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CIRCULAR LETTER NO. 164
TO ALL PARTICIPANTS IN
THE MICHIGAN WORKERS’ COMPENSATION PLACEMENT FACILITY
Regarding Assigned Risk Rates and Rating Values for the Michigan Workers’
Compensation Placement Facility - Effective 1/1/2001
Applicable to New and Renewal Policies Only
Dear Member:
Attached are copies of the rate sheets and rating values which will be applicable to new and renewal Assigned Risk policies having effective dates on or after January 1, 2001. There is no application to outstanding policies.
It is imperative that the agents throughout the state have this rating information, so please arrange to place copies with agents representing your firm. These rates are now available via the Internet on our web site @ www.caom.com. The revision represents an average increase of 1.2% in overall rate level for the residual market. The rate changes are determined by using weighted averages of 80% statewide experience and 20% Facility experience.
By industry group, the changes are as follows:
Manufacturing 2.0% increase
Contracting 0.6% increase
Office & Clerical 2.9% increase
Goods & Services 0.1% decrease
Miscellaneous 1.8% increase
Specific classifications within each industry class may vary from the average depending upon the volume and character of the particular classification experience.
Swing limits have been applied which operate to hold individual class rates to the following maximum movement from January 1, 2000 rates.
Manufacturing from 27% above to 23% below
Contracting from 26% above to 24% below
Office & Clerical from 28% above to 22% below
Goods & Services from 25% above to 25% below
Miscellaneous from 27% above to 23% below
The classifications which have been limited are:
List of Classifications Limited by Upper Swing
0908 0909 1164 2065 2660 5057 5223 7421 7904 8013 8745
List of Classifications Limited by Lower Swing
1005 7422
Miscellaneous Values
1. United States Longshoremen’s and Harbor Workers’ Compensation Coverage Percentage
Due to the benefit provisions of federal and state laws, the United States Longshoremen's and Harbor Workers' Compensation coverage percentage applicable only in connection with Rule XI - D-3 "United States Longshoremen's and Harbor Workers' Act" of the Basic Manual for Michigan Workers' Compensation Placement Facility is 88%, applicable to new and renewal business. As a multiplier, the percentage increase is 1.88 (rate multiplied by 1.88).
2. Retrospective Rating Plan Tax Multiplier
Due to the change in the Miscellaneous Tax and in the Secondary Injury Fund, the Silicosis and Dust Disease Fund, and the Occupational Safety Fund Assessment, the tax multipliers used in connection with retrospective ratings are:
A. State (Non-F Classes) 1.025
B. Federal Classes, or Non-F classes
where rate is increased by the
USL & HW Act percentage 1.047
These factors are applicable to new and renewal policies.
3. Basis of Premium
Basis of Premium applicable in accordance with the footnote instructions for Code 7220 "Taxicab Company - Drivers" remains at $21,600.
4. Remuneration for Executive Officers
The weekly payroll amount for corporate officers and active members of limited liability companies remains the same at $322 for the minimum weekly payroll assumption and $1,300 is the maximum.
5. Expense Constant
The Expense Constant applicable in accordance with Basic Manual Rule VI-D-2 remains at $180.
6. Minimum Premiums
The Maximum Minimum Premium remains at $700. The Minimum Premium multiplier remains at 115.
Example: Manual Rate = $4.52 x 115 = $520 + $180 = $700
(Manual Rate) x (Multiplier) + (Expense Constant) = Minimum Premium
The revision of rates and rating values was approved for use in the Facility and is applicable to all Facility policies with new or renewal dates of January 1, 2001 or later.
Yours truly,
Jerry J. Stage
President
JJS/mec
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