COMPENSATION RATING AND INSPECTION BUREAU MANUAL AMENDMENT BULLETIN #468

Transcription

1 COMPENSTION RTING ND INSPECTION UREU 60 PRK PLCE NEWRK, NEW JERSEY (973) FREDERICK. HUER Executive Director PUL G. WITKO, ESQ. ssociate Executive Director General Counsel June 4, 2015 MNUL MENDMENT ULLETIN #468 To ll ureau Members and Subscribers: Re: Changes to Manual Rules and New Jersey Forms Effective July 1, 2015 The Commissioner of anking and Insurance has approved the following changes to the New Jersey Workers Compensation and Employers Liability Insurance Manual ( Manual ). The changes to the Manual are shown in italics and bold. MNUL RULES Manual Rule 3:3-33 is amended to eliminate the exceptions of stevedore classifications (codes 7309 and 7327) from application of the overtime rule. dvancement in payroll and recordkeeping technology in recent years allows for the delineation of standard wage rates from overtime pay and negates the need for the exceptions. Sections 3:3-77, 3:10-3, 3:12-1, 3:12-8 and 3:12-21(1) of the Manual are amended to replace references to Large Construction or Long-Term Construction Project(s) with Wrap-Up Construction Project(s). Further, the Notice of Election of Retrospective Rating Plan is revised to reflect the reference to Wrap-Up Construction Projects. The term Wrap-Up Construction Project is more commonly used nationally. The changes to Manual rules are attached as Exhibit I and the revised Notice of Election is attached as Exhibit II. NEW JERSEY FORMS In 2010, the Rating ureau adopted the national Retrospective Rating Plan Premium Endorsement for Wrap-Up Construction Project (WC C). The national form was adopted to provide uniformity with other jurisdictions and to replace the state specific New Jersey Retrospective Premium Endorsement Long-Term Construction Project (WC ). In order to establish consistency with the national approach, the Rating ureau will withdraw the New Jersey Retrospective Premium Endorsement Long-Term Construction Project (WC ).

2 C.R.I Effective July 1, 2015 The Index Policy Forms and Endorsements pplicable in New Jersey has been amended to eliminate the New Jersey Retrospective Premium Endorsement Long-Term Construction Project (WC ). The revised Index is attached as Exhibit III. Respectfully submitted, Frederick. Huber Executive Director FH:nl tt.

3 C.R.I Effective July 1, 2015 mend 3:3-33 as follows: EXHIIT I 33. Treatment of Overtime Remuneration. If the employer s books and records are maintained so as to show separately, by employee and in summary by class of work, (a) the extra remuneration earned for overtime in excess of the remuneration which would have been earned for such overtime had the regular rate of pay applied, or (b) the total remuneration for overtime for those hours worked at increased rates of pay, the remuneration upon which the premium for the policy is based shall exclude, respectively, (i) (ii) all of the remuneration in (a) above, or one-third of the remuneration shown in (b) or, where double time is paid for overtime and the remuneration therefore is shown separately, one-half of the remuneration at double time. (c) For the purpose of this rule Overtime shall mean those hours worked for which there is an increase in the rate of pay, (i) for work in any day or in any week in excess of the number of hours normally worked but in any event for hours worked in excess of eight hours in any day or forty hours in any week, or (ii) for work performed on Saturdays, Sundays, or holidays. Provided, however, that in the case of guaranteed wage agreements under which the employee receives a guaranteed wage for actually working any number of hours up to a specified number of hours per week, Overtime shall include only those hours worked in excess of such specified number. Exceptions: This rule (3:3-33) is not applicable in connection with the stevedoring classifications. Codes 7309, 7317, 7323 and MENDED DELETE

4 C.R.I Effective July 1, 2015 EXHIIT I (Cont d) mend 3:3-77 as follows: 77. Combination of Policies. (a) Separate policies issued to cover a risk by a single carrier or by two or more carriers under the same management shall be combined for the application of premium discount. If such separate policies are written with varying expiration dates, combination for discount shall be made as required by (i), (ii), and (iii) below, unless the insured instructs the carrier to the contrary: (i) The Rating ureau shall determine an anniversary date upon which the application of the Discount Plan shall become effective. Such anniversary date shall be fixed with due consideration to the effective date of the several policies involved. (ii) ll policies effective prior to the anniversary date shall be canceled as of the anniversary date and rewritten for the term of the rating period. (iii) ll policies effective subsequent to the anniversary date shall be written to expire concurrently with the next anniversary date or canceled as of the next date. (b) Large Construction Project. Separate policies issued by a single carrier to cover two or more entities engaged in a single construction, erection or demolition project, where such policies limit the coverage to employments at and from such project, shall be combined for premium discount subject to the following conditions: (i) (ii) Such entities shall be limited to (1) the owner or principal and general contractor, and (2) subcontractors performing work on such project under contracts let on an ex-insurance basis. If the contract between the owner or principal and such general con tractor is not on an ex-insurance basis, the owner or principal shall not be an eligible entity under this rule. The estimated total standard premium with respect to project work to be done by the entities involved is $1,000,000 or more. MENDED 77. Combination of Policies. (b) Wrap-Up Construction Project. Separate policies issued by a single carrier to cover two or more entities engaged in a single construction, erection or demolition project, where such policies limit the coverage to employments at and from such project, shall be combined for premium discount subject to the following conditions:

5 C.R.I Effective July 1, 2015 EXHIIT I (Cont d) (iii) The project is confined to operations at a single location. In connection with the building of roadways, tunnels, waterways or surface or underground conduits, the entire job or sections of the job shall be considered a single location if the construction work is performed by a single general contractor for a single owner or principal. (iv) The project is of definite duration involving work to be performed continuously to completion. MENDED (v) ll such policies shall contain a common expiration date. (vi) The carrier shall notify the Rating ureau in letter form of all the particulars including, but not limited to, the project site, the names of the owner or principal and general contractor, the basis upon which the combined total standard premium is estimated at $1,000,000 or more and the anticipated completion date of the project. Further, for each qualifying subcontractor the carrier shall notify the Rating ureau, in letter form accompanying the filing of coverage required by 3:3-6 of this Manual, of the participation of such sub contractor in the project.

6 C.R.I Effective July 1, 2015 mend 3:10-3 as follows: EXHIIT I (Cont d) 3. pplication. The application of a Large Risk Large Deductible Program is dependent on the mutual agreement between the insurer and the insured. The term of the Program is the same as the period of the policy or policies to which it applies and is effective no more than one year. The deductible applies to indemnity and medical benefits under Part One of the policy, benefits or damages under Part Two, payments under Part Three and also allocated loss adjustment expense, if elected. The deductible applies to each accident for bodily injury by accident and to each employee for bodily injury by disease. The deductible can also apply to each person/each occurrence if this option is elected. policy period aggregate limit may be elected by agreement between the insurer and the insured. n occurrence aggregate can also be elected by agreement between the insurer and the insured if the per person/per occurrence option is elected. The policy period aggregate limit may be a percentage of the audited standard premium if the Large Risk - Large Deductible ggregate Limit Option is elected at policy inception. Each policy to which this operation applies should include the New Jersey Large Risk - Large Deductible ggregate Limit Endorsement and either the New Jersey Large Risk - Large Deductible Endorsement or the New Jersey Large Risk Large Deductible Endorsement Per Person asis. Exception: Large Construction Projects. Where separate policies are issued by a single carrier to cover two or more entities engaged in a single construction or demolition project, where such policies limit the coverage to employments at and from such project, the insured shall mean all such entities subject to the Large Risk Large Deductible Program and the following conditions: (a) The entities shall be limited to (1) the owner or principal and general contractor, and (2) subcontractors performing work on such project under contracts let on an ex-insurance basis. If the contract between the owner or principal and such general contractor is not an ex-insurance basis, the owner or principal shall not be an eligible entity under this rule. MENDED Exception: Wrap-Up Construction Projects. Where separate policies are issued by a single carrier to cover two or more entities engaged in a single construction or demolition project, where such policies limit the coverage to employments at and from such project, the insured shall mean all such entities subject to the Large Risk Large Deductible Program and the following conditions:

7 C.R.I Effective July 1, 2015 EXHIIT I (Cont d) (b) The estimated total standard premium with respect to project work to be done by the entities involved shall be $1,000,000 or more. (c) The project shall be confined to operations at a single New Jersey location. In connection with the building of roadways, tunnels, waterways or surface or underground conduits, the entire job or sections of the jobs shall be considered a single location if the construction work is per formed by a single general contractor or a single owner or principal. (d) The project shall be of definite duration involving work to be performed continuously to completion. (e) ll such policies shall contain a common expiration date and the appropriate New Jersey Large Risk Large Deductible Endorsement. (f) Within sixty days after the Large Risk Large Deductible date, the carrier shall provide this ureau with the particulars of the project. However, the filing of the New Jersey Large Risk Large Deductible Program Notice of Election is not necessary for Large Construction Projects. To determine all the information required, contact this ureau. MENDED (f) Within sixty days after the Large Risk Large Deductible date, the carrier shall provide this ureau with the particulars of the project. However, the filing of the New Jersey Large Risk Large Deductible Program Notice of Election is not necessary for Wrap-Up Construction Projects. To determine all the information required, contact this ureau.

8 C.R.I Effective July 1, 2015 mend 3:12-1 as follows: 1. Optional Retrospective Rating Plan. This Retrospective Rating Plan is optional and may be used upon election by the insured and acceptance by the insurance carrier. The completed Notice of Election of Retrospective Rating must be filed with the ureau within sixty days after the effective date of the rating period. The Notice appears as Form NJRR-2 at the end of this Section. The signature of the insured is optional on the Notice of Election. One or Three Year Rating Period Retrospective rating applies on either an intrastate or interstate basis to Workers Compensation and Employers Liability Insurance. It is available on a one or three year rating period to any insured, as defined in paragraph 8, with estimated annual standard premium of at least $25,000. Retrospective Rating is available for Large Construction Projects if the estimated total standard premium for the project is at least $1,000,000. The rules pertaining to Large Construction Projects are included under the exception to paragraph 8. The Large Risk lternative Rating Option is an optional form of Retrospective Rating that allows the insured and the carrier to mutually agree to the rating values to be used to calculate premium. It is available to any insured, as defined in paragraph 8, with estimated annual workers compensation and employers liability standard premium of $100,000 of New Jersey or countrywide premium, or in any combination with any other commercial casualty line of insurance for the rating term. The rules pertaining to the Large Risk lternative Rating Option are included under the exception to paragraph 7. Long-Term Rating Period Long-Term Construction Project. retrospective rating period equal to the duration of a construction or demolition project at a single location in New Jersey is available where the average annual standard premium is estimated at $100,000 or more for the project. Road projects, continuous to completion, shall be construed as meeting the qualification of a single location. letter describing the project shall accompany the Notice of Election. series of one year policies shall be written for each long-term construction project. Large Construction Projects and the Large Risk lternative Rating Option may qualify for this long-term retrospective rating period. EXHIIT I (Cont d) MENDED Retrospective Rating is available for Wrap-Up Construction Projects if the estimated total standard premium for the project is at least $1,000,000. The rules pertaining to Wrap-Up Construction Projects are included under the exception to paragraph 8. Long-Term Rating Period Wrap-up Construction Project. retrospective rating period equal to the duration of a construction or demolition project at a single location in New Jersey is available where the average annual standard premium is estimated at $100,000 or more for the project. Road projects, continuous to completion, shall be construed as meeting the qualification of a single location. letter describing the project shall accompany the Notice of Election. series of one year policies shall be written for each wrap-up construction project. Wrap-Up Construction Projects and the Large Risk lternative Rating Option may qualify for this long-term retrospective rating period.

9 C.R.I Effective July 1, 2015 mend 3:12-8 as follows: EXHIIT I (Cont d) 8. Definition of Insured. For retrospective rating purposes, insured means the employer named in item 1 of the Information Page in the policy or policies to which this Plan is applied. For New Jersey exposures the name of the employer must meet the requirements of the definition of a risk in 3:1-8 of this Manual. Exception: Large Construction Projects. Where separate policies are issued by a single carrier to cover two or more entities engaged in a single construction or demolition project in New Jersey, where such policies limit the coverage to employments at and from such project, the insured shall mean all such entities subject to the Retrospective Rating Plan and the following conditions: a) The entities shall be limited to (1) the owner or principal and general contractor, and (2) sub contractors performing work on such project under contracts let on an exinsurance basis. If the contract between the owner or principal and such general contractor is not on an ex-insurance basis, the owner or principal shall not be an eligible entity under this rule. b) The estimated total standard premium with respect to project work to be done by the entities involved shall be $1,000,000 or more. c) The project shall be confined to operations at a single New Jersey location. In connection with the building of roadways, tunnels, waterways or surface or underground conduits, the entire job or sections of the job shall be considered a single location if the construction work is per formed by a single general contractor for a single owner or principal. d) The project shall be of definite duration involving work to be performed continuously to completion. MENDED Exception: Wrap-Up Construction Projects. Where separate policies are issued by a single carrier to cover two or more entities engaged in a single construction or demolition project in New Jersey, where such policies limit the coverage to employments at and from such project, the insured shall mean all such entities subject to the Retrospective Rating Plan and the following conditions:

10 C.R.I Effective July 1, 2015 EXHIIT I (Cont d) e) ll such policies shall contain a common expiration date and the appropriate New Jersey Retrospective Premium Endorsement and also the New Jersey Premium Discount Endorsement if any part of the premium to be developed under the policies is excluded from retrospective rating. f) Within sixty days after the retrospective rating date, the carrier shall provide this ureau with the particulars of the project, including the filing of the Notice of Election of Retrospective Rating. To determine all the information required, contact this ureau. MENDED

11 C.R.I Effective July 1, 2015 mend 3:12-21(1) as follows: EXHIIT I (Cont d) (1) Estimated nnual Standard Premium. This is the estimated annual Workers Compensation standard premium for the insurance in the Retrospective Rating agreement. The calculation process in the example requires the estimated annual standard premium in item (1) whether the rating period is for one or three years or for the duration of a long-term construction project. If a three year or long-term rating period is elected, note that the estimated annual standard premium is used to produce item (7) and the annual estimate multiplied by 3 (years), or the number of years of the long-term construction project would serve as the basis for the expected loss group in 9b to determine the insurance charge in 18 for the elected minimum and maximum premium factors in items (a) and (b) in the example above. MENDED (1) Estimated nnual Standard Premium. This is the estimated annual Workers Compensation standard premium for the insurance in the Retrospective Rating agreement. The calculation process in the example requires the estimated annual standard premium in item (1) whether the rating period is for one or three years or for the duration of a wrap-up construction project. If a three year or long-term rating period is elected, note that the estimated annual standard premium is used to produce item (7) and the annual estimate multiplied by 3 (years), or the number of years of the wrap-up construction project would serve as the basis for the expected loss group in 9b to determine the insurance charge in 18 for the elected minimum and maximum premium factors in items (a) and (b) in the example above.

12 C.R.I Effective July 1, 2015 EXHIIT II NOTICE OF ELECTION OF RETROSPECTIVE RTING PLN The undersigned certify that the named insured has elected the use of the Retrospective Rating Plan as detailed below. It is also certified that the insured understands all terms, conditions and provisions of the Plan, including the method of premium computation, payment, and penalties for cancellation. The Plan shall apply to all policies indicated below effective 1. Name of Insured 2. ddress of Insured 3. Policy Number(s) Effective Date(s) 4. Indicate: 5. Standard Premium:. Minimum Premium Factor. New Jersey Workers Compensation. Maximum Premium Factor. Countrywide Workers Compensation C. Loss Conversion Factor C. Other Commercial Casualty Insurance 6. Term of Plan (Indicate or ). 1 Year or. 3 Year 7. Type of Plan (Indicate,, C or D). Retrospective Rating. NJ Wrap-Up Construction Project (enter details in 11) C. Large Risk lternative Rating Option excluding llocated Loss djustment Expense D. Large Risk lternative Rating Option including llocated Loss djustment Expense 8. Loss Limitation (if applicable) 9. Do Retrospective Development Factors apply? Yes No 10. States to which Plan applies 11. Indicate any special conditions which apply to the Plan elected for this insured: Name of Carrier Signature of Carrier Date Signature of Insured Date NJRR-2 (7/1/15) Compensation Rating and Inspection ureau

13 C.R.I Effective July 1, 2015 EXHIIT III INDEX POLICY FORMS ND ENDORSEMENTS PPLICLE IN NEW JERSEY STNDRD IDENTIFIER VERSION IDENTIFIER± Workers Compensation and Employers Liability Insurance Policy...WC Information Page (With New Jersey Requirements)...WC FEDERL COVERGES ND EXCLUSIONS Defense ase ct Coverage Endorsement...WC Federal Employers' Liability ct Coverage Endorsement...WC Longshore and Harbor Workers' Compensation ct Coverage Endorsement...WC Outer Continental Shelf Lands ct Coverage Endorsement...WC New Jersey Voluntary Compensation Federal Employers' Liability ct Coverage Endorsement...WC MRITIME COVERGES ND EXCLUSIONS Maritime Coverage Endorsement...WC Voluntary Compensation Maritime Coverage Endorsement...WC C C OTHER COVERGE ND EXCLUSIONS lternate Employer Endorsement...WC Designated Workplaces Exclusion Endorsement...WC Insurance Company as Insured Endorsement...WC Joint Venture as Insured Endorsement...WC Rural Utilities Service Endorsement...WC New Jersey Workers Compensation and Employers Liability Coverage for Residence Employees Endorsement...WC New Jersey Employee Leasing Labor Contractor Endorsement...WC New Jersey Employee Leasing Client Exclusion Endorsement...WC New Jersey Employee Leasing Labor Contractor Exclusion Endorsement...WC New Jersey Part Two Employers Liability Endorsement...WC New Jersey Sole Proprietor and Partners Coverage Endorsement...WC New Jersey Limited Other States Insurance Endorsement...WC New Jersey Workers Compensation Insurance Plan Eligibility Endorsement...WC PREMIUM nniversary Rating Date Endorsement...WC Experience Rating Modification Factor Endorsement...WC Pending Rate Change Endorsement...WC Policy Period Endorsement...WC Rate Change Endorsement...WC Premium Due Date Endorsement...WC Catastrophe (Other than Certified cts of Terrorism) Premium Endorsement...WC Terrorism Risk Insurance Program Reauthorization ct Disclosure Endorsement...WC New Jersey pproved Managed Care Program Endorsement...WC New Jersey Construction Classification Premium djustment Endorsement...WC New Jersey Premium Discount Endorsement: Schedule Y...WC New Jersey Premium Discount Endorsement: Schedule X...WC D RETROSPECTIVE PREMIUM Retrospective Rating Plan Premium Endorsement One Year Plan...WC Retrospective Rating Plan Premium Endorsement Three Year Plan...WC Retrospective Rating Plan Premium Endorsement Wrap-Up Construction Project...WC Retrospective Premium Endorsement viation Exclusion...WC Retrospective Premium Endorsement Changes...WC Retrospective Rating Plan Premium Endorsement Nonratable Catastrophe Element or Surcharge...WC Retrospective Premium Endorsement Short Form...WC Retrospective Rating Plan Premium Endorsement Large Risk lternative Rating Option (LRRO)...WC New Jersey Retrospective Premium Endorsement Part Two Employers Liability Insurance Excess Exclusion...WC New Jersey Large Risk Large Deductible Endorsement...WC New Jersey Large Risk Large Deductible Retrospective djustment Endorsement...WC New Jersey Large Risk Large Deductible ggregate Limit Endorsement...WC New Jersey Large Risk Large Deductible Retrospective Per Person asis...wc OTHER Policy Information Page Endorsement...WC New Jersey Participating Provisions Endorsement...WC NEW JERSEY NOTICES New Jersey Notice of Cancellation...Form 116- New Jersey Notice of Reinstatement...Form 117- New Jersey Posting Notice...Form 16NJ New Jersey Posting Notice (Spanish)...Form 17NJ New Jersey Notice of Election Proprietors and Partners Workers Compensation and Employers Liability Insurance...Form PP-1 New Jersey Transmittal Letter...Form TL-1 C C C C ± bsence of a version identifier denotes original printing New, revised or deleted forms