BEFORE THE INSURANCE COMMISSIONER
OF THE STATE OF DELAWARE
Regulation No. 65, Workplace Safety
IN THE MATTER OF: |
|
THE AMENDMENT OF | Docket No. 98-27
DEPARTMENT OF INSURANCE |
DEPARTMENT REGULATION |
NUMBER 65 |
ORDER
COMES NOW, the Insurance Commissioner of the State of Delaware and Orders in conformance with the Proposed Order and Recommendation of the Hearing Officer as follows:
WHEREAS, I have considered the Proposed Order and Recommendation submitted by the Hearing Officer, as well as the entire record of this matter; and
NOW THEREFORE, I adopt the Proposed Order and Recommendation and incorporate the summary of evidence, the proposed findings of fact, and the recommendation of the Hearing Officer by this reference.
FURTHER, I Order that Regulation No.65 be revised as referenced herein, effective July 1, 1999.
SO ORDERED this 31st day of August, 1998.
DONNA LEE WILLIAMS
Insurance CommissionerState of Delaware
REGULATION NO. 65
DELAWARE WORKPLACE SAFETY REGULATION
Sec.
1. Authority
2. Purpose
3. Scope
4. Eligibility and premium credit
5. Notice of employer eligibility
6. Eligibility period
7. Inspections and cost
8. Renewals and eligibility
9. Premium size ranges and corresponding credits
10. Effect upon manual rates and schedule rating credits
11. Effective date
* Please note thse refer to pages in the regulation, not the Register.
SECTION 1. AUTHORITY.
This regulation is adopted and promulgated by the Insurance Commissioner pursuant to Title 18 Del. C. Section 314, Section 2533 and promulgated under 29 Del. C. Chapter 101.
SECTION 2. PURPOSE.
The purpose of this regulation is to:
A. Enhance the health and safety of workers in the State of Delaware.
B. Provide lower insurance premiums for qualifying employers who currently pay [between $3,161 and $60,000][$3,161 or more] of annual Delaware Workers' Compensation premiums.
C. Establish both testing and inspection procedures to determine an employer's qualification for a premium credit under the Workplace Safety Program.
SECTION 3. SCOPE.
All employers who comply with the criteria set forth in this regulation are eligible for participation in the Workplace Safety Program. Only Delaware work sites will be eligible for this program and safety credit applies to only Delaware premiums in multi-state policies.
SECTION 4. ELIGIBILITY AND PREMIUM CREDIT.
An employer is eligible for the Safety Program if its annual premium is $3,161 or more. Workplace Safety credit eligibility is based on the most current unit statistical card filing. The Delaware Compensation Rating Bureau will test each employer by taking the most current unit statistical card payroll times current rates times current experience modification to determine the employer's premium size.
SECTION 5. NOTICE OF EMPLOYER ELIGIBILITY.
[A. ]Employers meeting the premium requirement will be notified by the Delaware Department of Insurance seven months in advance of their policy renewal date. This notification will include[(s)] [a questionnaire ][instructions for qualifying] [on how to proceed to ascertain whether the employer may qualify ]for a safe workplace credit.
[B. In a form acceptable by the Delaware Department of Insurance, the Delaware Compensation Rating Bureau will mail to each carrier's home office a list of its policyholders who have met the premium requirements and who have been notified by the Department.]
SECTION 6. ELIGIBILITY PERIOD.
The Department will notify the employer of eligibility, and inform the employer that he must elect at least five (5) months in advance of the date of policy renewal to participate in the Safety Program. Failure to notify the Department within this time period of an intent to renew participation may preclude the employer's participation in the Program for the next year. Election to participate shall commence by contacting the Delaware Department of Insurance.
SECTION 7. INSPECTIONS AND COST.
A. All inspections shall be made by a representative from an independent safety expert company under contract to the Insurance Department. The Insurance Department will notify the inspector of the employer's request. The inspector, in turn, will then contact the employer to set up the first of two inspections. A second unannounced inspection shall be made no later than the expiration date of the policy to which any workplace safety credit based on the inspection will apply to confirm the initial certifications of safety in the workplace. The Department of Insurance will notify the Bureau when an employer successfully completes [both the ][each] scheduled and[/or] nonscheduled inspection. Failure to pass [the first] [a] scheduled inspection will result in a denial of an employer's eligibility to participate in the Workplace Safety Program. However, the employer, after failing [an] [its first ]inspection can request another inspection, after successful completion of which will make them eligible for participation in the Workplace Safety Program.
B. The cost of each inspection will be borne by the employer. The minimum charge for safety inspection is $150 per location. Each work location must successfully pass both inspections before an employer is entitled to a premium credit under the program. Inspection fees for large and/or complex employers may be established by the Department of Insurance.
SECTION 8. RENEWALS AND ELIGIBILITY.
An employer must apply for the Workplace Safety Program each year. For each year after the initial qualification, the inspection requirement will consist of one unannounced inspection. The Department will maintain a list of inspection charges which will be sent to interested parties upon request.
SECTION 9. PREMIUM SIZE RANGES AND CORRESPONDING CREDITS.
Safety credits will be granted according to the following formula:
20% x [1.0000 - C]
where “C” is the credibility of the qualified employer in the uniform Experience Rating Plan for the policy period expiring immediately prior to the application of the Safety credit. If the qualified employer was not experience-rated in the policy period expiring immediately prior to the application of the Safety credit, “C” will be set at [0.500] [0.050] Safety credit packages will be rounded to the nearest whole percent.
SECTION 10. EFFECT UPON MUTUAL RATES AND SCHEDULE RATING CREDITS.
A. Workers' Compensation manual rates shall [not] be adjusted because of implementation of this program. [A Delaware Workplace Safety Program Factor shall be included in loss costs and residual market rates. This factor may offset credits given to qualified employers, so that the Workplace Safety Program will neither increase nor decrease premiums for eligible employers in the aggregate.]
B. Schedule rating plan credits given to policyholders for "competitive" reasons cannot be withdrawn. Schedule credits given for safety reasons may be reduced to offset the Workplace Safety Program premium credit.
[C. A Merit Rating Plan shall be implemented which will provide incentives for employers paying less than $3,161 of annual Delaware Workers’ Compensation premiums to maintain safe workplaces.]
[C. A Delaware Workplace Safety Program Correction Factor shall be included in loss costs and residual market rates. This factor may offset credits given to qualified employers, so that the Workplace Safety Program will neither increase nor decrease premiums for eligible employers in the aggregate.]
SECTION 11. EFFECTIVE DATE.
The [amended portions] of this regulation shall become effective [on July 1, 1999].[30 days after the Commissioner's signature.]
Donna Lee H. Williams
Insurance Commissioner