Table Of Content

MontanaStateLibrary 3 0864 1005 1876 3 dATE COMPENSATION INSURANCE FUND FUND POLICY SERVICES UNDERWRITING MANUAL STATt DOCUMENTS COLLECTION FEB 1 5 1395 MONTANA STATE LIBRARY ",.E.L,EN'A5,15MEO.N6TtAhNAAVE-.SC20 JULY 1, 1993 EDITION :, . 2111 STATE FUND UNDERWRITING MANUAL JULY 1993 1, TABLEOFCONTENTS GENERALRULES GENERAL I. A. Underwriting r.1 B. EffectiveDates R.1 II. DEFINITIONS A. Workers'CompensationandOccupationalDisease R- B. StateCompensationInsuranceFund(StateFund) R- C. Employer/Insured R- D. Risk R- E. PrincipalBusiness R-2 F. SecondaryBusiness R-2 G. PendingEffectiveDate R-2 H. InitialDeposit R-2 I. PolicyPeriod R-2 J. ReportBasis R-2 K. FiscalYear R-2 L. AnniversaryDate R-3 M. AnniversaryRatingDate R-3 N. ClassificationCode R-3 O. Payroll R-3 P. Premium R-3 Q. ClaimLiability R-3 R. PolicyMargin R-3 S. PolicyLossRatio R-3 III. LIMITSOF LIABILITY A. EntireLiabilityUnderWorkers'Compensation andOccupationalDiseaseActs R-3 B. DefenseLimits R-3 C. Employer'sLiabilityNotIncluded R-3 IV. INITIALDEPOSIT A. DefinitionandPurpose R-4 B. PaymentEstablishesCoverageEffectiveDate R-4 C. PaymentMethods R-4 D. PaymentWithDishonoredCheck R-4 E. HeldUntilPolicyCancellation R-4 V. COVERAGES A. CoveredEmployments R-5 B. ExemptedEmploymentsandCorporateOfficers R-5 C. Assignment/Death R-6 VI. POLICYFORMS A. Application R-6 B. Policy R-6 C. InitialDepositStatement R-7 STATE FUND UNDERWRITING MANUAL JULY 1993 1, D. CoverageDeclarations R-7 E. ClassificationandCodeSchedule R-7 F. Endorsements R-7 G. ApplicationandSurvey R-7 H. Payroll&PremiumReports R-7 VII. CLASSIFICATIONPROCEDURE A. GeneralExplanation R-7 B. BasicClassifications R-8 C. GoverningClassification R-8 D. StandardExceptions R-8 E. GeneralInclusions R-9 F. GeneralExclusions R-10 G. AssignmentofClassifications R-10 H. PayrollAssignment-MultipleClassifications R-11 I. ClassificationWording R-12 VIII. BASISOFPREMIUM A. Computation R-13 B. Payroll, RemunerationorEarnings R-13 C. EstimatedPayrolls R-15 D. Overtime R-15 E. CorporateOfficers R-15 F. OwnersandPartners R-16 G. PayrollDivision R-16 H. UninsuredSubcontractor R-17 IX. RATESANDPREMIUM A. ManualRate R-17 B. ManualPremium R-18 C. ModifedManualPremium(MedicalDeductible) R-18 D. StandardPremium(ExperienceModification) R-19 E. ModifiedStandardPremium(ConstructionIndustryCreditand ScheduledRating) R-20 F. EarnedPremium R-21 G. MinimumPremium R-21 H. FinalPremium R-21 I. Audit R-21 X. DIVIDENDS A. BasedonLossExperience R-21 B. PremiumExcess R-22 XI. CANCELLATION A. CeasedOperations R-22 B. TransferCoveragetoAnotherCarrier R-22 C. NoEmployeesForWhichCoverageIsRequired R-22 D. ChangeofOwnershiporSaleofBusiness R-23 E. Forced R-23 55 STATE FUND UNDERWRITING MANUAL JULY1, 1993 INDEX AircraftOperation R-10,R-17 AircraftTravel R-9 "All" R-12 AnniversaryDate R-3 AnniversaryRatingDate R-3 Audit R-21 B BasicClassifications R-8,R-10 BasisofPremium R-13 Binder R-5, R-6 Bonuses R-13 C CafeteriaPlans R-13 Cancellation R-22 ChainSaws R-14 ChauffeursandHelpers R-8, R-12 ClassificationAssignment R-10 ClassificationEffectiveDate R-1 ClassificationHeadings R-12 ClassificationNotes R-12 ClassificationProcedure R-7 ClassificationWording R-12 ClericalOfficeEmployees R-8,R-12 Collectors R-9,R-12 CombinedEntities(forexperiencemodification-StandardPremium) R-19 Commissaries R-9, R-10 Commissions R-13 Construction R-9, R-10, R-11,R-17 Construction IndustryCredit(ModifiedStandardPremium) R-20 ContainerManufacturing R-9 Corporation R-1, R-1 CorporateOfficers R-5,R-1 CoverageEffectiveDate R-4 Credits(asearnings) R-13 D DayCare(EmployerOperated) R-10 DeferredCompensationPlans R-13 DefenseLimits R-3 Definitions R-1 Deposit, Initial R-2,R-4 » DifferentialPay(forotherthandayshift) R-15 Discount,Volume(EarnedPremium) R-21 STATE FUND UNDERWRITING MANUAL JULY 1993 1, DismissalPay R-13 Dividends R-21 DivisibleClassificationCodes R-17 DivisionofPayroll R-16 DraftingEmployees R-8, R-12 DriversandHelpers R-8, R-12 E EarnedPremium R-3, R-21 Earnings R-13 EffectiveDateofCoverage R-4 EffectiveDateofRules,ClassificationsandRates R-1 Election(CoveredEmployments) R-5 Election(ExemptedEmployments) R-5 EmployeeExpenses R-14 Employer R-1 Employer'sLiability R-3 Equipment R-14 Erection R-9, R-10,R-11, R-17 EstimatedPayroll R-15 ExperienceModification(StandardPremium) R-19 ExperienceTransfer R-19 F FinalPremium R-21 FiscalYear R-2 G GeneralExclusions R-10 GeneralInclusions R-9 GoverningClassification R-8 Gratuities R-13 H HeavyEquipment R-14 HolidayPay R-13 Hospitals R-9 Housing(asearnings) R-13 IncentivePlans R-13 "Includes" R-12 InitialDeposit R-2, R-4 InsurancePlans R-13 Insured R-1 InterchangeofLabor R-11 STATE FUND UNDERWRITING MANUAL JULY1, 1993 L - LimitsofLiability R-3 Lithographing R-9 Lodging R-13,R-14 LumberingBusiness R-10 M MaintenanceofInsured'sBuildingsorEquipment R-9 ManualPremium R-3,R-18 ManualRate R-1,R-17 Meals R-13,R-14 MedicalDeductible(ModifiedManualPremium) R-18 MedicalFacilities R-9 MercantileBusiness R-11,R-12 Merchandise(asearnings) R-13 Messengers R-9,R-12 Mileage R-14 MinimumPremium R-3,R-21 MiningBusiness R-10,R-12 MiscellaneousEmployees R-11 ModifiedPremium R-3,R-18,R-20 MultipleClassifications R-11 N NewConstructionorAlteration R-10 "No"or"Not" R-12 "NOC"(NotOtherwiseClassified) R-12 O "Or" R-12 Overtime R-13, R-15 Owner R-16 OwnershipChange R-19,R-23 P Partner/Partnership R-16 Payroll R-3,R-13 PayrollDivision R-16 Payroll,Estimated R-15 PendingEffectiveDate R-2 PensionPlans R-13 PassengerVehicle R-14 Piecework R-13 PolicyPeriod R-2 Premium, Basisof R-13 PremiumDiscount(forvolume-EarnedPremium) R-21 PremiumPay(forotherthandayshift) R-15 PrincipalBusiness R-2,R-10,R-11 STATE FUND UNDERWRITING MANUAL JULY 1993 1, Printing R-9 ProfitSharing R-13 R RateCategory(ManualRate) R-17 Rates R-1.R-17 Rejection(CorporateOfficers) R-5 Remuneration R-13 Rent(asearnings) R-13 RepairofInsured'sBuildingsorEquipment R-9 ReportBasis R-2 Restaurants R-9, R-10 RetirementPlans R-13 RewardsforInventionorDiscovery R-13 Risk R-2 S Salary R-13 Salespersons R-9, R-12 SawmillOperations R-10 ScheduledRating(ModifiedStandardPremium) R-20 SecondaryBusiness R-2, R-10, R-11,R-17 SeverancePay R-13 ShiftDifferential(forotherthandayshift) R-15 SickLeaveBenefitsAccrued R-13, R-14 SickPay R-13 SoleProprietor R-16 StandardExceptions R-8 StandardPremium R-3, R-19 StoreCertificates(asearnings) R-13 Subcontractors(Uninsured) R-17 SubstitutesforMoney R-13 T TimberFallingExpenses R-14 Tips R-13 "ToBeSeparatelyRated" R-12 TruckingasaSecondaryBusiness R-11,R-17 Trucks R-14 V VacationBenefitsAccrued R-13, R-14 VacationPay R-13 VehiclesUnderContract R-8 VolumeDiscount(EarnedPremium) R-21 W Wages R-13 : .... ) 1 STATE FUND UNDERWRITING MANUAL R - July1, 1993 GENERAL RULES GENERAL A. Underwriting 1 This manual ofrules, classificationsand ratesgovernsthe underwritingof workers' compensationand occupationaldisease insurancebytheMontana State Compensation Insurance Fund(State Fund). 2. Thegeneral rulesapplytoand controlthewriting ofall State Fund policies. B. Effective Dates 1 Rulesand rates inthis manual becomeeffectiveat 12:01 a.m. onthedate specified onthe manual pages andsupercede all previous rulesand rates. 2. Changes in anyruleswill bedesignated byan asterisk(*). 3. Changes inclassificationssubsequentto May7, 1993: effectiveonthe date specifiedwhenthechange isapproved bythe StateFund Boardof Directors as indicated byafootnotedesignated byoneormoreasterisks. DEFINITIONS A. Workers' Compensationand Occupational Disease: The statutoryobliga- tion ofan employertoprovidebenefitsforemployees undertheMontana Workers' Compensation and Occupational DiseaseActs(Title39, Chapter71, MCAandTitle39, Chapter72, MCA). » B. StateCompensation Insurance Fund (State Fund) 1 Astateoperatedworkers' compensation andoccupationaldisease insurer. 2. Alsoknownas Compensation Plan3 underthe MontanaWorkers' Compen- sation andOccupational DiseaseActs. C. Employer/Insured 1 Asingle legal entity, asfurtherdefined in 39-71-117(1 MCA, which maybe an individual, partnership, privateorpubliccorporation,: association,joint ventureorotherentity. 2. Theentireoperationofeach separate legal entityshall becovered bya singlepolicy. 3. Apolicyshall notbe issuedto coveronlya portionofthe employer'sopera- tionoremployees. . STATE FUND UNDERWRITING MANUAL July1, 1993 D. Risk: Theentireoperationofoneemployer. E. Principal Business: Thebusinesswiththegreatestamountofpayroll, exclud- ingstandardexception orgeneral exclusion operations. F. Secondary Business: Anundertakingorenterpriseseparatefromtheprinci- pal businessofthe insured. G. Pending Effective Date: Aconditional policyeffectivedatedetermined bythe date State Fund receives anapprovedapplicationand all payroll reportsand premiumsfrom anypreviouscoverageperiods. H. Initial Deposit: Anamount, requiredtosecurefuturepremium payment, as furtherdefined in Rule IV. Policy Period: I. 1 The effectivedate isestablishedonthedate anapprovedapplication, all reportsand premiumsfrom anypreviouscoverageperiodsand an initial deposithavebeen received. 2. Policies remain ineffectcontinuouslyuntil cancelled (see RuleXI). Policy renewal isnotrequired. J. Report Basis: Timeperiodsassignedforeachemployertoreportemployee earningsforpremium purposes: 1. Monthly 2. Quarterly- January 1 - March 31 April 1 - June30 July 1 - September30 October 1 - December31 3. SemiAnnual - January 1 - June30 July 1 - December31 K. FiscalYear: A 12-month period beginningJuly 1stand endingthefollowing June30th.