Or. Admin. Code § 836-043-0076

Current through Register Vol. 63, No. 12, December 1, 2024

Section 836-043-0076 - Takeout Credit

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.

Or. Admin. Code § 836-043-0076

ID 10-1996, f. 6-27-96, cert. ef. 7-1-96; Administrative Reformatting 1-15-98; ID 18-2008, f. 12-9-08, cert. ef. 1-1-09

Stat. Auth.: ORS 656.427, 656.730 & 731.244

Stats. Implemented: ORS 656.427, 656.730 & 737.265