§ 125.135. Classification system; experience rating; contribution rates.
(a) A fund shall adhere to the uniform classification system and uniform experience rating plan filed with the Commissioner of the Insurance Department by a rating organization under Article VII of the act (77 P. S. § § 1035.1—1035.22).
(b) A fund shall base its member contribution rates on no less than the current effective loss costs plus the fund’s approved loss-cost multiplier. A fund may also reduce a member’s contribution rates for up to 5 years by 5% if the member establishes a workplace safety committee which received certification by the Department and continues to meet certification requirements under section 1002 of the act (77 P. S. § 1038.2) and regulations thereunder.
(c) No later than 45 days prior to the beginning of a fund year, a fund may request the Bureau’s permission to change its loss-cost multiplier for member contributions payable during that next fund year. The request to change a fund’s loss-cost multiplier shall be on a form prescribed by the Bureau. The fund may support its loss-cost multiplier request with a report prepared by an independent actuary but an actuarial report is not required.
(d) If the Bureau determines that the loss-cost multiplier requested under subsection (c) is unreasonably low, so that it impairs the fund’s ability to meet its expenses, the Bureau will notify the fund that the loss-cost multiplier request is denied. The notification will be sent to the fund no later than 30 days after the filing of the request. Use of a loss-cost multiplier which has not been approved by the Bureau shall result in the revocation of the fund’s permit under section 805(a) of the act (77 P. S. § 1036.5).
(e) No later than 45 days prior to the beginning of a fund year following its third year of operation, a fund may request permission of the Bureau to deviate from the uniform classification system, uniform experience rating plan, loss costs and discounts outlined in subsections (a) and (b), including the use of retrospectively rated and deductible plans. An applicant comprised of a majority of prospective members who are participants in a group insurance purchase cooperative/safety group for at least 3 years prior to the submission of its application or comprised of a majority of prospective members who are political subdivisions approved as self-insurers under section 305 of the act (77 P. S. § 501) may also request permission of the Bureau to deviate from the requirements of subsections (a) and (b).
(f) A deviation request under subsection (e) shall be supported by a report prepared by an independent actuary projecting the incurred loss experience of the fund forits next fund year by various levels of actuarial confidence and rendering an opinion that the total contributions received if the deviation is permitted will be adequate to satisfy the applicant’s obligations and expenses. A request for deviation from the loss costs of a rating organization shall include a schedule of the loss costs proposed for the fund year.
(g) If the Bureau determines that the deviation requested under subsection (e) may impair the fund’s ability to meet its obligations, it will notify the fund that the deviation request is denied. The notification will be sent to the fund no later than 30 days after the filing of the request. Use of loss costs which have not been approved by the Bureau will result in the revocation of the fund’s permit under section 805(a) of the act (77 P. S. § 1036.5).
Source The provisions of this § 125.135 amended October 23, 1998, effective October 24, 1998, apply to a group self-insurance fund for fund year commencing after final publication in the Pennsylvania Bulletin, 28 Pa.B. 5459. Immediately preceding text appears at serial page (201161).
Cross References This section cited in 34 Pa. Code § 125.133 (relating to application).
No part of the information on this site may be reproduced for profit or sold for profit.
This material has been drawn directly from the official Pennsylvania Code full text database. Due to the limitations of HTML or differences in display capabilities of different browsers, this version may differ slightly from the official printed version.
