TITLE 13 INSURANCE
CHAPTER 17 WORKERS’ COMPENSATION INSURANCE
PART 6 PREMIUM ADJUSTMENT PROGRAM
13.17.6.1 ISSUING AGENCY: New Mexico Public Regulation Commission,
Insurance Division.
[7-1-97;
13.17.6.1 NMAC – Rn & A, 13 NMAC 17.6.1, 5-15-01]
13.17.6.2 SCOPE: This rule authorizes
premium credits for workers' compensation and employer's liability insurance as
defined in NMSA 1978 Section 59A-7-6A(3) for those employers utilizing certain
qualifying classifications. The premium
credit calculation in this rule shall apply to new or renewal qualifying
policies effective on and after July 1, 1992.
[4-1-92; 13.17.6.2 NMAC – Rn
& A, 13 NMAC 17.6.2, 5-15-01]
13.17.6.3 STATUTORY AUTHORITY: NMSA 1978 Sections 59A-2-9, 59A-3-6, and 59A-17-5.
[4-1-92; 13.17.6.3 NMAC – Rn,
13 NMAC 17.6.3, 5-15-01]
13.17.6.4 DURATION: Permanent.
[7-1-97;
13.17.6.4 NMAC – Rn, 13 NMAC 17.6.4, 5-15-01]
13.17.6.5 EFFECTIVE DATE: April 1, 1992, unless a later date is cited
at the end of a section.
[4-1-92,
7-1-97; 13.17.6.5 NMAC – Rn & A, 13 NMAC 17.6.5, 5-15-01]
13.17.6.6 OBJECTIVE: The
purpose of this rule is to implement NMSA 1978 Section 59A-17-8C directing the
Superintendent of Insurance to equalize and calculate workers' compensation
premium rates on a basis that does not discriminate against or penalize
employers who pay higher wages than other employers to workers in the same job
classification. The legislative
objective is satisfied by retaining the present payroll-based system modified
by the application of progressively greater premium credits to progressively
higher hourly wages on policies for qualifying classifications. [4-1-92; 13.17.6.6 NMAC – Rn & A, 13 NMAC 17.6.6,
5-15-01]
13.17.6.7 DEFINITIONS: In addition to the definitions
in the Workers' Compensation Act, NMSA 1978 Sections 52-1-1
et seq., as used in this rule:
A. aggregate
call for experience means the requests by the WCSO to workers' compensation
carriers for summaries of payroll, premium or loss experience data;
B. ARAP
calculations means the Assigned Risk Adjustment Program approved by
the Superintendent pursuant to NMSA 1978 Section 59A-33-10;
C. basic
manual means the Basic Manual for Workers' Compensation and
Employers Liability Insurance applicable to New Mexico filed by the WCSO and
approved by the Superintendent;
D. experience
rating means any workers' compensation premium rating plan
which provides for premium adjustments based upon an insured's prior loss
experience;
E. final
earned premium means that premium which applies after the application
of payroll audits and retrospective rating adjustments;
F. manual
premium means the product of payroll per $100 and the manual
rate for a given classification. Manual
premium for a policy means the sum of the manual premiums for the classification
applicable to that policy;
G. manual
rate means workers' compensation base rates filed by
authorized insurers or the workers' compensation assigned risk pool and
approved by the Superintendent;
H. qualifying
classifications means those workers' compensation classifications
listed in subsection C of 13.17.6.8 NMAC;
I. qualifying
policy means a workers' compensation or employer's liability
policy the premium for which is attributable to one or more qualifying
classifications;
J. rate
service organization has the meaning given in NMSA 1978 Section
59A-17-4;
K. remuneration
shall have the meaning used in Rule V of the Basic Manual for Workers
Compensation and Employers Liability Insurance;
L. standard
earned premium means the premiums on which general rate levels are set
as defined in the Basic Manual for Workers' Compensation;
M. Workers’
Compensation Service Organization (WCSO) means either a rate
service organization licensed in accordance with NMSA 1978 Section 59A-17-19 or
an advisory organization licensed in accordance with NMSA 1978 Section
59A-17-24 that is designated by the Superintendent of Insurance in workers’
compensation matters.
[4-1-92, 7-1-97; 13.17.6.7 NMAC – Rn
& A, 13 NMAC 17.6.7, 5-15-01]
13.17.6.8 QUALIFYING
CLASSIFICATIONS:
A. The
Superintendent may amend this rule to add or delete classifications from the
schedule by providing at least thirty (30) days' notice to the WCSO and
otherwise furnishing public notice as required by the Insurance Code.
B. NOC
means “not otherwise classified”.
C. The
premium credit program established by this rule applies only to premium
attributable to one or more of the following classifications:
|
3365 |
Welding
or cutting – NOC & drivers |
|
3724 |
Millwright work NOC
& drivers (Concrete sawing & drilling) & drivers |
|
3726 |
Boiler installation or
repair - steam |
|
5020 |
Ceiling installation -
suspended acoustical grid type |
|
5022 |
Masonry NOC |
|
5037 |
Painting - metal
structures |
|
5040 |
Iron or steel erection -
erecting iron or steel frame structures |
|
5057 |
Iron or steel erection
NOC |
|
5059 |
Iron or steel erection -
frame structures not over two stories |
|
5069 |
Iron
or steel erection in the construction of dwellings not exceeding two stories |
|
5102 |
Door, door frame or sash
erection |
|
5146 |
Furniture or fixtures
installation in offices or stores NOC |
|
5160 |
Elevator erection or
repair |
|
5183 |
Plumbing - NOC &
drivers |
|
5188 |
Automatic sprinkler
installation & drivers |
|
5190 |
Electrical wiring
(within buildings) & drivers |
|
5213 |
Concrete construction
NOC - including foundations |
|
5215 |
Concrete work -
construction of private residence |
|
5221 |
Concrete or cement work
(floors, driveways, yards, or sidewalks) & drivers |
|
5222 |
Concrete construction in
connection with bridges or culverts |
|
5223 |
Swimming pool
construction (not iron or steel) all operations & drivers |
|
5348 |
Tile, stone, mosaic or
terrazzo work - interior construction only |
|
5402 |
Hothouse erection - all
operations |
|
5403 |
Carpentry - NOC |
|
5437 |
Carpentry - installation
of cabinet work or interior trim |
|
5443 |
Lathing & drivers |
|
5445 |
Wallboard installation
(within buildings) & drivers |
|
5462 |
Glaziers (away from
shop) & drivers |
|
5474 |
Painting or paper
hanging NOC & shop operations, drivers |
|
5479 |
Insulation work &
drivers |
|
5480 |
Plastering NOC &
drivers |
|
5491 |
Paper hanging &
drivers |
|
5506 |
Street or road
construction, paving or repaving all kinds & drivers |
|
5507 |
Street or road
construction, clearing or right of way & drivers |
|
5508 |
Street or road
construction, rock excavation & drivers |
|
5538 |
Sheet metal work
erection NOC & drivers |
|
5551 |
Roofing (all kinds)
& drivers |
|
5606 |
Contractor - executive
supervisors |
|
5610 |
Cleaner - engaged in
removal of debris |
|
5645 |
Carpentry - in the
construction of detached private residences |
|
5651 |
Carpentry
- in the construction of dwellings not exceeding three stories in height |
|
5703 |
Building raising or
moving & drivers |
|
5705 |
Salvage operation - removing, sorting,
reconditioning & distributing merchandise in building |
|
6003 |
Pile driving &
drivers |
|
6005 |
Jetty or breakwater
construction & drivers |
|
6017 |
Concrete work in
connection with dams or locks - all types |
|
6018 |
Earth moving or placing
in connection with dams or locks - all types |
|
6045 |
Levee construction &
drivers |
|
6217 |
Excavation & drivers |
|
6229 |
Irrigation or drainage
system construction & drivers |
|
6251 |
Tunneling (not
pneumatic) |
|
6252 |
Shaft sinking (all work to completion)/Caisson
work (all work to completion) |
|
6306 |
Sewer construction (all
operations) & drivers |
|
6319 |
Gas mains or connections
construction & drivers |
|
6325 |
Conduit construction for
cables or wires & drivers |
|
6400 |
Fence construction
(metal) |
|
7538 |
Electric light or power
line construction & drivers |
|
7601 |
Telephone, telegraph or
fire alarm line construction & drivers |
|
7855 |
Railroad
construction: maintenance of way by
contractors & drivers |
|
8227 |
Construction or erection permanent yard
for maintenance of equipment or storage of material |
|
9534 |
Mobile crane & hoisting service
contractors NOC (All operations/yard employees) |
[4-1-92; 13.17.6.8 NMAC – Rn & A, 13 NMAC
17.6.8, 5-15-01]
13.17.6.9 ADMINISTRATIVE
REQUIREMENTS: The premium credit program shall be administered in the
following manner:
A. Each
workers' compensation carrier shall issue a premium credit application form for
each qualifying policy. This form must
be issued by each individual carrier and shall be sent to each insured employer
prior to policy issuance or within sixty (60) days after the policy's effective
date. The Superintendent shall approve
such forms prior to their use. The
carrier shall maintain proof of mailing in its files and shall make such proof
available to the New Mexico Insurance Division upon request.
B. The
employer shall complete the required information and shall mail the completed
form to the WCSO not later than 180 days after the policy's effective
date.
C. The
WCSO shall compute the insured's average hourly wage for each qualifying
classification and shall apply the percentage of premium credit using the
criteria and Premium Credit Schedule established in this rule. These calculations shall be displayed on a
Policy Credit Worksheet. The WCSO shall
mail a copy of the completed worksheet to the insured's carrier.
D. The
carrier shall use the applicable credits to calculate the insured's estimated
premium at policy issuance.
E. The
experience used to determine loss cost and/or manual rates for each
classification shall be reflective of the premium credit program in subsequent
rate filings.
F. The
applicable premium credits shall be reflected in the experience rating and ARAP
calculations.
G. Standard
earned premium reported to the WCSO on the aggregate call for experience must
include the effects of premium credits.
[4-1-92; 13.17.6.9 NMAC – Rn
& A, 13 NMAC 17.6.9, 5-15-01]
13.17.6.10 AUDIT;
PREMIUM CREDIT REVISION: Upon audit at the end of
the policy term, the carrier shall use the same credits in the calculation of
the insured's final earned premium, provided that the carrier may verify the
original qualification criteria as well as the data originally provided by the
insured for the computation of the premium credits by reviewing those records
upon which the insured's data were originally based. If this process uncovers any errors, revised payroll and/or hours
worked data must be submitted to the WCSO.
The carrier shall use the revised data to calculate corrected premium
credits and revised premium.
[4-1-92; 13.17.6.10 NMAC – Rn
& A, 13 NMAC 17.6.10, 5-15-01]
13.17.6.11 CALCULATION
OF AVERAGE HOURLY WAGE AND PREMIUM CREDIT: The
average hourly wage and premium credit shall be calculated in the following manner:
A. The
average hourly wage for each policy's qualifying classifications shall be
determined by dividing the total payroll or remuneration for each
classification by the number of actual hours worked.
B. Total
payroll and hours worked during the third calendar quarter of the year
preceding the policy effective date as reported to taxing authorities shall be
utilized in determining average hourly wage.
If the insured did not engage in operations for the complete quarter,
then the first complete quarter after policy inception shall be used.
C. In
the absence of specific employer records demonstrating actual hours worked for
a given employee, remuneration for such an employee shall not be included in
the determination of average hourly wage, and the premium attributable to such
remuneration shall not be subject to the premium credit program.
D. The
percentage credit to be applied to the manual rate shall be determined
separately for each classification, and shall initially be in accordance with the
following Premium Credit Schedule until the schedule is amended pursuant to
subsection F of this section:
|
INITIAL
PREMIUM CREDIT SCHEDULE |
||||
|
Average
Hourly Wage |
Credit From Manual Premium |
|
Average
Hourly Wage |
Credit From Manual Premium |
|
|
|
|
|
|
|
$10.99
or less |
None |
|
$14.50
- $14.99 |
13% |
|
$11.00
- $11.49 |
6% |
|
$15.00
- $15.49 |
14% |
|
$11.50
- $11.99 |
7% |
|
$15.50
- $15.99 |
15% |
|
$12.00
- $12.49 |
8% |
|
$16.00
- $16.49 |
16% |
|
$12.50
- $12.99 |
9% |
|
$16.50
- $16.99 |
17% |
|
$13.00
- $13.49 |
10% |
|
$17.00
- $17.49 |
18% |
|
$13.50
- $13.99 |
11% |
|
$17.50
- $17.99 |
19% |
|
$14.00
- $14.49 |
12% |
|
$18.00
and above |
20% |
E. The credit shall be
calculated for each qualifying classification utilizing the percentage credit
determined in accordance with subsection D of this section. The discounted rates shall then be utilized
to develop the manual premium.
F. By
September 1 of each year beginning in 1992, the WCSO shall file for approval by
the Superintendent an amended Premium Credit Schedule to adjust the starting
and ending points for each of the wage groups in increments of $.10 to reflect
any increase or decrease in the maximum compensation rate for total disability
as established pursuant to NMSA 1978 Section 52-1-41. To determine the updated starting point for a wage increment, the
previous starting point shall be adjusted by a percentage equal to the
percentage increase in the maximum compensation rate for total disability. The result shall be rounded to the nearest
$.10. No amendment of this rule shall
be necessary in order to implement an adjustment made pursuant to this
section.
[4-1-92; 13.17.6.11 NMAC – Rn
& A, 13 NMAC 17.6.11, 5-15-01]
13.17.6.12 PERIODIC
UPDATING OR REVISION: Pursuant to NMSA 1978
Section 59A-17-8D the rate classification system relied on for workers'
compensation shall be updated and revised periodically to reflect changes in
the workplace.
[4-1-92; 13.17.6.12 NMAC – Rn
& A, 13 NMAC 17.6.12, 5-15-01]
13.17.6.13 REVIEW:
A. By rate service organization or
insurer. Any rating determination made pursuant to this rule may be
appealed as provided in NMSA 1978 Section 59A-17-30B.
B. By Superintendent. Any other
determination or decision made pursuant to this rule may be reviewed by
requesting a hearing pursuant to NMSA 1978 Section 59A-4-15.
4-1-92; 13.17.6.13 NMAC – Rn
& A, 13 NMAC 17.6.13, 5-15-01]
13.17.6.14 PENALTIES: The
Superintendent may revoke, suspend or refuse to continue the license or
certificate of authority of any person who fails to comply with this rule and
may impose such other applicable administrative penalties as may be authorized
by the Insurance Code.
[4-1-92; 13.17.6.14 NMAC – Rn,
13 NMAC 17.6.14, 5-15-01]
HISTORY OF 13.17.6 NMAC:
Pre-NMAC history.
SCC 91-2-IN, Workers' Compensation Premium
Adjustment Program for Qualifying Classifications (Reg. 17, Rule 3), filed on
2-26-92.
History of repealed material.
NMAC history.
13 NMAC 17.6, Premium Adjustment Program, filed
5-27-97 was reformatted, renumbered as 13.17.6 NMAC, and amended effective
5-15-01.