COVERAGES Workers
COVERAGES Workers Compensation and Employers Liability Workers Compensation in New York is a profitable market due to actuarially established rate structures required by the New York Compensation Insurance Rating Board (NYCIRB). Pricing of Workers Compensation New York is considered a "prior approval" state in terms of workers compensation rate regulation. Manual rates, which include a provision for expenses and profit, are developed by NYCIRB. These rates must be approved by the New York Insurance Department prior to their usage by the member companies of NYCIRB. Premium for this workers’ compensation coverage is determined by manuals of rules, rates, rating plans and classifications of the New York Compensation Insurance Rating Board (NYCIRB). rate and premium basis for specified work classifications. The classifications will be assigned based on an estimate of the exposures during the policy period. Premium for each work classification is determined by multiplying a rate times a premium basis being remuneration paid to workers. This premium base includes payroll and all other remuneration paid or payable during the policy period for the services of: (1) all officers and employees engaged in work; and (2) all other persons engaged in work that could make the Owner and contractors liable under Part One (Workers Compensation Insurance). The estimated premium is be computed in accordance with the following: • Estimated workers compensation payroll remuneration, the payroll, is to be based on a percentage of the construction value with payroll allocated amongst the respective worker’s compensation class codes applicable to the work. • Manual Premium is then calculated by multiplying the payroll by the manual rates as issued by NYCIRB. • An experience modification factor is applied based on the insureds loss history. This either reduces or increases the manual premium to the calculated total modified premium. • Contractor Classification premium adjustment program shall also apply in that the total. modified premium less contractor premium adjustments or scheduled credits will be applied to calculate standard premium. • A premium discount shall be applied based on amount of standard premium calculated. • Expense constant, terrorism and natural disasters and catastrophic accidents shall be added to standard Premium to compute the total estimated annual premium for each policyholder. • New York State Assessment shall be added and calculated by multiplying a yearly percentage by standard premium. 36 | Page
• Total Estimated Policy Premium shall equal Annual premium plus New York Assessment. • Final premium will be determined after a policy ends by using the actual payroll to calculate the actual premium owed, not the estimated, based on the proper classifications and rates that lawfully apply to the business and work covered. If the final premium is more than the premium paid, the balance must be paid. If it is less, a refund will be due. All records that relate to the policy shall be subject to audit. These records include ledgers, journals, registers, vouchers, contracts, tax reports, payroll and disbursement records, and programs for storing and retrieving data. The audit shall be conducted during regular business hours during the policy period and within three years after the policy period ends. Information developed by audit will be used to determine final premium. A sliding scale policyholder dividend plan as a means to provide further incentive to enforce the risk management, apprenticeship and other OSHA safety programs The dividend plan is targeted to return, on average, 10.0% of premium. The dividend scale requires a developed loss ratio of under 40.0%. Annual dividends of as high as 40.0% are available to the larger, loss free risks. Policyholder dividends are not guaranteed and are to be payable only from earned surplus upon declaration by the Board of Directors of the Company. 24-Hour Coverage Program Gaining control of workers' compensation costs is essential. Health care providers under intense pressure from health care programs, find it all too convenient to shift costs to workers' compensation coverage. This can raise the medical cost for any claim by a factor of 100 - 400%. To help alleviate this crushing burden, the Program offers a singularly unique 24-hour protection portfolio jointly administering workers' compensation, health, and disability coverages. Delivery of workers' compensation services and traditional health care reduces costs while providing employees with a simple, state-of-the-art system of health care delivery, combining care for injured and ill workers. Oriska Insurance is the sole provider of a fully insured 24-Hour Coverage Program of employee benefits (the “24-Hour Coverage Program”) offered by Oriska as a domestic New York insurance carrier. The 24-Hour Coverage Program seamlessly provides instant care through a workers’ compensation carrier that is also a licensed health carrier, specializing in workers’ compensation, health and disability. Oriska is so singularly licensed, licensed for health in its PandC licensing, even though health coverage is normally the purview of a life carrier. This gives Oriska the ability to provide immediate care regardless of the injury is work-related or not in a cost-efficient manner. No other U.S. company is so specially licensed. The unusual licensing of Oriska for health, disability and workers’ compensation insurance within the same carrier enables Oriska to provide immediate care under its health coverage, returning 37 | Page
