740,425 - 764,881 40,387 0.50
764,882 - 789,987 39,579 0.51
789,988 - 815,767 38,772 0.52
815,768 - 842,251 37,964 0.53
842,252 - 869,469 37,156 0.54
869,470 - 897,452 36,348 0.55
897,453 - 926,235 35,541 0.56
926,236 - 955,852 34,733 0.57
955,853 - 986,343 33,925 0.58
986,344 - 1,017,746 33,117 0.59
1,017,747 - 1,050,106 32,310 0.60
1,050,107 - 1,083,468 31,502 0.61
1,083,469 - 1,117,880 30,694 0.62
1,117,881 - 1,153,393 29,886 0.63
1,153,394 - 1,190,063 29,079 0.64
1,190,064 - 1,227,949 28,271 0.65
1,227,950 - 1,267,114 27,463 0.66
1,267,115 - 1,307,624 26,655 0.67
1,307,625 - 1,349,553 25,848 0.68
1,349,554 - 1,392,976 25,040 0.69
1,392,977 - 1,437,978 24,232 0.70
1,437,979 - 1,484,648 23,424 0.71
1,484,649 - 1,533,082 22,617 0.72
1,533,083 - 1,583,383 21,809 0.73
1,583,384 - 1,635,664 21,001 0.74
1,635,665 - 1,690,046 20,194 0.75
1,690,047 - 1,746,661 19,386 0.76
1,746,662 - 1,805,650 18,578 0.77
1,805,651 - 1,867,168 17,770 0.78
1,867,169 - 1,931,385 16,963 0.79
1,931,386 - 1,998,484 16,155 0.80
1,998,485 - 2,068,667 15,347 0.81
2,068,668 - 2,142,153 14,539 0.82
2,142,154 - 2,219,184 13,732 0.83
2,219,185 - 2,300,027 12,924 0.84
2,300,028 - 2,384,974 12,116 0.85
2,384,975 - 2,474,349 11,308 0.86
2,474,350 - 2,568,512 10,501 0.87
2,568,513 - 2,667,861 9,693 0.88
2,667,862 - 2,772,841 8,885 0.89
2,772,842 - 2,883,949 8,077 0.90
2,883,950 - 3,001,741 7,270 0.91
3,001,742 - 3,126,846 6,462 0.92
3,126,847 - 3,259,969 5,654 0.93
3,259,970 - 3,401,913 4,846 0.94
3,401,914 - 3,553,591 4,039 0.95
3,553,592 - 3,716,046 3,231 0.96
3,716,047 - 3,890,474 2,423 0.97
3,890,475 - 4,078,257 1,615 0.98
4,078,258 - 4,280,999 808 0.99
4,281,000 Over 0 1.00))
10,276 Under 89,490 0.00
10,277 - 20,706 88,595 0.01
20,707 - 31,292 87,700 0.02
31,293 - 42,038 86,805 0.03
42,039 - 52,947 85,910 0.04
52,948 - 64,026 85,016 0.05
64,027 - 75,277 84,121 0.06
75,278 - 86,705 83,226 0.07
86,706 - 98,315 82,331 0.08
98,316 - 110,111 81,436 0.09
110,112 - 122,099 80,541 0.10
122,100 - 134,283 79,646 0.11
134,284 - 146,668 78,751 0.12
146,669 - 159,260 77,856 0.13
159,261 - 172,064 76,961 0.14
172,065 - 185,088 76,067 0.15
185,089 - 198,336 75,172 0.16
198,337 - 211,815 74,277 0.17
211,816 - 225,532 73,382 0.18
225,533 - 239,493 72,487 0.19
239,494 -