Section R20-5-1119. Retrospective-Rating Plan; Formula; Eligibility; Necessary Information for Plan

A.      The Division shall calculate the net taxable premium under a retrospective-rating plan as follows: [(payroll multiplied by the applicable worker’s compensation rate multiplied by the experience modification rate multiplied by the basic premium factor) added to (losses for the current year plus adjusted losses from the previous year) multiplied by (the loss conver- sion factor)] multiplied by the tax multiplier. The net taxable premium is subject to a maximum and minimum premium level.

B.       A self-insurer may use the retrospective-rating plan if:

1.        The   self-insurer  has  an   annual  net  taxable  premium exceeding $100,000; and

2.        The Division calculates the experience modification rate as follows:

a.        In the first year of self-insurance, the experience modification rate is 1.0;

b.        In the second and third years of self-insurance, the Division calculates the experience modification rate based upon the loss data accumulated by the self- insurer during its term of self-insurance; and

c.        In the fourth year of self-insurance and all following years, the Division calculates the experience modifi-

cation rate based upon the most recent three years of loss data provided on the Self-insured Injury Report, excluding the most recent year. The Division shall use the most recent year’s data to calculate the actual premium tax.

C.      A self-insurer shall provide the following information in sup- port of the retrospective-rating plan:

1.        Self-insurer’s Payroll Report;

2.        Self-insurer’s Medical Report;

3.        Self-insurer’s Injury Report; and

4.        Self-insurer’s Quarterly Tax Payment form.

Historical Note

New Section made by final rulemaking at 11 A.A.R.

1008, effective April 4, 2005 (Supp. 05-1).