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Workers Compensation

LINE OF BUSINESS:

Workers Compensation
& Employers Liability

LINE(S) OF INSURANCE

CODES

 

 

Alternative Workers' Compensation

16.0001

 

 

Employers Liability

16.0002

Code:

16.0000

Excess Workers' Compensation

16.0003

 

 

Standard Workers Compensation

16.0004

 

 

 

 

REVIEW REQUIREMENTS

REFERENCE

DESCRIPTION OF REVIEWSTANDARDS REQUIREMENTS

LOCATION OF STANDARD IN FILING

GENERAL REQUIREMENTS
FOR ALL FILINGS

 

 

 

COVER LETTER   Cover letters may be attached to the Supporting Documentation Tab or the text entered under the Filing Description located under the General Information tab in SERFF  
EFFECTIVE DATE  

Policies effective at 12:01 AM Standard Time

Include proposed effective date on SERFF General Information
 

ELECTRONIC FILINGS  

Insurance Bulletin 360

Title 24-A § 2304-A Rate filings

Title 24-A § 2412 Filings, approval of forms

Maine requires that all rate and form filings be filed electronically through the NAIC’s System for Electronic Rate and Form Filings (SERFF).  See also Bureau of Insurance Bulletin 360 Electronic Submissions of Rate and Form Filings.

 
LINE OF AUTHORITY Workers’ Compensation

Must have requisite certificate of authority to transact business before submitting rate/rule/form filings

 

PARTICIPATING POLICIES

Title 24-A - §2382-A. Payment of dividends

Nothing in this Act prohibits or regulates the payment of dividends, savings or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members or subscribers, but in the payment of such dividends there may be no unfair discrimination between policyholders.

 
SIDE BY SIDE COMPARISON   Provide a marked-up copy of the existing rate/rule page(s) or form(s) being revised, highlighting all changes by underlining additions and striking through deletions.  
THIRD PARTY FILERS                          AUTHORITY

Title 24-A - §2412. Filing, approval of forms

Title 24-A - §2304-A. Rate filings
Must include authorization to communicate directly with third party filers  

WORKERS' COMPENSATION EXCESS INSURANCE

Title 39-A - §403(10 &11)

Rule Chapter 250 -- Eligibility Requirements to Self-Insure

Title 24-A - §4433. Exclusion from Guaranty Fund

Qualifications for Re-insurance.

Eligibility Requirements to Self-Insure

Contracts of workers' compensation excess insurance issued to workers' compensation self-insurers approved under former Title 39, section 23 or under Title 39-A, section 403 by any insurer after the effective date of this paragraph, or in the case of a contract that automatically renews, not later than one year after the effective date of this paragraph.

 

FORMS FILING REQUIREMENTS

 

 

 

ACCESS TO COURTS Title 24-A § 2433.  Jurisdiction of courts, limitation of actions Maine courts must have jurisdiction.  
ACTION AGAINST COMPANY Title 24-A § 2433.  Jurisdiction of courts, limitation of actions Insurer may not limit the period for bringing action against it to less than 2 years from the date the cause of action accrues.    
AMBIGUOUS & MISLEADING Title 24-A - §2413 Grounds for disapproval The Superintendent will disapprove forms that contain or incorporate by reference any inconsistent, ambiguous or misleading clauses.  
APPLICATIONS

Title 24-A - §2412. Filing, approval of forms

Title 24-A 2411 Representations in the application

Title 24-A 2186. Insurance fraud prevention

If the application is made part of the policy it must be filed for approval. 

All statements in an application are considered representations not warranties.

 

The Maine Fraud Warning must appear permanently affixed on all applications (i.e. new business, renewal, supplemental, etc.).
 

ARBITRATION

  Title 39-A - §314. Arbitration

Any workers' compensation claims reaching the hearing stage may go to arbitration if the parties agree in writing. Arbitration shall be in the county in which the injury occurred or elsewhere if the parties agree.

 

 
BLANK ENDORSEMENTS

Title 24-A § 2412 Filings, approval of forms

Title 24-A §2308 Excess rates
Blank endorsements are considered manuscript forms and generally not acceptable.  Each manuscripted change is subject to review and may be filed as a consent to form filing pursuant to 24-A § 2308(2).  
CANCELLATION

Title 24-A - §2908. Cancellation and nonrenewal


Title 39-A - §403(1). Insurance by assenting employer; requirements as to self-insurers

Notice of cancellation must be in writing and given to the insured and to the Maine Workers' Compensation Board at least 30 days in advance. The effective date and the reason for cancellation must be stated on the notice.

If the insured has obtained another workers' compensation insurance policy and that policy becomes effective prior to the expiration of the 30 day notice period, the cancellation takes effect on the effective date of the other insurance policy.
 

CANCELLATION, PERMISSIBLE REASONS FOR

Title 24-A - §2908.. Cancellation and Non-Renewall

An insurance contract may only be cancelled by an insurer prior to the expiration of the policy for one or more of the following grounds:

  • Nonpayment of premium
  • Fraud or material misrepresentation
  • Substantial change in the risk which increases the risk of loss
  • Failure to comply with reasonable loss control recommendations
  • Substantial breach of contractual duties, conditions or warranties
  • The Superintendent determines that continuation of a class or block of business will jeopardize a company's solvency or will place the insurer in violation of the insurance laws.

 

CONTENT OF POLICIES Title 24-A - §2901. Contracts subject to general provisions Workers Compensation contracts are subject to provisions of Title 24-A Chapters 27, 39 and Title 39-A.  
FICTITIOUS GROUPS Title 24-A § 2172.  Fictitious groups prohibited Prohibited  

FRAUD WARNING

Title 24-A - §2186. Insurance fraud prevention

Statutory (or substantially similar) wording must be included on all applications (i.e., new business, renewal, supplemental, etc.) and claim forms.

 
NON-COOPERATION WITH PREMIUM AUDIT ENDORSEMENT   The Bureau will consider up to 2 times (200%) the estimated rating basis.  

NON-RENEWAL

Title 24-A - §2908. Cancellation and Non-Renewal

Notice of Non-renewal must be in writing and be given to the insured at least 30 days in advance. If notice is provided and the insurer extends the policy for 90 days or less, an additional notice of non-renewal is not required.

 

NON-RENEWAL, PERMISSIBLE REASONS FOR

Title 24-A - §2908. Cancellation and nonrenewal

There are no restrictions listed for reasons for non-renewing a policy.

 

PAYMENT OF TIME LOSS PERIOD

Title 39-A - §205. Benefit payment

The first payment of compensation for incapacity under Title 39-A, Section 212 or 213 is due and payable within 14 days after the employer has notice or knowledge of the injury or death, on which date all compensation then accrued must be paid. Subsequent incapacity payments must be made weekly and in a timely fashion. Reports shall be furnished to the Maine Workers' Compensation Board as required.

 

PRIOR APPROVAL

Title 24-A § 2304-A Rate filings

Title 24-A § 2412 Filings, approval of forms

Filings must be made no less than 30 days in advance of their stated effective/delivery date.  The Bureau will act upon filings within 30 days unless the filer requests an extension.  Filings not acted upon pursuant to these statutes may be deemed approved after 30 days.

 

PRIVACY NOTICE

Title 24-A - §2206. Notice of insurance information practices

See Title 24-A, Ch. 24 generally for insurance information and privacy protection.

 
REBATES

Title 24-A - §2162. Unfair discrimination, rebates prohibited -- property, casualty, surety insurance

Title 24-A §2163. Receipt of rebate, illegal inducement prohibited

Insurance Bulletin 233

Insurance Bulletin 384
Inducements prohibited unless contained in policy.  The benefit must be associated with indemnification or loss.  

SIGNATURES

Title 24-A - §2416. Execution of policies

Every insurance policy shall be executed in the name of and on behalf of the insurer by its officer, attorney in fact, employee, or representative duly authorized by the insurer. A facsimile signature of any such executing individual may be used in lieu of an original signature.

 
VOIDANCE Title 24-A §2411 Representations in applications Insurers may not void coverage for concealment, misrepresentation or fraud except in compliance with Maine case law.  See American Home Assurance Co. v. Ingeneri, 479 A.2d 897 (Me. 1984).  
WARRANTIES Title 24-A §2411 Representations in applications Statements in applications are representations, not warranties.  

RATE AND RULE FILING REQUIREMENTS

 

 

 

"A" RATED RISKS Title 24-A - §2304-A. Rate filings “A” rates and ranges must be filed along with any rates designated as “refer to company” or similar phrasing.  

ADOPTION OF LOSS COSTS WITH DIFFERENT EFFECTIVE DATE, DELAYING ADOPTION OF ADVISORY LOSS COST, MODIFYING ADVISORY LOSS COSTS, NOT ADOPTING ADVISORY LOSS COSTS

Title 24-A - §2321-E. Filing of prospective loss costs and supplemental information


Insurance - Bulletin 241

If an insurer that has filed to have its loss cost adjustments remain on file with the Bureau intends to delay, modify, or not adopt particular advisory organization's Reference Filing, the insurer must make a filing with the Bureau.

The insurer's filed loss cost adjustments will remain in effect until the insurer withdraws them or files and receives approval of a revised Reference Filing Adoption Form.
 

ADOPTIONS OF RATE SERVICE ORGANIZATIONS (RSO) FILINGS OR FILINGS OF ANOTHER INSURER

Title 24-A - §2304-B. Reference filings

Title 24-A - §2382-C. Filing of rates and other rating information; filing of forms

Insurer may satisfy rate filing requirements by adopting advisory organization filings and filing loss cost multipliers.

 

APPORTIONMENT OF PREMIUM

Rule Chapter 550 Apportionment of Premium

If the policy also covers risks other than Maine exposure, its premium shall be calculated as follows: all Maine exposure must be accurately measured and subject to a separately itemized charge calculated on the basis of the Maine rate. The remainder of the premium must be calculated in a manner that is reasonably designed to reflect the employer’s exposure under the worker's compensation laws of other states.

 

CATASTROPHE HAZARDS

Title 24-A - §2304-A. Rate filings

Title 24-A - § 2382. Rate Standards

Rate provisions must be supported by experience or relevant catastrophe models.

 

CLASSIFICATION SYSTEM

Title 24-A - §2382-B. Uniform Administration of Classifications

Every workers' compensation insurer, including self-insurers, shall adhere to a uniform classification system. This system is filed with the Superintendent by an advisory organization designated by the superintendent and is subject to the Superintendent's disapproval.
An insurer may develop sub-classifications and rates may be made for the sub-classifications. Any sub-classifications must be filed with the Superintendent 30 days prior to their use. Sub-classifications shall be disapproved if the insurer fails to demonstrate that data can be produced and reported consistently in accordance with the Uniform Statistical Plan and the classification system. The proposed classification shall also be disapproved if it:

  1. Is not reasonably related to the exposure to claim;
  2. Is not adequately defined;
  3. Has not been shown to distinguish among insureds based on the potential for or hazard of loss; or
  4. Is or will be unfairly discriminatory
 
CONSENT TO RATE Title 24-A - §2308. Excess rates

A rate in excess of that provided by a filing may be used on any specific risk, providing that the following requirements are satisfied:

  • The insurer files a written application with the superintendent signed by the insured or applicant stating the reasons for the request.
  • The superintendent assents to the use of an excess rate for the specific risk.
 

DEDUCTIBLES

Title 24-A - §2385. Optional deductibles

Title 24-A - §2385-A. Medical expense deductibles

Insurance - Bulletin 198

Indemnity deductibles must be available for indemnity benefits in amounts of $1,000 and $5,000 per claim and in other reasonable amounts as may be approved by the superintendent.
Claims must first be paid by the insurer and then reimbursed by the employer up to the limit of the deductible.
An insurer is not required to offer a deductible to an employer if, as a result of a credit investigation, the insurer determines that the employee is not sufficiently financially stable to be responsible for the payment of deductible amounts.
Insurers shall offer deductibles for medical expenses as follows:

  • $250 per occurrence to employers who are not experience rated.
  • Either $250 or $500 per occurrence to employers who are experience rated.
  • $500 to employers with estimated premium of over 500% of the premium to qualify for experience rating and with 10 or more employees (except for those employers in logging, lumbering and sawmills).
 

DISAPPROVAL OF RATES, GROUNDS FOR

Title 24-A - §2382-E. Disapproval of rates

Title 24-A - §3714. Accounting; assessments

Rates in the voluntary market shall be disapproved if they are inadequate or unfairly discriminatory. Rates in the residual market shall be disapproved if they are excessive, inadequate or unfairly discriminatory.

Rates may be disapproved at any time if they are not in compliance with Title 24-A.

 

DIVIDENDS

Title 24-A - §2382-A. Payment of dividends

Payment of dividends is neither prohibited nor regulated except that dividend payments may not be unfairly discriminatory between policyholders.

 

EXPENSE MODIFICATION PLAN

Insurance Bulletin-233

Must be filed as part of rating plan.  Rate credits resulting from a negotiated/reduced commission are limited to no greater than 10% (see Bulletin 233).  

EXPENSES

Title 24-A - §2382. Rate standards

Rate or loss cost multiplier calculation should reflect expenses of insurer.

 

EXPERIENCE RATING

Title 24-A - §2382-B. Uniform administration of classifications; reporting of rating and other information; membership in advisory organization

Title 24-A - §2382-D. Uniform experience rating plan; merit rating plan

The designated workers' compensation and advisory organization shall file with the superintendent uniform experience rating plans and rules to provide premium adjustments based on the past claim experience of an insured employer. The experience rating plan must provide that the claims experience for the 3 most recent years for which data is available be considered on the following bases:

  • The claims and exposure for the most recent year for which data is available must be given 40% weight.
  • The claims and exposure for the 2nd most recent year for which data is available must be given 35% weight.
  • The claims and exposure for the 3rd most recent year for which data is available must be given 25% weight.

If data is available for only 2 years of experience, the weighting must be:

  • 60% for the most recent year
  • 40% for the 2nd most recent year.
 

LARGE DEDUCTIBLES

Title 24-A - §2392. Definitions

A large deductible policy is a workers' compensation policy written with a per occurrence deductible in excess of $5,000 or a medical deductible in excess of $500.

Claims must first be paid by the insurer and then reimbursed by the employer up to the limit of the deductible.
 

LOSS COST MULTIPLIERS

Title 24-A - §2304-B. Reference filings

Insurer may satisfy rate filing requirements by adopting advisory organization filings and filing loss cost multipliers.

 

MERIT RATING

Title 24-A - §2382. Uniform experience rating plan; merit rating plan

If an insured is not eligible for the experience rating plan, a merit rating plan must be applied using the following guidelines. A plan must provide for the following credits or debits to be applied to the otherwise applicable manual premium, based on the number of lost-time claims of the insured during the most recent 3-year period for which statistics are available:

  • No claims or a loss ratio of less than 1.0, an 8% credit;
  • One claim resulting in a loss ratio greater than 1.0, no credit or debit; and
  • Two or more claims resulting in a loss ratio greater than 1.0, an 8% debit.

The insurer shall notify the insured of the premium adjustment and the reason for the adjustment.

 

MINIMUM PREMIUM RULES

Title 24-A - §2304-A.Rate filings

Insurance - Bulletin 241

Must be filed as part of rating plan.

 

OTHER FEES ASSOCIATED WITH THE ISSUANCE OF A POLICY, DELIVERY OF A POLICY OR COLLECTION OF PREMIUM

Title 24-A, §2304-A: Rate filings

Title 24-A, §2403: "Premium" defined

Must be filed as part of rating plan.

 

PAYMENT PLANS

Title 24-A, §2304-A: Rate filings

Title 24-A, §2403: "Premium" defined

Must be filed as part of rating plan.

 

PREMIUM AUDIT

Rule Chapter 470 - Premium Audit

If the insurer has not established the final premium 120 days after the policy period ends, the insurer is prohibited from billing or collecting any additional premium exceeding the latest billed premium immediately prior to the 120-day time limit. However, if the insurer has failed to perform a final premium audit within the 120-day time limit, the insured, upon written request to the insurer, is entitled to a final premium audit for the purpose of determining if the insured has been overcharged.

If the carrier is unable to examine and audit the records of the insured that relate to the calculation of the final premium and the inability is solely due to the failure of the insured to cooperate in the audit, then the 120-day limitation shall begin when the carrier is able to complete the examination and audit of the insured's records. The insurer must notify the insured in writing prior to 120 days from the end of the policy period of the reasons for the inability to establish the final premium.
 

PRE-PAYMENT OF PREMIUM

Title 39-A - §402. Prepayment of premium

An insurance company that issues workers' compensation insurance policies may not require prepayment of premium more than ¼ year in advance.

 

PROFIT LOADING

Title 24-A - §2304-B. Reference filings

Title 24-A - §2382. Rate standards

Rate or loss cost multiplier calculation may reflect profit loading and must include consideration for investment income.

 
RATE RANGES

Title 24-A - §2304-A. Rate filings

Title 24-A - §3714(2).
Must be filed as part of rating plan.  

RATING TIERS

Title 24-A - §2304-A. Rate filings

Title 24-A - 2382-C

Insurance - Bulletin 277

Must be filed as part of rating plan.

 

REBATE

Title 24-A - §2162(1). Unfair discrimination, rebates prohibited -- property, casualty, surety insurance

Insurance Bulletin 384

No property, casualty or surety insurer or any employee or representative thereof, and no broker, agent or solicitor as to such insurance shall pay, allow or give, or offer to pay, allow or give, directly or indirectly, as an inducement to insurance, or after insurance has been effected, any rebate, discount, abatement, credit or reduction of the premium named in a policy of insurance, or any special favor or advantage in the dividends or other benefits to accrue thereon, or any valuable consideration or inducement whatever, not specified or provided for in the policy, except to the extent provided for in an applicable filing with the superintendent as provided by law.

 

RETROSPECTIVE RATING

Title 24-A - §2382. Uniform experience rating plan; merit rating plan

Must be filed as part of rating plan.

 

RETURN ON EQUITY/INVESTMENT INCOME

Title 24-A - §2382. Rate standards

Profit must give consideration to investment income.

Manual rates, minimum premium, class rate, rating schedule or rating plan, every other rating rule, and every modification to the foregoing should be filed and supported.
 

SCHEDULE RATING (AKA UNDERWRITING JUDGEMENT)

Title 24-A - §2382. Rate standards

Must be filed as part of rating plan and a maximum aggregate credit/debit permitted is 25%

 

SERVICE CHARGES (COLLECTION EXPENSE SUCH AS, BUT NOT LIMITED TO, INSTALLMENT, NSF, REINSTATEMENT, LATE & CONVENIENCE FEES)

Title 24-A - §2174(2). Illegal dealing in premiums; excess charges for insurance

Title 24-A, §2304-A: Rate filings

Title 24-A, §2403: "Premium" defined

Bulletin 383

No person shall willfully collect as premium or charge for insurance any sum in excess of the premium or charge applicable to such insurance, and as specified in the policy, in accordance with the applicable classifications and rates as filed with and approved by the superintendent.

 

Last Updated: December 5, 2013