OAR 836-042-0210: Rating Plans for which Employers May Be Combined; Retrospective Rating Deposit Required; When Group Rating May Be Applied

(1) An insurer may use the combined experience of a group of employers for experience rating, retrospective rating, or premium discounting of workers’ compensation insurance premiums for the employers in the group. An insurer may also apply other factors approved by the Insurance Commissioner which are not adequately reflected in experience rating, retrospective rating, or premium discounting and which satisfy the requirements of section (6) of this rule. (2) If the combined experience of a group of employers is used for experience rating, a modification factor to supplement the modification factors of individual employers shall be calculated and distributed by a licensed rating organization according to the Experience Rating Plan of the National Council on Compensation Insurance filed with the Insurance Commissioner. Limitations or other data adjustments shall be applied only to the experience data of individual group members. The rating organization shall provide such service to an insurer upon request and may charge a reasonable fee. (3) The premiums of a group of employers may be combined for premium discounting if the group can reasonably justify the combination by showing savings in acquisition, premium collection, policy issuance or other insurance administrative expenses or insurance services provided by an organization of which employers in the group are members. (4) The premiums of a group of employers may be combined for retrospective rating either to enhance volume and reduce insurance charges or to realize expense savings as would be allowed for premium discounting. (5) Rating modifications based on the combined experience of a group of employers shall apply to individual members of the group as of the individual member’s first anniversary rating date on or after the group anniversary rating date. (6) An insurer may file a group rating plan for applying factors not adequately recognized and reflected by experience rating, retrospective rating, or premium discounting. The effective date of a proposed plan shall be the date specified in the filing, but not sooner than 30 days after the filing is received by the Insurance Commissioner. The Commissioner may approve an earlier effective date not preceding the date the filing was received. If, within the 30-day period, the Commissioner finds the proposal does not meet the standards and requirements of ORS Chapter 737 and this section, the Commissioner shall notify the insurer that the proposal has been disapproved, stating the basis for such action, and the proposal shall not become effective. If, following the 30-day period, the commissioner finds the proposal does not satisfy the requirements and standards of ORS Chapter 737, the commissioner may proceed according to ORS 737.336(2), 737.215, and 737.045 to disapprove the plan. The Commissioner shall not approve a plan for applying rating factors unless: (a) All factors can be objectively evaluated and are consistently and uniformly applied and evidence thereof maintained by the insurer; (b) Premium modifications for each factor are supported by actuarial evidence; (c) The insurer captures and maintains statistical data demonstrating the rating equity of applying premium modifications; and (d) The application of a rating factor does not inappropriately duplicate the recognition of experience used in other rating factors.