Mo. Code Regs. tit. 20 § 500-6.600

Current through Register Vol. 49, No. 23, December 2, 2024

Section 20 CSR 500-6.600 - Effective Date of Experience Rating Modification

PURPOSE: This rule sets standards for the use of experience rating modification and other similar modifications applicable to Workers' Compensation insurance policies.

(1) An insurer shall not implement an increase in premiums through the application of an experience rating modification factor, assigned risk adjustment program (ARAP) factor, or other surcharge authorized by the Department of Insurance after the effective date of the policy (or at the anniversary date of the policy, if different), unless the insured is issued an endorsement describing the potential of the pending increase when the policy is issued.

(2) An insurer shall not apply an increase specified in section (1) of this rule retroactively.

(3) Any factor or other surcharge specified in section (1) applied after the policy effective date (or anniversary rating date, if different) which increases premiums shall not become effective until sixty (60) days after the date the insurer provides written notification to the insured of the increase.

(4) Any modification of a type specified in section (1) of this rule but which results in a premium reduction shall not be subject to the restrictions in sections (2) and (3) and shall be retroactive to the policy inception date.

(5) For the purposes of the rates filed in compliance with section 287.320, RSMo, it shall be considered unreasonable and inadequate to develop rates based on data which excludes premiums that would have been collected except for the restrictions set forth in this rule. Actuarial estimates would be acceptable to demonstrate the impact of this rule.

(6) Sections (2) and (3) shall not apply when any delay in the application of the modification factor increase or surcharge increase is due to the policyholder's failure in providing necessary data for the development of the factor or surcharge, provided that requests for data are timely and adequately documented.

(7) This rule is applicable only to portions of an insurance policy which provide coverage for risks principally localized in Missouri.

20 CSR 500-6.600

AUTHORITY: sections 287.320, RSMo Supp. 1992 and 374.045, RSMo 1986.* This rule was previously filed as 4 CSR 190-18.070. Original rule filed Dec. 1, 1989, effective May 1, 1990. Amended: Filed Nov. 14, 1991, effective June 25, 1992.

*Original authority: 287.320, RSMo 1939, amended 1982, 1992 and 374.045, RSMo 1967.