October 11, 2001

 

   CIRCULAR LETTER #173 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 1/1/2002

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, 2002. 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 decrease of 0.7% 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                    2.4%  increase

Contracting                       2.1%  decrease

Office & Clerical               0.7%  decrease

Goods & Services             2.1%  decrease

Miscellaneous                    1.5%  decrease

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, 2001 rates.                                                                              

Manufacturing            from 27% above to 23% below

Contracting                     from 23% above to 27% below

Office & Clerical            from 24% above to 26% below

Goods & Services            from 23% above to 27% below

Miscellaneous                  from 24% above to 26% below

 

 

                   -2-

 

The classifications which have been limited are:

List of Classifications Limited by Upper Swing

0908   0909   2065   2157   3018   3548   4361   4568

4828   4829   7050   7099   7398   7421   8720   8745

  List of Classifications Limited by Lower Swing

3507   7016   7024   7394   7395   8015   8045

 

 

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 AUnited States Longshoremen=s and Harbor Workers= Act@ of the Basic Manual for Michigan Workers= Compensation Placement Facility is 82%, applicable to new and renewal business. As a multiplier, the percentage increase is 1.82 (rate multiplied by 1.82).

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) 1.036

B. Federal Classes, or Non-F classes

where rate is increased by the

USL & HW Act percentage                                1.082

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 ATaxicab Company - Drivers@ increases to $24,000.

4.            Remuneration for Executive Officers

The new weekly payroll amount for corporate officers and active members of limited liability             companies is $357 for the minimum weekly payroll assumption and $1,400 is the maximum.