Current through Register Vol. 63, No. 9, September 1, 2024
The Plan Administrator shall establish a take-out credit
program. The take-out credit program shall operate in accordance with the
following guidelines:
(1) Each insurer
participating in the Plan who removes an employer insured through the Plan is
eligible for a take-out credit application against the premium used to
calculate the Plan participation base of the enrolled insurer. An insurer shall
contact the take-out credit administrator to enroll in the program. Any insurer
licensed in Oregon and writing workers' compensation insurance coverage is
eligible to enroll in the take-out credit program.
(2) An insurer may not receive credit for any
policy removed from the Plan within one calendar year after the insurer or its
affiliate wrote the policy in the voluntary market. An insurer who does not
enroll in the program cannot receive take-out credit.
(3) An insurer, other than the last voluntary
insurer of record, may remove a policy without any restriction on the length of
time the policy resided in the assigned risk market.
(4) For the purpose of the take-out credit
program, the requirements of this rule apply to an insurer's affiliates as well
as to the insurer.
(5) The kind and
amount of coverage to be offered a voluntary employer shall not be less than
those afforded by the policy being replaced unless the kinds and amounts of
coverage are refused by the employer.
(6) The granting of credits is subject to the
following provisions:
(a) An insurer who
removes an employer from the assigned risk market is eligible for a take-out
credit application equal to the annual premium from the voluntary policy times
a credit factor from the following schedule: Total Premium -- $5,000 or Less --
Total Premium -- Greater than $5,000:
(A)
First Year -- 3:1 -- 1:1;
(B)
Second Year -- 3:1 -- 1:1;
(C)
Third Year -- 3:1 -- 1:1.
(b) Credits received under this rule are not
subject to a maximum limit, except that the credits shall not reduce the
participation base of an insurer below zero.
(c) An insurer shall receive a credit against
the premium used to calculate its Plan participation base for the amount of
verifiable annual premium reported in its Exhibit of Premiums and Losses
(Statutory Page 14) of its Annual Statement for the respective calendar year.
The reported premium must be stated on the same financial basis as the premiums
that are reported for use in determining each insurer's Plan participation base
and are subject to subsequent adjustments and audits. The definition of "net
premiums written" in the Plan shall govern the description of premium used to
calculate the Plan participation base. As audit premiums, retrospective
adjustments and other items are developed, an insurer shall receive a credit
against its participation base for the amount of the premium adjustment in the
calendar year in which the adjustment is reported in the direct earned premium
for Oregon entry in the Annual Statement. Regardless of when an adjustment was
made or reported in the direct earned premium for Oregon entry, the adjustment
shall be allowed if related to the first, second or third year of voluntary
coverage by the insurer.
(d) If an
insurer keeps an employer out of the assigned risk market for three consecutive
years, the insurer shall receive credit for each of the three consecutive
years. If the insurer does not write the insurance for three years, it shall
receive credit only for the consecutive period of time that it covered the
employer in the voluntary market. An insurer shall not receive any credit for
an employer returned to the Plan within one calendar year of removal.
(e) An insurer must submit a request for
credit annually during the three year period in order to qualify for the
credit.
(f) Each year, the Plan
Administrator shall perform a systematic search of policies submitted as
voluntary that were previously assigned risk policies to determine their
eligibility for take-out credit.
(g) The Plan Administrator shall provide
enrolled insurers with a detailed Take-Out Credit Policy Report of eligible
policies. The Plan Administrator shall provide the Take-Out Credit Policy
Report to insurers in electronic format.
(h) Each insurer shall review and modify the
Take-Out Credit Policy Report to ensure all eligible policies are included in
the calculation of the credit.
(i)
The Plan Administrator shall review any modifications to the Take-Out Credit
Policy Report to ensure agreement. The Plan Administrator may eliminate any
policy that is inaccurately reported or those modifications that the Plan
Administrator cannot research for concurrence.
(j) Upon review and approval of the policies
on the Take-Out Credit Policy Report, the enrolled insurer need only send an
electronic reply of concurrence that indicates the official request of the
insurer to receive the credit.
(k)
The Plan Administrator shall grant credit only to enrolled insurers that
provide electronic concurrence with the Take-Out Credit Policy
Report.
Stat. Auth.: ORS
656.427,
656.730 &
731.244
Stats. Implemented: ORS
656.427,
656.730 &
737.265
