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Workers' Compensation Endorsements Order CO-02-0175

March 8, 2002

W. C. Circular Letter No. 706

Retrospective Rating Article 199

TO ALL INSURANCE COMPANIES, CORPORATIONS, EXCHANGES, MUTUALS, RECIPROCALS, ASSOCIATIONS, LLOYDS, OR OTHER INSURERS WRITING WORKERS´ COMPENSATION AND EMPLOYERS´ LIABILITY INSURANCE IN THE STATE OF TEXAS, THEIR AGENTS AND REPRESENTATIVES AND TO THE PUBLIC GENERALLY:

ADOPTION OF WORKERS' COMPENSATION ENDORSEMENT: TEXAS ­ AUDIT PREMIUM AND RETROSPECTIVE PREMIUM ENDORSEMENT WC 42 04 07

Notice is hereby given that the Commissioner of Insurance entered Commissioner´s Order No. 02-0175 dated February 26, 2002 adopting a workers´ compensation endorsement, Texas ­ Audit Premium and Retrospective Premium Endorsement WC 42 04 07. This endorsement will be added to the Texas Basic Manual of Rules, Classifications and Experience Rating Plan for Workers' Compensation and Employers' Liability Insurance (the Manual).

The purpose of this endorsement being added to the Manual is to establish a due date for audit premiums and retrospective premiums pursuant to the National Association of Insurance Commissioners (NAIC) Statement of Statutory Accounting Principles (SSAP) No. 6. According to SSAP No. 6, the policy or contract provisions governing the audit premiums and retrospective premiums must address the due date for these types of premium if the uncollected premium (either accrued or billed) is to be considered an admitted asset by the insurance company.

This endorsement is adopted to be effective March 23, 2002, which is fifteen days after notice of the adoption is published in the Texas Register.

Copies of the revised Manual pages will be sent to those who have purchased a copy of the Manual from the Texas Department of Insurance (TDI) and requested to receive the updated pages. Copies of the Manual may be obtained from TDI at a cost of $30 per manual in accordance with the order information sheet attached to this circular or can be downloaded from the TDI Web page at www.tdi.state.tx.us

Nancy Moore, Deputy Commissioner

Nancy.Moore@tdi.state.tx.us

____________________________________________

TEXAS DEPARTMENT OF INSURANCE EXEMPT FILING NOTIFICATION PURSUANT TO THE INSURANCE CODE,

CHAPTER 5, SUBCHAPTER L ARTICLE 5.96

ADOPTION OF WORKERS´ COMPENSATION ENDORSEMENT:

TEXAS ­ AUDIT PREMIUM AND RETROSPECTIVE PREMIUM

ENDORSEMENT WC 42 04 07

The Commissioner of Insurance adopted Texas ­ Audit Premium and Retrospective Premium Endorsement WC 42 04 07 to be added to the Texas Basic Manual of Rules, Classifications and Experience Rating Plan for Workers´ Compensation and Employers´ Liability Insurance (the Manual). The staff of the Workers´ Compensation Division of the Texas Department of Insurance proposed the endorsement in a petition filed on December 14, 2001. Notice of the proposal (Reference No. W-1201-23-1) was published in the December 28, 2001 issue of the Texas Register (26 TexReg 11055). The adoption of the endorsement was considered at a public hearing held under Docket No. 2511 on February 12, 2002 at 9:30 a.m. in Room 100 of the William P. Hobby Building, 333 Guadalupe Street in Austin, Texas.

The purpose of the endorsement being added to the Manual is to establish a due date for audit premiums and retrospective premiums pursuant to the National Association of Insurance Commissioners (NAIC) Statement of Statutory Accounting Principles (SSAP) No. 6. According to SSAP No. 6, the policy or contract provisions governing the audit premiums and retrospective premiums must address the due date for these types of premium if the uncollected premium (either accrued or billed) is to be considered an admitted asset by the insurance company.

The staff recommended two nonsubstantive changes to the endorsement filed with its petition on December 14, 2001. The proposed endorsement was entitled "Texas ­ Audit Additional Premium and Retrospective Additional Premium Endorsement." The staff recommended changing name of the endorsement by eliminating the word "additional" both times it is used in the title of the endorsement. Staff recommended this change so that the title of the endorsement would conform to the language of SSAP No. 6. With this change, the name of the endorsement is "Texas ­ Audit Premium and Retrospective Premium Endorsement." In addition, staff recommended that the typographical error in the first line of the endorsement be corrected to change the "of" to "or."

The endorsement as adopted by the Commissioner of Insurance is on file with the Chief Clerk under Reference No. W-1201-23-I, which is incorporated by reference in Commissioner´s Order No.02-0175 The Commissioner has jurisdiction over this matter pursuant to the Insurance Code, Articles 5.56, 5.57 and 5.96.

This notification is made pursuant to the Insurance Code, Article 5.96, which exempts it from the requirements of the Government Code, Chapter 2001 (Administrative Procedure Act).

IT IS THEREFORE THE ORDER of the Commissioner of Insurance that the Texas ­ Audit Premium and Retrospective Premium Endorsement WC 42 04 07 be added to the Texas Basic Manual of Rules, Classifications and Experience Rating Plan for Workers´ Compensation and Employers´ Liability Insurance, which is attached and incorporated hereto is hereby adopted to be effective fifteen days after notice of this adoption is published in the Texas Register.

AND IT IS SO ORDERED.

TEXAS - AUDIT PREMIUM AND RETROSPECTIVE PREMIUM ENDORSEMENT

Section D of Part Five of the policy is replaced by the following provision:

PART FIVE ­ PREMIUM D. Premium Payments

You will pay all premium when due. You will pay the premium even if part or all of a workers´ compensation law is not valid. The billing statement or invoice for audit additional premiums and/or retrospective additional premiums establishes the date that the premium is due.

Notes: Use this endorsement to amend the policy provisions to indicate that the billing statement or invoice establishes the due date for audit additional premiums and retrospective additional premiums if the uncollected premium (either accrued or billed) is to be considered an admitted asset of the insurance company.

The Texas Basic Manual of Rules, Classifications and Experience Rating Plan for Workers' Compensation and Employers' Liability Insurance

(manual) is available at a cost of $30.00 per manual. This price includes a copy of the current version of the manual as well as copies of reprint pages. Questions regarding content of the manual should be addressed to the following:

Texas Department of Insurance Workers' Compensation Division, MC105-2A, P. O. Box 149104 Austin, Texas 78714-9104

or by phone to: Classifications (512) 322-3493

General Rules/Ownership/Experience Rating Plan (512) 322-3495

Groups/Deductible/Retro (512) 322-3570

or by fax to: (512) 322-4108

NOTE: You can save money by ordering one manual and reproducing it.

When ordering manuals, please complete the order form below. The price includes taxes, shipping, and revisions. Inquiries regarding publication or distribution of manuals may be directed to the following address or to Gerraine Gottschalk at (512) 322-4283.

Make checks payable to, Texas Department of Insurance

and mail with order form to: Distribution/MC 9999

P. O. Box 149104, Austin, Texas 78714-9104

____________________________________________

ORDER FORM

for the

Texas Basic Manual of Rules, Classifications and Experience Rating Plan for Workers´ Compensation and Employers´ Liability

(PLEASE PRINT OR TYPE)

Quantity Ordered____________ @ $30.00 ea. =$_____________

Name_____________________________________________________

Business_________________________________________________

Address__________________________________________________

City_______________________State______________Zip________

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Last updated: 07/19/2012



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