Table Of ContentMontanaStateLibrary
3 0864 1005 1876 3
dATE
COMPENSATION
INSURANCE FUND
FUND
POLICY SERVICES
UNDERWRITING MANUAL
STATt DOCUMENTS
COLLECTION
FEB 1 5 1395
MONTANA STATE LIBRARY
",.E.L,EN'A5,15MEO.N6TtAhNAAVE-.SC20
JULY 1, 1993 EDITION
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2111
STATE FUND UNDERWRITING MANUAL
JULY 1993
1,
TABLEOFCONTENTS
GENERALRULES
GENERAL
I.
A. Underwriting r.1
B. EffectiveDates R.1
II. DEFINITIONS
A. Workers'CompensationandOccupationalDisease R-
B. StateCompensationInsuranceFund(StateFund) R-
C. Employer/Insured R-
D. Risk R-
E. PrincipalBusiness R-2
F. SecondaryBusiness R-2
G. PendingEffectiveDate R-2
H. InitialDeposit R-2
I. PolicyPeriod R-2
J. ReportBasis R-2
K. FiscalYear R-2
L. AnniversaryDate R-3
M. AnniversaryRatingDate R-3
N. ClassificationCode R-3
O. Payroll R-3
P. Premium R-3
Q. ClaimLiability R-3
R. PolicyMargin R-3
S. PolicyLossRatio R-3
III. LIMITSOF LIABILITY
A. EntireLiabilityUnderWorkers'Compensation
andOccupationalDiseaseActs R-3
B. DefenseLimits R-3
C. Employer'sLiabilityNotIncluded R-3
IV. INITIALDEPOSIT
A. DefinitionandPurpose R-4
B. PaymentEstablishesCoverageEffectiveDate R-4
C. PaymentMethods R-4
D. PaymentWithDishonoredCheck R-4
E. HeldUntilPolicyCancellation R-4
V. COVERAGES
A. CoveredEmployments R-5
B. ExemptedEmploymentsandCorporateOfficers R-5
C. Assignment/Death R-6
VI. POLICYFORMS
A. Application R-6
B. Policy R-6
C. InitialDepositStatement R-7
STATE FUND UNDERWRITING MANUAL
JULY 1993
1,
D. CoverageDeclarations R-7
E. ClassificationandCodeSchedule R-7
F. Endorsements R-7
G. ApplicationandSurvey R-7
H. Payroll&PremiumReports R-7
VII. CLASSIFICATIONPROCEDURE
A. GeneralExplanation R-7
B. BasicClassifications R-8
C. GoverningClassification R-8
D. StandardExceptions R-8
E. GeneralInclusions R-9
F. GeneralExclusions R-10
G. AssignmentofClassifications R-10
H. PayrollAssignment-MultipleClassifications R-11
I. ClassificationWording R-12
VIII. BASISOFPREMIUM
A. Computation R-13
B. Payroll, RemunerationorEarnings R-13
C. EstimatedPayrolls R-15
D. Overtime R-15
E. CorporateOfficers R-15
F. OwnersandPartners R-16
G. PayrollDivision R-16
H. UninsuredSubcontractor R-17
IX. RATESANDPREMIUM
A. ManualRate R-17
B. ManualPremium R-18
C. ModifedManualPremium(MedicalDeductible) R-18
D. StandardPremium(ExperienceModification) R-19
E. ModifiedStandardPremium(ConstructionIndustryCreditand
ScheduledRating) R-20
F. EarnedPremium R-21
G. MinimumPremium R-21
H. FinalPremium R-21
I. Audit R-21
X. DIVIDENDS
A. BasedonLossExperience R-21
B. PremiumExcess R-22
XI. CANCELLATION
A. CeasedOperations R-22
B. TransferCoveragetoAnotherCarrier R-22
C. NoEmployeesForWhichCoverageIsRequired R-22
D. ChangeofOwnershiporSaleofBusiness R-23
E. Forced R-23
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STATE FUND UNDERWRITING MANUAL
JULY1, 1993
INDEX
AircraftOperation R-10,R-17
AircraftTravel R-9
"All" R-12
AnniversaryDate R-3
AnniversaryRatingDate R-3
Audit R-21
B
BasicClassifications R-8,R-10
BasisofPremium R-13
Binder R-5, R-6
Bonuses R-13
C
CafeteriaPlans R-13
Cancellation R-22
ChainSaws R-14
ChauffeursandHelpers R-8, R-12
ClassificationAssignment R-10
ClassificationEffectiveDate R-1
ClassificationHeadings R-12
ClassificationNotes R-12
ClassificationProcedure R-7
ClassificationWording R-12
ClericalOfficeEmployees R-8,R-12
Collectors R-9,R-12
CombinedEntities(forexperiencemodification-StandardPremium) R-19
Commissaries R-9, R-10
Commissions R-13
Construction R-9, R-10, R-11,R-17
Construction IndustryCredit(ModifiedStandardPremium) R-20
ContainerManufacturing R-9
Corporation R-1, R-1
CorporateOfficers R-5,R-1
CoverageEffectiveDate R-4
Credits(asearnings) R-13
D
DayCare(EmployerOperated) R-10
DeferredCompensationPlans R-13
DefenseLimits R-3
Definitions R-1
Deposit, Initial R-2,R-4
» DifferentialPay(forotherthandayshift) R-15
Discount,Volume(EarnedPremium) R-21
STATE FUND UNDERWRITING MANUAL
JULY 1993
1,
DismissalPay R-13
Dividends R-21
DivisibleClassificationCodes R-17
DivisionofPayroll R-16
DraftingEmployees R-8, R-12
DriversandHelpers R-8, R-12
E
EarnedPremium R-3, R-21
Earnings R-13
EffectiveDateofCoverage R-4
EffectiveDateofRules,ClassificationsandRates R-1
Election(CoveredEmployments) R-5
Election(ExemptedEmployments) R-5
EmployeeExpenses R-14
Employer R-1
Employer'sLiability R-3
Equipment R-14
Erection R-9, R-10,R-11, R-17
EstimatedPayroll R-15
ExperienceModification(StandardPremium) R-19
ExperienceTransfer R-19
F
FinalPremium R-21
FiscalYear R-2
G
GeneralExclusions R-10
GeneralInclusions R-9
GoverningClassification R-8
Gratuities R-13
H
HeavyEquipment R-14
HolidayPay R-13
Hospitals R-9
Housing(asearnings) R-13
IncentivePlans R-13
"Includes" R-12
InitialDeposit R-2, R-4
InsurancePlans R-13
Insured R-1
InterchangeofLabor R-11
STATE FUND UNDERWRITING MANUAL
JULY1, 1993
L
-
LimitsofLiability R-3
Lithographing R-9
Lodging R-13,R-14
LumberingBusiness R-10
M
MaintenanceofInsured'sBuildingsorEquipment R-9
ManualPremium R-3,R-18
ManualRate R-1,R-17
Meals R-13,R-14
MedicalDeductible(ModifiedManualPremium) R-18
MedicalFacilities R-9
MercantileBusiness R-11,R-12
Merchandise(asearnings) R-13
Messengers R-9,R-12
Mileage R-14
MinimumPremium R-3,R-21
MiningBusiness R-10,R-12
MiscellaneousEmployees R-11
ModifiedPremium R-3,R-18,R-20
MultipleClassifications R-11
N
NewConstructionorAlteration R-10
"No"or"Not" R-12
"NOC"(NotOtherwiseClassified) R-12
O
"Or" R-12
Overtime R-13, R-15
Owner R-16
OwnershipChange R-19,R-23
P
Partner/Partnership R-16
Payroll R-3,R-13
PayrollDivision R-16
Payroll,Estimated R-15
PendingEffectiveDate R-2
PensionPlans R-13
PassengerVehicle R-14
Piecework R-13
PolicyPeriod R-2
Premium, Basisof R-13
PremiumDiscount(forvolume-EarnedPremium) R-21
PremiumPay(forotherthandayshift) R-15
PrincipalBusiness R-2,R-10,R-11
STATE FUND UNDERWRITING MANUAL
JULY 1993
1,
Printing R-9
ProfitSharing R-13
R
RateCategory(ManualRate) R-17
Rates R-1.R-17
Rejection(CorporateOfficers) R-5
Remuneration R-13
Rent(asearnings) R-13
RepairofInsured'sBuildingsorEquipment R-9
ReportBasis R-2
Restaurants R-9, R-10
RetirementPlans R-13
RewardsforInventionorDiscovery R-13
Risk R-2
S
Salary R-13
Salespersons R-9, R-12
SawmillOperations R-10
ScheduledRating(ModifiedStandardPremium) R-20
SecondaryBusiness R-2, R-10, R-11,R-17
SeverancePay R-13
ShiftDifferential(forotherthandayshift) R-15
SickLeaveBenefitsAccrued R-13, R-14
SickPay R-13
SoleProprietor R-16
StandardExceptions R-8
StandardPremium R-3, R-19
StoreCertificates(asearnings) R-13
Subcontractors(Uninsured) R-17
SubstitutesforMoney R-13
T
TimberFallingExpenses R-14
Tips R-13
"ToBeSeparatelyRated" R-12
TruckingasaSecondaryBusiness R-11,R-17
Trucks R-14
V
VacationBenefitsAccrued R-13, R-14
VacationPay R-13
VehiclesUnderContract R-8
VolumeDiscount(EarnedPremium) R-21
W
Wages R-13
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STATE FUND UNDERWRITING MANUAL R
-
July1, 1993
GENERAL RULES
GENERAL
A. Underwriting
1 This manual ofrules, classificationsand ratesgovernsthe underwritingof
workers' compensationand occupationaldisease insurancebytheMontana
State Compensation Insurance Fund(State Fund).
2. Thegeneral rulesapplytoand controlthewriting ofall State Fund policies.
B. Effective Dates
1 Rulesand rates inthis manual becomeeffectiveat 12:01 a.m. onthedate
specified onthe manual pages andsupercede all previous rulesand rates.
2. Changes in anyruleswill bedesignated byan asterisk(*).
3. Changes inclassificationssubsequentto May7, 1993: effectiveonthe
date specifiedwhenthechange isapproved bythe StateFund Boardof
Directors as indicated byafootnotedesignated byoneormoreasterisks.
DEFINITIONS
A. Workers' Compensationand Occupational Disease: The statutoryobliga-
tion ofan employertoprovidebenefitsforemployees undertheMontana
Workers' Compensation and Occupational DiseaseActs(Title39, Chapter71,
MCAandTitle39, Chapter72, MCA).
»
B. StateCompensation Insurance Fund (State Fund)
1 Astateoperatedworkers' compensation andoccupationaldisease insurer.
2. Alsoknownas Compensation Plan3 underthe MontanaWorkers' Compen-
sation andOccupational DiseaseActs.
C. Employer/Insured
1 Asingle legal entity, asfurtherdefined in 39-71-117(1 MCA, which maybe
an individual, partnership, privateorpubliccorporation,: association,joint
ventureorotherentity.
2. Theentireoperationofeach separate legal entityshall becovered bya
singlepolicy.
3. Apolicyshall notbe issuedto coveronlya portionofthe employer'sopera-
tionoremployees.
.
STATE FUND UNDERWRITING MANUAL
July1, 1993
D. Risk: Theentireoperationofoneemployer.
E. Principal Business: Thebusinesswiththegreatestamountofpayroll, exclud-
ingstandardexception orgeneral exclusion operations.
F. Secondary Business: Anundertakingorenterpriseseparatefromtheprinci-
pal businessofthe insured.
G. Pending Effective Date: Aconditional policyeffectivedatedetermined bythe
date State Fund receives anapprovedapplicationand all payroll reportsand
premiumsfrom anypreviouscoverageperiods.
H. Initial Deposit: Anamount, requiredtosecurefuturepremium payment, as
furtherdefined in Rule IV.
Policy Period:
I.
1 The effectivedate isestablishedonthedate anapprovedapplication, all
reportsand premiumsfrom anypreviouscoverageperiodsand an initial
deposithavebeen received.
2. Policies remain ineffectcontinuouslyuntil cancelled (see RuleXI). Policy
renewal isnotrequired.
J. Report Basis: Timeperiodsassignedforeachemployertoreportemployee
earningsforpremium purposes:
1. Monthly
2. Quarterly- January 1 - March 31
April 1 - June30
July 1 - September30
October 1 - December31
3. SemiAnnual - January 1 - June30
July 1 - December31
K. FiscalYear: A 12-month period beginningJuly 1stand endingthefollowing
June30th.
