Assigned Risk Rates and Rating Values
Assigned Risk Plan Loss Cost Multipliers
NCCI March 2021 Assigned Risk Rates and LCM Approval Order
TDCI 11-20-19 Orders Approving Workers' Compensation Loss Cost Filing
Effective 3-1-21 the Assigned Risk Plan LCM is 1.791
Effective 3-1-20 the WCIP (Pool) LCM in 1.753
Effective 3-1-19 the WCIP (Pool) LCM in 1.707
Effective 3-1-18 the WCIP (Pool) LCM in 1.709
Effective 3-1-17 the WCIP (Pool) LCM is 1.70
Effective 8-28-16 the WCIP (Pool) LCM is 1.66
Effective 3-1-16 the WCIP (Pool) LCM is 1.66
Effective 3-1-15 the WCIP (Pool) LCM is 1.58
ABCs of Experience Rating
NCCI published this booklet to help explain experience rating and how it affects worker's compensation costs. NCCI’s Experience Rating Plan Manual for Workers Compensation and Employers Liability Insurance (“Plan”) is an integral part of the final cost of workers compensation. It is a method for tailoring the cost of insurance to the characteristics of an employer or risk. It gives the employer the incentive to manage its own costs through measurable and meaningful cost saving programs.
Bonus Rule
Below is the Tennessee law which prohibits the including of bonuses in the premium calculation in almost all cases.
Tennessee Code Ann. §50-6-402. Classification of risks and premiums - Filing - Approval
(a) In determining classifications of risks and premiums relating thereto, the insurer may include allowances of any character made to any employee, only when such allowances are in lieu of wages, and are specified as part of the wage contract.
Many companies refuse to recognize this exception for a variety of reasons. The most common reason is that they do not know it exists in Tennessee and the rules are different in other states. The key to the law and the Tennessee exception is that both parts must be true. Therefore, the bonus must be both 1) in lieu of wages and 2) specified in the wage contract.
Below is text from the State Rule Exception from the NCCI manual which says a company cannot include bonuses in the calculation of WC premiums in Tennessee.
State Rule Exception
RULE 2—PREMIUM BASIS AND PAYROLL ALLOCATION
Effective 01 Jul 2001
A. PREMIUM BASIS
Change Rule 2-A as follows:
Premium is calculated on the basis of the total payroll paid or payable by the insured for services of employees covered by the policy.
The application of this rule is subject to Tennessee Code Annotated, § 50-6-402(a). This Section provides in part that, in determining premium, the insurer may include allowances of any character made to any employee, only when such allowances are in lieu of wages and are specified as part of the wage contract.
Exceptions:
• Premium for domestic worker classifications is calculated on a per capita basis instead of payroll. Domestic workers are employees who perform household duties. Refer to Rule 3-C.
• A per capita classification uses the number of workers rather than payroll to measure exposure.
Effective 01 Mar 2008
B. PAYROLL
1. Includes:
Change Rule 2-B-1 as follows:
c. Bonuses including stock bonus plans, only:
• When paid in lieu of wages, and
• Specified as a part of the wage contract.
e. Pay for holidays, vacations, or periods of sickness. (Refer to Rule 2-G-3 for allocation of payroll for employees subject to more than one classification code; Refer to Tennessee State Special Rule 2-B-2-n for an exception for risks classified to Code 1016—Coal Mining—NOC.)
2. Excludes
Add the following to Rule 2-B-2:
n. Pay for vacation for operations assigned to Code 1016—Coal Mining—NOC.
Every so often Tennessee’s Bonus Rule is questioned by agents and auditors alike. The confusion arises because Tennessee has a different Rule from other jurisdictions. Tennessee’s rule is an EXCEPTION that controls how bonuses are treated for premium calculation purposes. The Bonus Rule as it applies in Tennessee says that premium is to be calculated on the basis of the total payroll paid by the insured for services of “Employees” and shall only include bonuses when the bonus is paid in lieu of wages and specified as part of the wage contract.
Frequently members ask whether corporate officers who receive bonuses are treated differently under the rules. The short answer is “No.” First, look at NCCI Rule C1. Rule C1 clearly states that state law will control over how corporate officers are treated. Tennessee law in T.C.A. 50-6-102 defines corporate officers as Employees. Finally, the Executive Officer Rule states that the premium for executive officers is based upon their total payroll subject to the minimums and maximums. It is clear that bonuses should NOT be included in determining premium.
NCCI has issued a clarification at the request of the INSURORS of Tennessee regarding the Tennessee Special Rule as it relates to bonuses. The memorandum states, "Bonuses should not be included in the premium determination process." It is referring to situations when the bonuses are not paid in lieu of wages and not specified as part of the wage contract. Notice of the clarification has been sent to all companies.
From BULLETIN VOL. 2, January 21, 1991
Changing Classes or Rates
In the Unfair Trade and Claims Practices Act in Tennessee law, adding a class code after the policy expiration is defined as an unfair trade practice. This section usually comes into play at audit when the auditor tries to add a new classification to the policy. An auditor may move payroll among the classifications listed on the policy, but he may not add a new class to the expired policy without the written consent of the insured. This code section applies to all commercial risk policies, not just workers' compensation.
Tennessee Code § 56-8-104 Unfair Trade Practices Defined.
The following practices are hereby defined as unfair trade practices in the business of insurance by any person:
(17) Changing Classification and Rate After Policy Expiration or Renewal.
With respect to commercial risk insurance, making a change in the classification or rates either more than one (1) year after the policy's renewal date or the expiration date if the policy was not renewed without the written consent of the insured, provided that no consent is necessary if the change is in the favor of the insured. This subdivision (17) does not apply where the insured has failed to cooperate, given misleading information, or made material misrepresentations or omissions;
Contracting Codes for Workers' Compensation
Death Benefits
In Tennessee, the maximum death benefit is 450 times the maximum weekly benefit. The present maximum weekly benefit as of July 1, 2015 is $858. Therefore, the maximum death benefit is $386,100 ($858 x 450).
For more information on determining weekly benefits see Maximum and Minimum Weekly Benefits.
Click Here for Department of Labor & Workforce Development Benefit Table.
The applicable definitions under Tennessee law are shown below.
TCA § 50-6-102. Definitions.[Effective July 1, 2014]
(14) "Maximum total benefit" means the sum of all weekly benefits to which a worker may be entitled;
(A) For injuries occurring on or after July 1, 1992, but before July 1, 2009, the maximum total benefit shall be four hundred (400) weeks times the maximum weekly benefit, except in instances of permanent total disability;
(B) For injuries occurring on or after July 1, 2009, but before July 1, 2014, the maximum total benefit shall be four hundred (400) weeks times one hundred percent (100%) of the state's average weekly wage, as determined pursuant to subdivision (15)(B), except in instances of permanent total disability. Temporary total disability benefits paid to the injured worker shall not be included in calculating the maximum total benefit;
(C) For injuries occurring on or after July 1, 2014, the maximum total benefit shall be four hundred fifty (450) weeks times one hundred percent (100%) of the state's average weekly wage, as determined pursuant to subdivision (15)(B), except in instances of permanent total disability. Temporary total disability benefits paid to the injured worker before the employee attains maximum medical improvement shall not be included in calculating the maximum total benefit;
TCA § 50-6-209. Maximum compensation.
(a) In all cases of permanent total disability of an employee covered by the Workers' Compensation Law, compiled in this chapter, sixty-six and two-thirds percent (662/3%) of the average weekly wages, as defined, shall be paid, subject to maximum compensation as follows: where there are or are not persons dependent upon each injured employee, the maximum weekly benefit per week.
(b) (1) In all cases of death of an employee covered by the Workers' Compensation Law, compiled in this chapter, sixty-six and two-thirds percent (662/3%) of the average weekly wages, as defined, shall be paid in cases where such deceased employee leaves dependents, subject to the maximum weekly benefit.
(2) In all cases of death of an employee covered by the Workers' Compensation Law, compiled in this chapter, and where such employee leaves no dependents, as provided in § 50-6-210, then the lump sum amount of twenty thousand dollars ($20,000) shall be paid to the estate of such deceased employee.
(3) The total amount of compensation payable under this subsection (b) shall not exceed the maximum total benefit exclusive of medical, hospital and funeral benefits.
TCA §50-6-209 means the 450 week maximum is applied to the individual's average weekly wage subject to a maximum of the state's average weekly wage.
Definition of Employee - Seven Factors
The Tennessee Workers' Compensation Law defines who is an Employee. TCA § 50-6-102(10)(D) lists the seven factors to be considered in determining whether and individual is an employee or independent contractor. These factors still apply to any employees not otherwise covered by the Construction Service Provider portion of the law. For the definition of employees of Construction Service Providers, see TCA § 50-6-902.
Here is the definition as found in TCA § 50-6-102(10)(D):
(10) (A) "Employee" includes every person, including a minor, whether lawfully or unlawfully employed, the president, any vice president, secretary, treasurer or other executive officer of a corporate employer without regard to the nature of the duties of the corporate officials, in the service of an employer, as employer is defined in subdivision (11), under any contract of hire or apprenticeship, written or implied. Any reference in this chapter to an employee who has been injured shall, where the employee is dead, also include the employee's legal representatives, dependents and other persons to whom compensation may be payable under this chapter;
(B) "Employee" includes a sole proprietor or a partner who devotes full time to the proprietorship or partnership and elects to be included in the definition of employee by filing written notice of the election with the division at least thirty (30) days before the occurrence of any injury or death, and may at any time withdraw the election by giving notice of the withdrawal to the division;
(C) The provisions of this subdivision (10), allowing a sole proprietor or a partner to elect to come under this chapter, shall not be construed to deny coverage of the sole proprietor or partner under any individual or group accident and sickness policy the sole proprietor or partner may have in effect, in cases where the sole proprietor or partner has elected not to be covered by the provisions of the Workers' Compensation Law, for injuries sustained by the sole proprietor or partner that would have been covered by the provisions of the Workers' Compensation Law had the election been made, notwithstanding any provision of the accident and sickness policy to the contrary. Nothing in this section shall require coverage of occupational injuries or sicknesses, if occupational injuries or sicknesses are not covered under the terms of the policy without reference to eligibility for workers' compensation benefits;
(D)(i) In a work relationship, in order to determine whether an individual is an "employee," or whether an individual is a "subcontractor" or an "independent contractor," the following factors shall be considered:
(a) The right to control the conduct of the work;
(b) The right of termination;
(c) The method of payment;
(d) The freedom to select and hire helpers;
(e) The furnishing of tools and equipment;
(f) Self-scheduling of working hours; and
(g) The freedom to offer services to other entities;
(ii) A premium shall not be charged by an insurance company for any individual determined to be an independent contractor pursuant to this subdivision (11)(D);
(E) "Employee" does not include a construction services provider, as defined in § 50-6-901, if the construction services provider is:
(i) Listed on the registry established pursuant to part 9 of this chapter as having a workers' compensation exemption and is working in the service of the business entity through which the provider obtained such an exemption;
(ii) Not covered under a policy of workers' compensation insurance maintained by the person or entity for whom the provider is providing services; and
(iii) Rendering services on a construction project that:
(a) Is not a commercial construction project, as defined in § 50-6-901; or
(b) Is a commercial construction project, as defined in § 50-6-901, and the general contractor for whom the construction services provider renders construction services complies with § 50-6-914(b)(2);
Department Bulletin on Handyman Premiums
Certificates of Insurance (March 21, 2012)
This Bulletin addresses Certificates of Insurance and the Unfair Trade Practices Act.
Punitive Damages (July 19, 2004)
This Bulletin allows insurance companies to exclude punitive damages by filing for an exclusion.
Rebating Bulletin (February 13, 2015)
This Bulletin clarifies that gifts and valuable consideration offered to a prospective customer regardless of whether that person purchases insurance is not rebating under the UTPA.
Surplus Lines Filing Guidance (June 26, 2014)
This Bulletin provides guidance on filing of single and multi-state policies where Tennessee is deemed the Home State based upon NIMA.
Sinkholes: Defining "Make Available" (June 12, 2014)
This Bulletin clarifies that a company must make sinkhole coverage "available" not only at the inception of the policy, but at any time upon request of the consumer.
Sinkhole Coverage for Residential Properties (August 12, 2015)
This Bulletin clarifies that the sinkhole law requires coverage to all structures on the property.
CSP's Working Directly for Property Owner (December 28, 2012)
This Bulletin clarifies that CSP's workering directly for the property owner or on their own property are not required to carry workers' compensation insurance on themselves.
Employers Required to Carry Workers' Compensation Coverage
The law is exclusive in that it lists those employers NOT required to carry Workers' Compensation Insurance. Spouses, children, cousins and all kinfolk are included in counting employees. All part time employees are included in the counting of employees.
The law may be found at Tennessee Code § 50-6-106.
§ 50-6-106. Employments not covered. [Effective July 1, 2014]
This chapter shall not apply to:
(1) (A) Any common carrier doing an interstate business while engaged in interstate commerce, which common carrier and the interstate business are already regulated as to employer's liability or workers' compensation by act of congress, it being the purpose of this law to regulate all such business that the congress has not regulated in the exercise of its jurisdiction to regulate interstate commerce; provided, that this chapter shall apply to those employees of the common carriers with respect to whom a rule of liability is not provided by act of congress; provided, further, that no common carrier by motor vehicle operating pursuant to a certificate of public convenience and necessity shall be deemed the employer of a leased-operator or owner-operator of a motor vehicle or vehicles under a contract to such a common carrier
(B) Notwithstanding subdivision (1)(A), a leased operator or a leased owner/operator of a motor vehicle under contract to a common carrier may elect to be covered under any policy of workers' compensation insurance insuring the common carrier upon written agreement of the common carrier, by filing written notice of the contract, on a form prescribed by the administrator, with the division; provided, that the election shall in no way terminate or affect the independent contractor status of the leased operator or leased owner/operator for any other purpose than to permit workers' compensation coverage. The election of coverage may be terminated by the leased operator, leased owner/operator, or common carrier by providing written notice of the termination to the division and to all other parties consenting to the prior election. The termination shall be effective thirty (30) days from the date of the notice to all other parties consenting to the prior election and to the division
(2) Any person whose employment at the time of injury is casual, that is, one who is not employed in the usual course of trade, business, profession or occupation of the employer;
(3) Domestic servants and employers of domestic servants;
(4) Farm or agricultural laborers and employers of those laborers;
(5) In cases where fewer than five (5) persons are regularly employed, except as provided in § 50-6-902; provided, that in those cases the employer may accept this chapter by filing written notice of the acceptance with the division at least thirty (30) days before the happening of any accident or death, and may at any time withdraw the acceptance by giving like notice of withdrawal;
(6) The state, counties of the state and municipal corporations; provided, that the state, any county or municipal corporation may accept this chapter by filing written notice of the acceptance with the division under the administrator, at least thirty (30) days before the happening of any accident or death, and may at any time withdraw the acceptance by giving like notice of the withdrawal. The state, any county or municipal corporation may accept this chapter as to any department or division of the state, county or municipal corporation by filing written notice of acceptance with the division under the administrator, at least thirty (30) days before the happening of any accident or death and may, at any time, withdraw acceptance for the division or department by giving like notice of the withdrawal, and the acceptance by the state, county or municipal corporation for any department or division of the state, county or municipal corporation shall have effect only of making the department or division designated subject to the terms of this chapter; or
(7) Any person performing voluntary service as a ski patrolperson who receives no compensation for the services other than meals, lodging or the use of ski tow or ski lift facilities or any combination of meals, lodging and the use of ski tow or ski lift facilities.
ERM-14 Change of Ownership Form
CONFIDENTIAL REQUEST FOR INFORMATION
The following confidential ownership statements may be used only in establishing premiums for your insurance coverages. It is extremely important that all questions be answered completely. Your workers compensation policy requires that you report ownership changes, and other changes as detailed below, to your insurance carrier in writing within 90 days of the change. If you have questions, contact your agent, insurance company, or the appropriate rating organization. Submit the completed form to the rating organization.
The NCCI address is:
National Council on Compensation Insurance
901 Peninsula Corporate Circle
Boca Raton, FL 33487
Phone: 800-NCCI 1-2-3
(800-622-4123)
View the ERM-14 Form and Instructions here.
ERM-6 Experience Rating for Self-Insureds
Guide to the ERM-6 Form— Workers Compensation Experience Rating for Self-Insureds
ERM-6 Form Key Definitions:
Risk Identification No.: A 9-digit number that NCCI assigns to each rated insured.
State of Coverage: The state for which the policy was written; this is not necessarily the state in which the insured is located.
Effective Date of Rating: This is the first day of the rating period for an experience rating modification. This date is based on the effective date of the most current policy that ran a full year. For example, if last year’s policy effective date was 4/4/03, then the effective date of the experience rating would be 4/4/04.
What Fits on a Rating
A total of three years of experience can be included on a rating. Do not include the year immediately prior to the effective date of the rating.
For example, payroll and losses that would fit on a 4/4/04 rating would be:
4/4/00–4/4/01
4/4/01–4/4/02
4/4/02–4/4/03
The 4/4/03–4/4/04 experience will not fit on an experience rating effective 4/4/04.
Please Keep the Following in Mind When Preparing an ERM-6 Form: It is extremely important that everything be completely filled out and accurate. If handwritten, please print clearly.
Payroll
Payroll It is not possible to have losses without payroll. All payroll amounts must be submitted in whole dollars only (e.g., correct $1; incorrect $1.25). Each payroll amount must have the appropriate class code assigned to it.
Experience Modification Factors
Experience modification factors - Notification of employers - Failure to give timely notification.
If the experience modification factor notification is not received by the employer prior to the policy renewal date, or the policy anniversary date if different, the experience modification factor shall not be used for premium purposes if its use results in a higher premium for the employer. The mailing of the experience modification factor worksheet shall be sufficient proof of notice, provided such mailing is by certified mail, return receipt requested.
This law means that unless the employer receives the experience modification worksheet by registered mail, return receipt requested, prior to the renewal date the company cannot use the late factor to increase the employers WC premium. The law became effective upon its passage May 31, 2000. It applies to both voluntary and assigned risk business.
This is a two part law. Part (a) requires that the experience modification worksheet be sent to the employer at no charge, and part (b) requires that it be sent certified mail, return receipt requested. While the law does not specify who will send the worksheet the NCCI rule says the NCCI will send the worksheet via certified mail, return receipt requested. Part (b) also says the mod may not be used if it goes up and "is not received by the employer prior to the policy renewal date, or the policy anniversary date if different". You may encounter carriers that say the law allows late mods to be used when it is new business to the company. The NCCI rule makes it clear that the mod notification applies to both new and renewal policies by stating "the modification shall not be applied if endorsed after the policy effective date, or anniversary rating date, if different than the policy effective date."
TCA § 50-6-414. Experience modification factors - Notification of employers - Failure to give timely notification.
(a) Any employer who is assigned an experience modification factor for the purpose of determining its workers' compensation premium shall be sent annually, at no charge to the employer, a copy of any information relative to its experience modification factor that is available to an insurance company.
(b) If the experience modification factor notification is not received by the employer prior to the policy renewal date, or the policy anniversary date if different, the experience modification factor shall not be used for premium purposes if its use results in a higher premium for the employer. The mailing of the experience modification factor worksheet shall be sufficient proof f notice, provided such mailing is by certified mail, return receipt requested.
The following are the NCCI exceptions for the law:
STATE RULE EXCEPTIONS
RULE 1-GENERAL EXPLANATIONS
D. ADMINISTRATION Effective 01 Dec 2003
Change Rule 1-D-4 as follows:
4. Any employer qualifying for an experience rating modification factor will receive a copy of its experience rating worksheet annually from NCCI, via certified mail, return receipt requested. There will be no charge to the employe
r for this service. The carrier of record and producer of record are provided access to the experience rating worksheet. Additional parties may be allowed access to the experience rating worksheet if authorized in writing by the employer.
RULE 4—APPLICATION AND REVISION OF EXPERIENCE RATING MODIFICATION
E. CHANGES IN EXPERIENCE RATING MODIFICATIONS
Change the Changes in Experience Rating Modifications Table of Rule 4-E as follows:
Furnishing Loss Run History
All Commercial Lines Insurance carriers are required under Tennessee law to provide the insured or the insured's designee a copy of the insured's three (3) year loss run history within 30 days of the written request.
TCA § 56-5-323. Commercial lines insurer's obligation to furnish loss run history to insured.
(a) Within ten (10) business days of receipt of a written request from an insured or an insured's designee, a commercial lines insurer shall furnish directly to the person designated in the request, a copy of the insured's loss run history for up to the previous three (3) years, or complete loss run history with the insurer if the history is less than three (3) years. A written request includes communications made by email or fax. For the purposes of this section, “receipt” means receipt by an individual or entity designated by an insurer to receive loss run history requests.
(b) If the insurer fails to provide the requested information within the time allowed in this section, the failure shall be a violation of the Tennessee Unfair Trade Practices and Unfair Claims Settlement Act of 2009, compiled in chapter 8, part 1 of this title, and any requestor may seek enforcement and any remedies allowed pursuant to that chapter. The commissioner may take action in accordance with § 56-2-305 for the violation of subsection (a).
(c) Notwithstanding this part to the contrary, no insurer shall charge any fees to prepare and furnish one (1) three-year loss run history. However, if the insurer provides the loss run history via electronic means, then the insurer may charge a reasonable fee to provide a hard copy of the same report.
Minimum and Maximum Weekly Benefits
The state's average weekly wage (SAWW) effective July 1, 2015 is $858. The maximum benefit is 2/3's of the employee's average weekly wage subject to a maximum of the SAWW. Therefore the maximum weekly benefit for permanent disability claims occurring after July 1, 2015 is $858. The maximum weekly benefit for temporary benefits is 110% of the SAWW or $943.80 (1.10 x $858) The minimum weekly benefit after July 1, 2015 is $128.70 (15% of $858).
Click Here for Department of Labor & Workforce Development Benefit Table.
Tennessee Code §50-6-102 [Effective July 1, 2014]
(14) "Maximum total benefit" means the sum of all weekly benefits to which a worker may be entitled;
(A) For injuries occurring on or after July 1, 1992, but before July 1, 2009, the maximum total benefit shall be four hundred (400) weeks times the maximum weekly benefit, except in instances of permanent total disability;
(B) For injuries occurring on or after July 1, 2009, but before July 1, 2014, the maximum total benefit shall be four hundred (400) weeks times one hundred percent (100%) of the state's average weekly wage, as determined pursuant to subdivision (15)(B), except in instances of permanent total disability. Temporary total disability benefits paid to the injured worker shall not be included in calculating the maximum total benefit;
(C) For injuries occurring on or after July 1, 2014, the maximum total benefit shall be four hundred fifty (450) weeks times one hundred percent (100%) of the state's average weekly wage, as determined pursuant to subdivision (15)(B), except in instances of permanent total disability. Temporary total disability benefits paid to the injured worker before the employee attains maximum medical improvement shall not be included in calculating the maximum total benefit;
(15) (A) "Maximum weekly benefit" means the maximum compensation payable to the worker per week;
(i) For injuries occurring between July 1, 1990, and June 30, 1991, the maximum weekly benefit shall be two hundred seventy-three dollars ($273) per week;
(ii) For injuries occurring on or after July 1, 1991, and before August 1, 1992, the maximum weekly benefit shall be two hundred ninety-four dollars ($294) per week;
(iii) For injuries occurring on or after August 1, 1992, and through June 30, 1993, the maximum weekly benefit shall be sixty-six and two thirds percent (66 2/3%) of the employee's average weekly wage up to seventy-eight percent (78%) of the state's average weekly wage, as determined by the department;
(iv) For injuries occurring on or after July 1, 1993, and through June 30, 1994, the maximum weekly benefit shall be sixty-six and two thirds percent (66 2/3%) of the employee's average weekly wage up to eighty-two and four-tenths percent (82.4%) of the state's average weekly wage, as determined by the department;
(v) For injuries occurring on or after July 1, 1994, and through June 30, 1995, the maximum weekly benefit shall be sixty-six and two thirds percent (66 2/3%) of the employee's average weekly wage up to eighty-six and eight-tenths percent (86.8%) of the state's average weekly wage, as determined by the department;
(vi) For injuries occurring on or after July 1, 1995, and through June 30, 1996, the maximum weekly benefit shall be sixty-six and two thirds percent (66 2/3%) of the employee's average weekly wage up to ninety-one and two-tenths percent (91.2%) of the state's average weekly wage, as determined by the department;
(vii) For injuries occurring on or after July 1, 1996, and through June 30, 1997, the maximum weekly benefit shall be sixty-six and two thirds percent (66 2/3%) of the employee's average weekly wage up to ninety-five and six-tenths percent (95.6%) of the state's average weekly wage as determined by the department;
(viii) For injuries occurring on or after July 1, 1997, and through June 30, 2004, the maximum weekly benefit shall be sixty-six and two thirds percent (66 2/3%) of the employee's average weekly wage up to one hundred percent (100%) of the state's average weekly wage as determined by the department;
(ix) For injuries occurring on or after July 1, 2004, the maximum weekly benefit for permanent disability benefits shall be sixty-six and two thirds percent (66 2/3%) of the employee's average weekly wage up to one hundred percent (100%) of the state's average weekly wage, as determined by the department; and
(x) (a) For injuries occurring on or after July 1, 2004, through June 30, 2005, the maximum weekly benefit for temporary disability benefits shall be sixty-six and two thirds percent (66 2/3%) of the employee's average weekly wage up to one hundred five percent (105%) of the state's average weekly wage, as determined by the department; and
(b) For injuries occurring on or after July 1, 2005, the maximum weekly benefit for temporary disability benefits shall be sixty-six and two thirds percent (66 2/3%) of the employee's average weekly wage up to one hundred ten percent (110%) of the state's average weekly wage, as determined by the department;
(B) As used in subdivision (15)(A), the state average weekly wage shall be determined as of the preceding January 1, and shall be adjusted annually using the data from the division and shall be effective on July 1 of each year;
Minimum/Maximum Payroll for Partners, Sole Proprietors, and Executive Officers
This is the 2021 Loss Cost Page for Miscellaneous Values relative to Tennessee regarding the Minimum and Maximum Payroll in accordance with the NCCI Basic Manual for Partners, Sole Proprietors and Executive Officers.
Mid-Term Cancellations
What is the proper procedure for computing the return premium when a workers’ compensation policy is cancelled by the insured so that they can purchase the coverage from another carrier? The NCCI rule refers to this as “canceled by the insured,” except when retiring from business. The NCCI rule for the proper procedure is written to discourage, although punish might be a better word, the insured from cancelling mid-term.
The rule is contained in Appendix B Cancellation Tables of the NCCI Basic Manual. The short rate percentage is applied to the payroll and the premium that would have been developed for the entire policy period and NOT just the premium developed for the period of time the policy was in effect. For example, if a policy is cancelled by the insured after six months and the earned premium for the six month period is $50,000, Applying the NCCI rule would produce an annual premium of $100,000. The short rate percentage for an annual policy cancelled at six months is 60% so therefore the company would then retain 60% of the annualized premium of $100,000 (or $60,000). If the insured had paid the full annual estimated premium of $100,000 in advance, then they would get a return premium of $10,000 and not the $20,000 ($50,000 earned time 40%) they might have expected by using the traditional short rate cancellation method.
An insured and agent should determine the amount of return premium that will be received both if they cancel a workers compensation policy and switch to a new carrier mid-term. Here are the supporting documents:
Ownership Changes
The rule from the NCCI Experience Rating manual is shown below.All three conditionsmust be satisfied before the current mod will not be applied to the new owners).
2. Exclusion of Experience.
Rare circumstances may require that experience for any entity undergoing a change in ownership be excluded from future experience ratings. The experience will be excluded only if the rating organization confirms all of the following:
a. The change must be a material change such that:
(1) The entire ownership interest after the change had no ownership interest before the change, or
(2) The collective ownership of all those having interest in an entity results in either less than:
1/3 ownership before the change, or
1/2 ownership after the change; and
b. The material change in ownership is accompanied by a change in operations sufficient to result in reclassification of the governing classification; and
c. The material change in ownership is accompanied by a change in the process and hazard of the operations. Change in process and hazard is determined by the rating organization.
Safety Committee
Beginning in 1992, the Department of Labor requires any Employer with an experience modification factor or rate greater than or equal to 1.20 to establish a safety committee. The Safety Committee must establish procedures for workplace safety inspections, for investigating all safety incidents, accidents, illnesses and deaths; and for evaluating accident and illness prevention programs.
Below is Tennessee Code § 50-6-501 requiring such Safety Committees.
TCA § 50-6-501. Establishment of safety committees -- Reporting by insurance companies -- Civil penalty. [Effective on July 1, 2014.]
(a) In order to promote health and safety in places of employment in this state, every public or private employer that is subject to this chapter, shall establish and administer a safety committee in accordance with rules adopted pursuant to § 50-6-502, if the administrator of the workers' compensation division finds that the employer has an experience modification factor or rate applied to the premium greater than or equal to one and twenty hundredths (1.20).
(b) In making determinations under subsection (a), the administrator of the workers' compensation division shall utilize the most recent statistics regarding experience modification rates.
(c) (1) Every insurance company authorized to write workers' compensation insurance shall submit its modification factors or rates for each of its workers' compensation insureds to the commissioner of commerce and insurance, when requested by the commissioner. On request from the administrator of the workers' compensation division, the commissioner of commerce and insurance shall provide the division of workers' compensation with the information.
(2) The administrator of the workers' compensation division shall establish safety committee requirements for self-insured employers pursuant to rules promulgated in accordance with the Uniform Administrative Procedures Act, compiled in title 4, chapter 5.
(3) The commissioner of commerce and insurance may assess a civil penalty of up to two thousand dollars ($2,000) per incident for failure to comply with subdivision (c)(1).
Standard Industrial Classification
This link allows a user to search the 1987 version of the SIC manual by keyword. You may also view the entire manual.
Subrogation Waivers
Insurors lists the waiver of subrogation charges filed with the Tennessee Department of Commerce and Insurance.
Tennessee Employers in the Assigned Risk Plan
NCCI maintains a list of employers in the Assigned Risk Plan**.
In order to access the list, you will need an NCCI username and ID. If you do not have an NCCI username and ID you may create one at www.ncci.com for free.
** This list does not include employers who elect to have their name excluded by marking the application accordingly.
Unfair Use of Proprietary Information
The Unfair Trade Practices Act states that insurance in a pool, residual market mechanism, joint underwriting authority, assigned risk plan or plan depopulation initiative could not be used by the servicing carrier or its representatives for the purpose of soliciting any form of insurance. The law now also prevents carriers who contract with the state for depopulation from taking client information to solicit insurance, or from passing that information on to others. Carriers and their representatives who violate the law face penalties of $1,000 per violation, per day, or $25,000 per violation, per day if they knew they were in violation of the law.
TCA §56-8-104. Unfair trade practices defined.
The following practices are defined as unfair trade practices in the business of insurance by any person:
(16)Unfair Utilization of Proprietary Information. With respect to any policy of insurance underwritten in a pool, residual market mechanism, joint underwriting authority or assigned risk plan or through a plan depopulation initiative or other similar program, any information contained in a policy application or obtained in the servicing of such a policy of insurance cannot be used in any manner by the servicing carrier or its representatives for the purpose of soliciting any form of insurance, except when permission to use the information is granted by the commissioner on any specific risk;