The commissioner of insurance issued Commissioner's Order No. 3142, dated March 21, 2014, adopting the National Council on Compensation Insurance (NCCI) Basic Manual with Texas exceptions, and the national and Texas-specific endorsements and forms in the NCCI Forms Manual as proposed by the December 30, 2013, TDI staff petition (Reference W-1213-01-I), with one amendment to explicitly allow participation by telephone or other electronic means in the dispute resolution appeals panel, on agreement by the parties. Carriers do not have to make a filing with TDI to use the NCCI Basic Manual with Texas exceptions and the national and Texas-specific endorsements and forms in the NCCI Forms Manual.
The commissioner determined that adopting the NCCI Basic Manual with Texas exceptions, and the national and Texas-specific endorsements and forms in the NCCI Forms Manual, is necessary to allow NCCI to assume certain workers' compensation functions in Texas that TDI is not statutorily required to perform. With the adoption of the cited manuals, Texas has taken a major step toward becoming an NCCI state. The Texas exceptions to the NCCI rules and forms are necessary to preserve the rules that are unique to Texas and to make the transition to NCCI state status as seamless as possible for policyholders.
The NCCI Basic Manual and the Texas exceptions incorporate the Texas classifications currently in effect, so as a result of this rule, the current Texas classifications remain in effect, and do not change to the national classifications used in most NCCI states.
The Texas exceptions replace the aggregate deductible and the per accident/aggregate deductible options with the per claim deductible and the medical-only deductible options. As a result, on the date a carrier begins using the NCCI Basic Manual with Texas exceptions and the national and Texas-specific endorsements and forms in the NCCI Forms Manual, a carrier will no longer be able to use a negotiated deductible based on either the aggregate deductible or the per accident/aggregate deductible. Carriers with approved negotiated or large deductible endorsements on file with TDI based on those two deductible options, who want to replace one of those endorsements with another type of negotiated or large deductible endorsement, must make a new filing with TDI for prior approval. The Property and Casualty Filings Made Easy Guide on the TDI website at www.tdi.texas.gov/pubs/pc/rspceasy.html specifies requirements for making workers' compensation form filings. Insurers may provide the required information using either the transmittal form and filing exhibits in the Filings Made Easy Guide or their own forms and formats.
The order specifies that the rules, classifications, endorsements, and forms in the Texas Basic Manual of Rules, Classifications and Experience Rating Plan for Workers' Compensation and Employers' Liability Insurance will expire at 12:01 a.m., October 1, 2015. Carriers may use the adopted NCCI Basic Manual with Texas exceptions and the national and Texas-specific endorsements and forms in the NCCI Forms Manual for policies with an effective date on or after 12:01 a.m., June 1, 2014; July 1, 2014; August 1, 2014; or September 1, 2014. All carriers are required to use the approved manuals for all Texas workers' compensation policies with an effective date on or after 12:01 a.m., October 1, 2014.
The order also specifies that the Experience Rating Plan contained in the Texas Basic Manual will continue in force until TDI adopts the NCCI Experience Rating Plan with Texas exceptions, independent of the rules, classifications, endorsements, and forms in the Texas Basic Manual.
Finally, the order states that the commissioner will consider any proposed future revisions to NCCI's manuals under either the procedure established in Insurance Code Article 5.96 or the following procedure: 1) NCCI makes a filing; 2) TDI publishes notice of the filing on the TDI website and distributes notice of the filing to subscribers to TDI's electronic newsletters, with at least a 30-day period for interested persons to submit comments or request a hearing; and 3) the commissioner issues an order approving the filing, approving the filing with changes, or rejecting the filing.
Commissioner's Order No. 3142 is effective on April 21, 2014, which is 15 days after the notice of adoption of the cited manuals will be published in the Texas Register. Click on the link below to review the order in its entirety.
Contact me at 512-322-3459 or at nancy.moore@tdi.texas.gov if you have any questions.
Nancy Moore
WC Classification and Premium Calculation Team
Attachment: Commissioner's Order No. 3142