CHAPTER 626
RATE REGULATION IN WORKER'S COMPENSATION INSURANCE
626.03 Scope of application.
626.09 General provisions concerning the bureau.
626.125 Qualified loss management program.
626.13 Approval of rates and rating plans.
626.14 Filings open to inspection.
626.22 Disapproval of rates.
626.31 Operation and control of bureau.
626.32 Development of rates by bureau.
626.35 Worker's compensation insurance contracts.
626.51 Other rate service organizations.
Ch. 626 Cross-reference
Cross-reference: See definitions in ss.
600.03 and
628.02.
Ch. 626 Note
NOTE: Chapter 148, laws of 1975, which created this chapter of the statutes, contained notes explaining the revision. See the 1975 session law volume.
626.02
626.02
Definitions. In this chapter, unless the context indicates otherwise:
626.02(1)
(1) "Bureau" means the Wisconsin compensation rating bureau provided for in
s. 626.06.
626.02(2)
(2) "Rate service organization" has the meaning designated for the term under
s. 625.02 (2).
626.02 History
History: 1975 c. 148;
1983 a. 189.
626.03
626.03
Scope of application. This chapter applies to all worker's compensation insurance written on risks or operations in this state, employers' liability insurance when written in connection with worker's compensation insurance or insurance covering any part of the liability of an employer exempted from insuring the employer's liability for compensation under
s. 102.28.
626.03 History
History: 1975 c. 148,
199.
626.06
626.06
Rating bureau. The Wisconsin compensation rating bureau is continued and every insurer writing any insurance specified under
s. 626.03 is a member of it.
626.06 History
History: 1975 c. 148.
626.09
626.09
General provisions concerning the bureau. 626.09(1)(1)
Purposes. The bureau has the following purposes:
626.09(1)(a)
(a) To establish, maintain and administer rules, regulations, classifications, rates and rating plans to govern the transaction of insurance included in
s. 626.03;
626.09(1)(b)
(b) To cooperate with other rate service organizations and with insurers in the development of rules, rates and rating plans and insurance policies and forms;
626.09(1)(c)
(c) To secure and analyze statistical and other data required to accomplish these purposes;
626.09(1)(e)
(e) To file with the commissioner on behalf of its members every manual of classifications, rules and rates, every rating plan and every modification of any of them proposed for use in this state;
626.09(1)(f)
(f) To assist the commissioner and insurers in the promotion of safety in industry; and
626.09(1)(g)
(g) To assist in any matter necessary for the accomplishment of these purposes.
626.09(2)
(2) Licensing. The bureau's license which it holds under s.
205.03 (2), 1973 stats., immediately prior to January 17, 1976 shall continue as its license under
s. 625.32, and thereafter the bureau shall be treated as if it had applied for and had received a license under
s. 625.32.
626.09 History
History: 1975 c. 148;
1979 c. 102 s.
237.
626.11(1)(1)
General. Rates determined under this chapter shall not be excessive, inadequate or unfairly discriminatory.
626.11(2)
(2) Excessiveness. Rates determined under this chapter are not excessive merely because a reasonable margin is allowed for a profit.
626.11(3)
(3) Adequacy. The commissioner shall approve a minimum adequate pure premium for each classification under which worker's compensation insurance is written. No insurer writing any insurance specified under
s. 626.03 may use a pure premium less than that approved by the commissioner.
626.11 History
History: 1975 c. 148,
199.
626.12
626.12
Rating methods. In determining whether rates comply with the standards under
s. 626.11, the following criteria shall be applied:
626.12(1)
(1) Basic factors in rates. Due consideration shall be given to past and prospective loss and expense experience within and outside this state, to catastrophe hazards and contingencies, to a reasonable margin for profit, to dividends, savings or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members or subscribers, and to all other relevant factors.
626.12(2)
(2) Classification. Risks may be classified in any reasonable way for the establishment of rates and minimum premiums. Classification rates may be modified to produce rates for individual risks in accordance with rating plans which establish standards for measuring variations in hazards or expense provisions, or both. Such standards may measure any differences among risks that can be demonstrated to have a probable effect upon losses or expenses.
626.12(3)
(3) Physical impairment. Rates or rating plans may not take into account the physical impairment of employes. Any employer who applies or promotes any oppressive plan of physical examination and rejection of employes or applicants for employment shall forfeit the right to experience rating. If the department of industry, labor and job development determines that grounds exist for such forfeiture it shall file with the commissioner a certified copy of its findings, which shall automatically suspend any experience rating credit for the employer. The department shall make the determination as prescribed in
ss. 103.005 (5) (b) to
(f),
(6) to
(11),
(13) (b) to
(d) and
(16), so far as such subsections are applicable, subject to review under
ch. 227. Restoration of an employer to the advantages of experience rating shall be by the same procedure.
626.12 History
History: 1975 c. 148;
1995 a. 27 ss.
7037,
9130 (4).
626.125
626.125
Qualified loss management program. 626.125(1)
(1)
Elements of program. The bureau may file with the commissioner under
s. 626.13 a qualified loss management program that contains all of the following elements:
626.125(1)(a)1.1. Subject to
subd. 2., the bureau shall restrict eligibility for participation in the qualified loss management program to an employer that has obtained any insurance specified in
s. 626.03, that is eligible for an experience rating under
s. 626.12 (1), that is eligible for coverage under a mandatory risk-sharing plan under
s. 619.01 (1) and that, as of July 1, 1995, has a rate of not less than $10 on the risk classification that generates the most manual premium for that employer.
626.125(1)(a)2.
2. Notwithstanding
subd. 1., the bureau may broaden eligibility for participation in the qualified loss management program to an entire specific classification of employers that have obtained any insurance specified in
s. 626.03 and that are ineligible for coverage under a mandatory risk-sharing plan under
s. 619.01 (1) if the bureau determines that permitting that entire specific classification of employers to participate in the qualified loss management program is necessary to support the effective delivery of safety training to a high-risk industry.
626.125(1)(b)
(b) The bureau shall grant a prospective premium credit to an eligible employer that subscribes to a loss management action plan prepared by a loss management firm approved under
sub. (2) that specifies the activities that the eligible employer will perform to reduce its loss experience.
626.125(1)(c)
(c) The bureau shall base the initial prospective premium credit granted to an eligible employer on the qualifications of the loss management firm that prepared the loss management action plan subscribed to by the eligible employer and on the improvement in the loss experience of the eligible employer anticipated by the bureau, in accordance with generally accepted actuarial principles, as a result of the loss management action plan.
626.125(1)(d)
(d) The bureau shall base subsequent prospective premium credits granted to an eligible employer on the aggregate loss experience of all eligible employers served by the loss management firm serving the eligible employer.
626.125(1)(e)
(e) The bureau shall adjust the prospective premium credits granted under
pars. (c) and
(d) to reflect any credits granted under
s. 626.12 (1) as a result of the same improved loss experience.
626.125(2)
(2) Approval of loss management firms. The bureau may approve a loss management firm for the purpose of preparing loss management action plans for eligible employers if the loss management firm demonstrates an ability to reduce the worker's compensation loss experiences of its clients and if the loss management firm submits a loss management program that is approved by the bureau. In reviewing the qualifications of a loss management firm, the bureau shall consider the training, experience and qualifications of the loss management firm's key personnel and the loss management firm's approach to focussing the attention of its clients on the issue of safety and to assuring and measuring the commitment of its clients to implementing safe work practices. In reviewing the loss management program of a loss management firm, the bureau shall consider the program's plan of action and techniques for assisting an injured employe in obtaining medical care, for continuing communication with the employe and monitoring his or her progress during the recuperation period and for encouraging an injured employe to return to work as soon as possible.
626.125(3)
(3) The bureau shall report annually to the commissioner and the secretary of industry, labor and job development on the status of the program under this section. The report shall include an evaluation of the degree of success achieved by each loss management firm approved under
sub. (2) in reducing the worker's compensation loss experience of its clients participating in the program.
626.125(4)
(4) This section does not apply after December 31, 1997.
626.125 History
History: 1995 a. 27 s.
9130 (4);
1995 a. 117.
626.13
626.13
Approval of rates and rating plans. The bureau shall file with the commissioner on behalf of its members every manual of classifications, rules and rates, every rating plan and every modification of any of them proposed for use in this state. Every such filing shall state its proposed effective date. The bureau shall also file the information upon which it supports the filings. All filings must comply with the law and shall not be effective nor used until approved by the commissioner. A filing that has been on file for 30 days is deemed to meet the requirements of
ss. 626.11 and
626.12 unless the commissioner earlier disapproves in a written order.
626.13 History
History: 1975 c. 148.
626.14
626.14
Filings open to inspection. Section 625.14 applies to rates filed under this chapter.
626.14 History
History: 1975 c. 148.
626.22
626.22
Disapproval of rates. 626.22(1)
(1)
Order in event of violation. If the commissioner finds after a hearing that a filing already in effect under
s. 626.13 fails to meet the requirements of the law, the commissioner shall order that its use be discontinued for any policy issued or renewed after a date specified in the order.
626.22(2)
(2) Timing of order. The commissioner shall issue an order under
s. 626.13 within 30 days after the filing and issue an order under
sub. (1) within 30 days after the close of the hearing. In either case the commissioner may extend the period for a reasonable time by written order prior to the expiration of the time limit.
626.22(3)
(3) Interim rates. Whenever an insurer has no legally effective rates as a result of an order by the commissioner under
s. 626.13 or
sub. (1), the commissioner shall on request specify interim rates for the insurer and may order that a specified portion of the premiums be placed in an escrow account approved by the commissioner. When new rates become legally effective, the commissioner shall order the escrowed funds or any overcharge in the interim rates to be distributed appropriately, except that refunds that are trifling shall not be required.
626.22 History
History: 1975 c. 148,
199;
1979 c. 110.
626.25(1)(1)
Approval required. No insurer writing any insurance specified under
s. 626.03 may use a rate, rating plan or classification nor an expense loading not approved by the commissioner.
626.25(2)
(2) Unfair discrimination. No insurer writing any insurance specified under
s. 626.03 may make or charge any rate which discriminates unfairly between risks or classes, nor discriminates unfairly between risks in the application of rating plans, nor discriminates by granting to any employer insurance against other hazards except in accordance with its rates and rating plans filed and which are in effect for the insurer under
ch. 625 nor at less than its legal rates for the insurance if that chapter is inapplicable.
626.25 History
History: 1975 c. 148.
626.31
626.31
Operation and control of bureau. 626.31(1)(a)(a)
Organization. The bureau shall make bylaws for its government which, with amendments thereto, shall be filed with and approved by the commissioner before they are effective.
626.31(1)(b)
(b)
Representation. The rating committee shall consist of 10 members. Two members of the rating committee shall represent noninsurer, employer interests and shall be appointed by and serve at the pleasure of the governor. Of the remaining 8 members, 4 shall be chosen by stock insurers and 4 by mutual insurers. Both stock and mutual insurers shall be represented equally on all other committees, including the managing committee. Each member of a committee shall have one vote, with the commissioner deciding the matter in the event of a tie.
626.31(1)(c)
(c)
Charges and services. The services of the bureau shall be supplied to members without discrimination. Each member of the bureau shall pay an equitable share of the cost of operating the bureau.
