Q:  At the WV Wood Summit, the WV Insurance Commission representative incorrectly stated that nine companies were writing WC in WV.  From a practical point of view, how many insurance companies are writing coverage for the 2702 and 2709 logging classifications? 

A:  At the time of presentation for the WV Wood Summit, the coverage data reflected there were nine carriers writing all logging industrial classes including 2701, 2702, 2709 and 2710. By February 4, 2014, the data confirms there were three voluntary market carriers writing 116 total policies with a governing class of 2702 or 2709. There were 64 policies with a governing class of 2702 or 2709 in the residual market. Based on these numbers, 64 percent of logging policies are written by voluntary market carriers.  

Q:  What are the criteria that allows any carrier to use different tiers of pricing; i.e., is it within the scope of your office provide the filing by each Workers Compensation carrier - if not, where do we get this information?

A:  Generally, carriers use rating tiers to more accurately price a policy. The criteria for tier placement may include loss ratio percentages, hazard groups or classifications, experience rating factors, years in business, etc. Carriers have varying criteria for tier placement as well as other premium components to offer flexibility to the carrier and the policyholder to ensure adequate pricing is achieved. The West Virginia Offices of the Insurance Commissioner provides a public kiosk for all public carrier filings. The kiosk is located at 1124 Smith Street in Charleston, WV. Please call 304-558-2094 for more information and assistance.

Q:  How/where can we view documentation that these carriers are using tiers fairly/consistently across the state?

 

A:  The Insurance Commissioner performs market conduct reviews of carriers which include compliance with state laws and regulations as well as many carrier specific filing parameters. However, it is most important for a policyholder to work with their agent to ensure the tier or rate the policyholder is paying is appropriate for the exposure of the policy. It is the agent’s duty to fully inform employers of what the coverage encompasses and how it is rated.  

Q:  Are Workers Compensation rates based on each employee’s job classification, or is there just one rate for all employees of a logging company; i.e., does a secretary or truck driver or mechanic cost the same as a chain saw operator? Moreover, are professional consulting foresters who plan and inspect timber harvests being classified as "loggers" relative to WV workers compensation classifications?

A:  A West Virginia workers’ compensation policy does allow for separation of payroll among a business. Clerical or secretarial work may be separated and put into the 8810 classification as long as the job duties meet the specifications for that class. Additionally, truck drivers may be classified into 2701 - LOGGING OR TREE REMOVAL—LOG HAULING & DRIVERS as long as the job duties meet the specifications for that class. Consulting foresters, surveyors and timber inspectors are generally included in the logging classification unless they are a separate and distinct business and not in support of an entity’s principal business. It is important to understand that when a classification allows for the separation of payroll, wage records must be kept separate and concise for the audit process.  An agent will be able to identify which classifications are applicable to a logging policy based on individual employer business operations.  

Q:  Is it necessary to move small companies to the high risk pool (thereby, greatly increasing their WC rates) for late payments, just by being a small company - unrelated to other administrative issues, claims or losses?

A:  Voluntary market carriers have varying criteria on whether they will write a policy. If a policyholder does have a history of financial instability, including late payments, a carrier may choose to not cover the employer due to the administrative costs of trying to recover and/or secure premium payments.

It is important to note that oftentimes the residual market does not "greatly increase" a premium. For instance, if an employer is in a carrier’s higher tier for rating purposes, the premium differences may not be substantially different.