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© 2009 PENNSYLVANIA COMPENSATION RATING BUREAU
PENNSYLVANIA WORKERS COMPENSATION
MANUAL
Of
RULES, CLASSIFICATIONS AND
RATING VALUES
FOR
WORKERS COMPENSATION AND
FOR EMPLOYERS LIABILITY
INSURANCE
Effective DECEMBER 1, 2009
PENNSYLVANIA COMPENSATION RATING BUREAU
PENNSYLVANIA COMPENSATION RATING BUREAU
Manual Information Page
December 1, 2009 Manual
Section 1
Effective December 1, 2009
º Rule IV revision to definition of Salesperson – Outside
º Rule V revision to Per Diem Guidelines
Section 2
Effective December 1, 2009
º Revise Definitions
º Revise class descriptions and Underwriting Guide entries for Codes 855 and 935
º Underwriting Guide additions to Code 607
º Revise class description for Code 028
º Revise class title for Codes 606 and 617 and add Operations Not Included sections
º Revise class description of Code 607
º Revisions to class descriptions and Underwriting Guide entries for Codes 818 and 819
º Clarify class language for 21 classes
º Addition of two General Auditing & Classification Information entries
º Revision to General Auditing & Classification Information part of Wholesale/Retail Mail Order House
or Internet Sales – Definitions
º Addition of 14 and revision of six Underwriting Guide entries
º Addition of Per Diems section in General Auditing & Classification Information section
Section 3
Effective December 1, 2009
º Revision to WC 37 03 10 C
Any questions, suggestions or comments about this Manual should be directed to Bruce Decker at bdecker@pcrb.com
PENNSYLVANIA WORKERS COMPENSATION MANUAL
EFFECTIVE: DECEMBER 1, 2009 PREFACE
Page 1
© 2009 PENNSYLVANIA COMPENSATION RATING BUREAU
PREFACE
A. In accordance with Section 654 of The Insurance Company Law of May 17, 1921, P.L. 682 and Act 44 of 1993, Act 57 of
1996, as amended, the Insurance Commissioner has approved this Manual of risk classes, underwriting rules, bureau rating
values and rating plans, to become effective 12:01 A.M. December 1, 2009, with respect to all policies, the effective date of
which is December 1, 2009 or thereafter, subject to the following express conditions, for the State Workers’ Insurance Fund
and for the insurance companies, corporations, associations and exchanges enumerated in the attached list and for no other
insurance company, corporation, association or exchange.
B. Organization of Manual
This Manual has six sections:
Section 1 – Underwriting Rules
Section 2 – Rating Values and Classifications/General Auditing and Classification Information
Section 3 – Endorsements
Section 4 – Retrospective Rating Plans
Section 5 – Experience Rating Plan
Section 6 – Merit Rating Plan
C. Definitions
The following words are referenced in Act 44 of 1993 or have been used in this Manual with meanings intended to be
consistent with the requirements of that Act. For purposes of improving the understanding of the Manual, definitions of these
words as used elsewhere in this Manual are set forth below.
1. Bureau Data Card – Bureau Data Cards are issued by the Pennsylvania Compensation Rating Bureau. These data
cards provide the risk name, location, Bureau file number, authorized classification(s) and if applicable the risk’s
experience modification for a minimum of one year.
Risks approved for the Pennsylvania Construction Classification Premium Adjustment Program and any other
applicable credit programs will be shown on these data cards.
2. Bureau Loss Costs – Dollar amounts per unit of exposure attributable to the payment of losses under workers
compensation and employers liability coverages, filed by the Bureau based on the aggregate experience of all Bureau
members and approved by the Insurance Commissioner.
3. Bureau Rating Values – All parameters filed by the Bureau and approved by the Insurance Commissioner, and which
are used either mandatorily or by option of carriers for purposes of pricing workers compensation and employers liability
coverages. Such Bureau rating values include Bureau Loss Costs, experience rating plan values such as Expected
Loss Cost Factors, Credibility, Maximum Value of One Accident, and Credibility Weighted Maximum Value Charge,
retrospective rating plan values such as the Table of Expected Loss Ranges, Excess Loss Pure Premium Factors,
Retrospective Pure Premium Development Factors, and expense parameters applicable to U.S.L.&H.W. coverages
such as Premium Discounts, Expected Loss Ratio, Expense Ratios, Tax Multipliers and Loss Conversion Factors.
4. Carrier Rate – The amount per unit of exposure which an insurance carrier charges for workers compensation and
employers liability insurance.
5. Carrier Rating Values – All parameters used by carriers for purposes of pricing workers compensation and employers
liability insurance coverages. Such parameters may be either Bureau Rating Values adopted by a carrier for its own use
or values independently determined by a carrier.
6. Loss Cost – Dollar amounts per unit of exposure attributable to the payment of losses under workers compensation
and employers liability coverages. Loss Costs may be developed either by the Bureau based on the aggregate
experience of all Bureau members or may be established by individual carriers based on their own supporting
information.
7. Provision for Claim Payment – Historical aggregate losses projected through development to their ultimate value and
through trending to a future point in time, but excluding all loss adjustment or claim management expenses, other
operating expenses, assessments, taxes and profit or contingency allowances. In this Manual the term "Loss Cost" is
synonymous with Provision for Claim Payment.
8. Rating Value – A parameter or number used in pricing workers compensation or employers liability insurance
coverages. Rating Values may be established by the Bureau or by individual carriers. Where individual carriers have
established Rating Values different from those of the Bureau, the carrier's values supersede those of the Bureau for
purposes of that insurer's policies.
PENNSYLVANIA WORKERS COMPENSATION MANUAL
EFFECTIVE: DECEMBER 1, 2009 PREFACE
Page 2
© 2009 PENNSYLVANIA COMPENSATION RATING BUREAU
D. Pennsylvania Compensation Rating Bureau Membership List
ACADIA Insurance Company.
Accident Fund Insurance Company of America.
Accident Fund General Insurance Company.
Accident Fund National Insurance Company.
ACE American Insurance Company.
ACE Fire Underwriters Insurance Company.
ACE Indemnity Insurance Company.
ACE Property & Casualty Insurance Company.
ACIG Insurance Company.
ACUITY, A Mutual Insurance Company.
Advantage Workers Compensation Insurance Company.
Agent Alliance Insurance Company.
AIG Centennial Insurance Company.
A.I.U. Insurance Company.
Alea North America Insurance Company.
Alliance National Insurance Company.
Allianz Global Risks US Insurance Company.
Allied Eastern Indemnity Company.
Allied Property and Casualty Insurance Company.
Allmerica Financial Benefit Insurance Company.
Allstate Indemnity Company.
Allstate Insurance Company.
AMCO Insurance Company.
American Alternative Insurance Corporation.
American Automobile Insurance Company.
American Business & Personal Insurance Mutual, Inc.
American Casualty Company of Reading.
American Compensation Insurance Company.
American Country Insurance Company.
American Economy Insurance Company.
American European Insurance Company.
American Fire and Casualty Company.
American Guarantee and Liability Insurance Company.
American Hardware Mutual Insurance Company.
American Home Assurance Company.
American Insurance Company, The.
American International Insurance Company.
American Interstate Insurance Company.
American Manufacturers' Mutual Insurance Company.
American Mining Insurance Company.
American Motorists Insurance Company.
American Safety Casualty Insurance Company.
American Select Insurance Company.
American States Insurance Company.
American States Insurance Company of Texas.
American Zurich Insurance Company.
AmeriHealth Casualty Insurance Company.
Amerisure Mutual Insurance Company.
Amguard Insurance Company.
Arch Insurance Company.
Argonaut Great Central Insurance Company.
Argonaut Insurance Company.
Argonaut-Midwest Insurance Company.
Associated Indemnity Corporation.
Association Insurance Company.
Assurance Company of America.
Atlantic Specialty Insurance Company.
Atlantic States Insurance Company.
Auto-Owners Insurance Company.
Automobile Insurance Company of Hartford, Connecticut.
BancInsure, Inc.
Bankers Standard Fire and Marine Company.
Bankers Standard Insurance Company.
Benchmark Insurance Company.
Bituminous Casualty Corporation.
Bituminous Fire and Marine Insurance Company.
Brethren Mutual Insurance Company, The.
Brotherhood Mutual Insurance Company.
California Insurance Company.
Camden Fire Insurance Association, The.
Carolina Casualty Insurance Company.
Century Indemnity Company.
Charter Oak Fire Insurance Company.
Chartis Casualty Company.
Chartis Property Casualty Company.
Cherokee Insurance Company.
Chrysler Insurance Company.
Chubb Indemnity Insurance Company.
Church Mutual Insurance Company.
Cincinnati Casualty Company.
Cincinnati Indemnity Company.
Cincinnati Insurance Company, The.
Citizens Insurance Company of America.
Clarendon National Insurance Company.
Colony Specialty Insurance Company.
Commerce and Industry Insurance Company.
Companion Commercial Insurance Company.
Companion Property & Casualty Insurance Company.
Continental Casualty Company.
Continental Indemnity Company.
Continental Insurance Company, The.
Continental Western Insurance Company.
Cornhusker Casualty Company.
Crum & Forster Indemnity Company.
Cumberland Insurance Company, Inc.
Cumis Insurance Society, Inc.
Dallas National Insurance Company.
Deerfield Insurance Company.
Delos Insurance Company.
Depositors Insurance Company.
Discover Property & Casualty Insurance Company.
Donegal Mutual Insurance Company.
Eastern Advantage Assurance Company.
Eastern Alliance Insurance Company.
Eastguard Insurance Company.
Electric Insurance Company.
Emcasco Insurance Company.
Employers Compensation Insurance Company.
Employers’ Fire Insurance Company.
Employers’ Insurance Company of Wausau.
Employers’ Mutual Casualty Company.
Employers Preferred Insurance Company.
Erie Insurance Company.
Erie Insurance Company of New York.
Erie Insurance Exchange.
Erie Insurance Property & Casualty Company.
Essentia Insurance Company.
Everest National Insurance Company.
Everett Cash Mutual Insurance Company.
Excelsior Insurance Company.
Explorer Insurance Company.
Fairfield Insurance Company.
Fairmont Premier Insurance Company.
Fairmont Specialty Insurance Company.
Farmington Casualty Company.
Farmland Mutual Insurance Company.
Federal Insurance Company.
Federated Mutual Insurance Company.
Federated Rural Electric Insurance Exchange.
Federated Service Insurance Company.
PENNSYLVANIA WORKERS COMPENSATION MANUAL
EFFECTIVE: DECEMBER 1, 2009 PREFACE
Page 3
© 2009 PENNSYLVANIA COMPENSATION RATING BUREAU
Fidelity and Deposit Company of Maryland.
Fidelity and Guaranty Insurance Company.
Fidelity and Guaranty Insurance Underwriters, Inc.
Fireman's Fund Insurance Company.
Firemen's Insurance Company of Washington, D.C.
First Liberty Insurance Corporation.
First National Insurance Company of America.
First Nonprofit Insurance Company.
FirstComp Insurance Company.
Firstline National Insurance Company.
Flagship City Insurance Company.
Florists’ Insurance Company.
Florists’ Mutual Insurance Company.
Freedom Advantage Insurance Company.
Frontier Insurance Company.
Gateway Insurance Company.
General Casualty Company of Wisconsin.
General Casualty Insurance Company.
General Insurance Company of America.
Genesis Insurance Company.
Grange Mutual Casualty Company.
Granite State Insurance Company.
Graphic Arts Mutual Insurance Company.
Great American Alliance Insurance Company.
Great American Assurance Company.
Great American Insurance Company.
Great American Insurance Company of New York.
Great Divide Insurance Company.
Great Northern Insurance Company.
Great West Casualty Company.
Greater New York Mutual Insurance Company.
Greenwich Insurance Company.
Guarantee Insurance Company.
GuideOne Mutual Insurance Company.
Hanover Insurance Company, The.
Harco National Insurance Company.
Harford Mutual Insurance Company.
Harleysville Insurance Company.
Harleysville Insurance Company of New Jersey.
Harleysville Mutual Insurance Company.
Harleysville Preferred Insurance Company.
Harleysville Worcester Insurance Company.
Hartford Accident and Indemnity Company.
Hartford Casualty Insurance Company.
Hartford Fire Insurance Company.
Hartford Insurance Company of the Midwest.
Hartford Insurance Company of the Southeast.
Hartford Underwriters Insurance Company.
Highlands Insurance Company.
Highmark Casualty Insurance Company.
HM Casualty Insurance Company.
Housing and Redevelopment Insurance Exchange.
Illinois National Insurance Company.
Imperial Casualty and Indemnity Company.
Indemnity Insurance Company of North America.
Indiana Lumbermen's Mutual Insurance Company.
Insurance Company of Greater New York.
Insurance Company of North America.
Insurance Company of the State of Pennsylvania, The.
Insurance Company of the West.
Lackawanna American Insurance Company.
Lackawanna Casualty Company.
Lackawanna National Insurance Company.
Lancer Insurance Company.
Laundry Owners’ Mutual Liability Insurance Association.
Laurier Indemnity Company.
Leading Insurance Group Insurance Company, Ltd
Lebanon Mutual Insurance Company.
Liberty Insurance Corporation.
Liberty Insurance Underwriters, Inc.
Liberty Mutual Fire Insurance Company.
Liberty Mutual Insurance Company.
Liberty Mutual Mid-Atlantic Insurance Company.
Lincoln General Insurance Company.
LM Insurance Corporation.
Lumbermen's Mutual Casualty Company.
Lumbermen's Underwriting Alliance.
Manufacturers Alliance Insurance Company.
Markel Insurance Company.
Maryland Casualty Company.
Massachusetts Bay Insurance Company.
Medmarc Casualty Insurance Company.
MEMIC Indemnity Company.
Mercer Insurance Company.
Merchants Mutual Insurance Company.
Merchants Preferred Insurance Company.
Meridian Security Insurance Company.
Mid-Century Insurance Company.
Middlesex Insurance Company.
Midwest Employers Casualty Company.
Millers Capital Insurance Company.
Mitsui Sumitomo Insurance Company of America.
Mitsui Sumitomo Insurance USA Inc.
Montgomery Mutual Insurance Company.
Motorists’ Mutual Insurance Company.
Mutual Benefit Insurance Company.
National American Insurance Company.
National Fire Insurance Company of Hartford.
National Interstate Insurance Company.
National Surety Corporation.
National Union Fire Insurance Company of Pittsburgh, Pa.
Nationwide Agribusiness Insurance Company.
Nationwide Mutual Fire Insurance Company.
Nationwide Mutual Insurance Company.
Nationwide Property and Casualty Insurance Company.
Netherlands Insurance Company.
New Hampshire Insurance Company.
New Jersey Manufacturers' Insurance Company.
NGM Insurance Company.
NIPPONKOA Insurance Company, Ltd. US Branch.
Norguard Insurance Company.
North American Elite Insurance Company.
North American Specialty Insurance Company.
North River Insurance Company, The.
Northbrook Indemnity Company.
Northern Assurance Company of America, The.
Northern Insurance Company of New York.
NOVA Casualty Company.
Ohio Casualty Insurance Company.
Ohio Security Insurance Company.
Old Republic General Insurance Corporation.
Old Republic Insurance Company.
OneBeacon America Insurance Company.
OneBeacon Insurance Company.
Oriska Insurance Company.
Owners Insurance Company.
Pacific Employers' Insurance Company.
Pacific Indemnity Company.
Paramount Insurance Company.
Patriot General Insurance Company.
Peerless Indemnity Insurance Company.
Peerless Insurance Company.
PENNSYLVANIA WORKERS COMPENSATION MANUAL
EFFECTIVE: DECEMBER 1, 2009 PREFACE
Page 4
© 2009 PENNSYLVANIA COMPENSATION RATING BUREAU
Peninsula Indemnity Company.
Penn Millers Insurance Company.
Penn National Security Insurance Company.
PennCommonwealth Casualty of America Corporation.
Pennsylvania Casualty Company.
Pennsylvania General Insurance Company.
Pennsylvania Lumbermens Mutual Insurance Company.
Pennsylvania Manufacturers' Association Insurance
Company.
Pennsylvania Manufacturers Indemnity Company.
Pennsylvania National Mutual Casualty Insurance
Company.
Pennsylvania Surface Coal Mining Insurance Exchange.
Pharmacists Mutual Insurance Company.
Phoenix Insurance Company, The.
Potomac Insurance Company.
Praetorian Insurance Company.
Preferred Professional Insurance Company.
Princeton Insurance Company.
Property and Casualty Insurance Company of Hartford.
Protective Insurance Company.
Public Service Mutual Insurance Company.
QBE Insurance Corporation.
Redland Insurance Company.
Regent Insurance Company.
Republic-Franklin Insurance Company.
Rockwood Casualty Insurance Company.
SAFECO Insurance Company of America.
Safety First Insurance Company.
Safety National Casualty Corp.
School Boards Insurance Company of Pennsylvania, Inc.
SeaBright Insurance Company.
SECURA Insurance, A Mutual Company.
Select Risk Insurance Company.
Selective Insurance Company of America.
Selective Insurance Company of New York.
Selective Insurance Company of South Carolina.
Selective Insurance Company of the Southeast.
Selective Way Insurance Company.
Seneca Insurance Company, Inc.
Sentinel Insurance Company, Ltd.
Sentry Casualty Company.
Sentry Insurance, A Mutual Company.
Sentry Select Insurance Company.
Somerset Casualty Insurance Company.
Sompo Japan Insurance Company of America.
Southern Insurance Company.
Southern Insurance Company of Virginia.
Southern States Insurance Exchange.
SPARTA Insurance Company.
St. Paul Fire and Marine Insurance Company.
St. Paul Guardian Insurance Company.
St. Paul Mercury Insurance Company.
St. Paul Protective Insurance Company.
Standard Fire Insurance Company, The.
Star Insurance Company.
StarNet Insurance Company.
State Auto Property & Casualty Insurance Company.
State Automobile Mutual Insurance Company.
State Farm Fire and Casualty Company.
State National Insurance Company, Inc.
State Workers’ Insurance Fund.
Statesman Insurance Company.
Strathmore Insurance Company.
SUA Insurance Company.
Synergy Comp Insurance Company.
Technology Insurance Company.
T.H.E. Insurance Company.
TIG Indemnity Company.
TIG Insurance Company.
Tokio Marine & Nichido Fire Insurance Company, Ltd.
Tower Insurance Company of New York.
Tower National Insurance Company.
Trans Pacific Insurance Company.
Transguard Insurance Company of America, Inc.
Transportation Insurance Company.
Travelers Casualty and Surety Company.
Travelers Casualty and Surety Company of America.
Travelers Casualty Company of Connecticut.
Travelers Casualty Insurance Company of America.
Travelers Commercial Insurance Company.
Travelers Indemnity Company, The.
Travelers Indemnity Company of America.
Travelers Indemnity Company of Connecticut, The.
Travelers Property Casualty Company of America.
Truck Insurance Exchange.
Trumbull Insurance Company.
Trustgard Insurance Company.
Twin City Fire Insurance Company.
U.S. Specialty Insurance Company.
Ullico Casualty Company.
Union Insurance Company.
United National Insurance Company.
United States Fidelity and Guaranty Company.
United States Fire Insurance Company.
United Wisconsin Insurance Company.
Universal Underwriters' Insurance Company.
Utica Mutual Insurance Company.
Valley Forge Insurance Company.
Vanliner Insurance Company.
Vigilant Insurance Company.
Vinings Insurance Company.
Wausau Business Insurance Company.
Wausau Underwriters' Insurance Company.
Wesco Insurance Company.
West American Insurance Company.
Westchester Fire Insurance Company.
Westfield Insurance Company.
Westfield National Insurance Company.
WestGUARD Insurance Company.
Westport Insurance Corporation.
Williamsburg National Insurance Company.
Work First Casualty Company.
XL Insurance America, Inc.
XL Specialty Insurance Company.
Zenith Insurance Company.
ZNAT Insurance Company.
Zurich American Insurance Company.
Zurich American Insurance Company of Illinois.
PENNSYLVANIA WORKERS COMPENSATION MANUAL
SECTION 1 UNDERWRITING RULES
EFFECTIVE DATE: DECEMBER 1, 2009
Page 1
© 2009 PENNSYLVANIA COMPENSATION RATING BUREAU
TABLE OF CONTENTS
SECTION 1 – UNDERWRITING RULES
RULE I – GENERAL
A. Workers Compensation
B. Standard Policy
C. Endorsement Forms
D. Endorsement Forms Section
E. Application of Manual Rules
F. Effective Date
1. Manual
2. Changes
G. Anniversary Rating Date
1. Definition
2. Rewritten Policies
3. Long Term Policies
H. Filing Requirements
1. Policy
2. Policy Writing Procedures
3. Endorsements
4. Standard Endorsement Filing Procedure
5. Binders
I. Policy Corrections
J. Medical Contracts
RULE II – EXPLANATION OF COVERAGES AND METHODS OF INSURING
A. Part One – Workers Compensation Insurance
1. Description of Coverage A
2. Pennsylvania Coverage
3. Longshore Coverage
4. Deductible Coverage
B. Coverage Requirements
C. Part Two – Employers Liability Insurance
1. Description of Coverage B
2. Employers Liability for Diseases
3. Admiralty Law or Federal Employers’ Liability Act
4. Employers Liability Insurance with Workers Compensation Insurance
5. Employers Liability Insurance without Workers Compensation Insurance
D. Voluntary Compensation Insurance
1. Description of Voluntary Compensation Insurance
2. How Provided
E. Part Three – Other States Insurance
1. Description of Other States Coverage
2. States where not Available
3. Restriction on Use
4. Premium
F. Deductible Coverage
G. Group Deductible or Retrospective Rating Plan Coverage
RULE III – POLICY PREPARATION – INSURED, POLICY PERIOD AND STATE OF OPERATIONS
A. Explanations of Terms
1. Employer/Entity
2. Insured
3. Majority Interest
4. Risk
B. Name, Address and Other Work-Places of Insured
PENNSYLVANIA WORKERS COMPENSATION MANUAL
SECTION 1 UNDERWRITING RULES
EFFECTIVE DATE: DECEMBER 1, 2009
Page 2
© 2009 PENNSYLVANIA COMPENSATION RATING BUREAU
1. Combination of Legal Entities
2. Name of Insured
3. Pennsylvania Locations
C. Policy Period
1. Normal Policy Period
2. Policy for One Year
3. Policy Longer than One Year
4. Renewal Certificates/Agreements
5. Three Year Fixed Carrier Rating Value Policy Option
6. Annual Rating Endorsements
D. State Laws Designated in the Policy
1. Listing of Pennsylvania
2. Longshore Act
3. Additional States
RULE IV – CLASSIFICATIONS
A. General Explanation
1. Objective
B. Classifications
1. Basic Classifications
2. Standard Exception Classification
a. Clerical Office Employees
b. Drafting Employees
c. Salespersons, Collectors, or Messengers, Outside
3. General Inclusions
4. General Exclusions
C. Assignment of Classifications
1. Object of Classification Procedure
2. Assignment of a Classification
3. Assignment of Additional Classifications
4. Assignment of Analogy
5. Payroll Assignment – Multiple Classifications Interchange of Labor
6. Construction or Erection Operations
7. NOC Definition
8. Changing Classifications
9. Classification Appeal
10. Mercantile Business/Stores
D. Show the Classifications in Item 4 of the Information Page
RULE V – PREMIUM BASIS
A. Basis of Premium – Total Remuneration
B. Remuneration Payroll
1. Definition
2. Inclusions
3. Exclusions
4. Payroll
5. Employee Savings Plans
C. Estimated Payrolls
1. Estimated Payrolls by Classification
2. Determination of Estimated Payrolls
3. Approval of Estimated Payrolls
D. Whole Dollars – Payrolls
E. Payroll Limitation
1. How Payroll Limitation Applies
2. Partial Week
F. Basis of Premium Additional Information
PENNSYLVANIA WORKERS COMPENSATION MANUAL
SECTION 1 UNDERWRITING RULES
EFFECTIVE DATE: DECEMBER 1, 2009
Page 3
© 2009 PENNSYLVANIA COMPENSATION RATING BUREAU
1 Employee Expense Reimbursements
2 Salary Reduction Plans
3 Strike Periods (Wages Paid)
4 Traveling Time Periods
5 Wages Paid for Idle Time
6 Religious Exclusions
7 Members of Religious Orders
8 Subcontractors
9 Outworkers/Homeworkers
RULE VI – RATING VALUES AND PREMIUM DETERMINATION
A. Bureau Rating Values
1. Bureau Loss Cost
2. Disease or Radiation Loading
3. Premium Adjustment Factor
4. Experience Rating Factor
5. Terrorism
6. Catastrophe (other than Certified Acts of Terrorism)
7. Employer Assessment Pursuant to Act 57 of 1997
B. Carrier Rating Values
C. Premium
D. Whole Dollars - Premium
E. Premium Modification – Experience Rating Plan
F. Premium Determination for Federal and Maritime Insurance
G. Premium Algorithm
RULE VII – PREMIUM DISCOUNT
A. Premium Discount
B. Combination of Policies
1. Combination Permitted
2. Combination Procedure
C. Wrap-Up Construction Projects
RULE VIII – LIMITS OF LIABILITY
A. Workers Compensation and Employers Liability Policy
1. Part One – Workers Compensation
2. Part Two – Employers Liability
a. Standard Limits
b. Increased Limits
c. Accident Limit
d. Disease Limit
e. Show Limit on the Information Page
B. Voluntary Compensation Insurance
1. Standard Limits
2. Increased Limits
3. Premium Determination
4. Payroll Records
RULE IX – SPECIAL CONDITIONS OR OPERATIONS AFFECTING COVERAGE AND PREMIUM
A. Executive Officers
1. Definition
2. Law and Status
3. Executive Officer Exclusion Procedure
4. Executive Officers- Multiple Corporate Enterprises
5. Executive Officer Remuneration – Treatment of:
PENNSYLVANIA WORKERS COMPENSATION MANUAL
SECTION 1 UNDERWRITING RULES
EFFECTIVE DATE: DECEMBER 1, 2009
Page 4
© 2009 PENNSYLVANIA COMPENSATION RATING BUREAU
6. Premium Determination
7. Assignment of Payroll
8. Flight Duties
B. Real Estate Sales Person/Broker Licensed Insurance Agent – Exception
C. Professional and Semi-Professional Athletes – Class Code 970
D. Sole Proprietors and Partnerships
E. Subcontractors
1. Law on Contractors and Subcontractors
2. Coverage
3. Premium for Uninsured Subcontractors
4. Drivers, Chauffeurs and Helpers Under Contract
F. Ex-Medical Coverage
G. Truckers - Interstate
H. Pennsylvania Construction Classification Premium Adjustment Program
I. Certified Safety Committee Credit Program
RULE X – CANCELLATION
A. Who May Cancel
B. Premium Determination – Cancellation by the Insurance Carrier
1. Carrier Rating Values and Payroll
2. Experience Rating
C. Premium Determination - Cancellation by the Insured when Retiring from Business
D. Premium Determination – Cancellation by the Insured, Except when Retiring from
Business
1. Actual Payroll
2. Extended Payroll and Number of Days
3. Carrier Rate
4. Experience Rating
5. Short Rate Percentage
6. Example of Short Rate Cancellation
E. Short Rate Cancellation Tables for Term of One Year, Pro Rate Cancellation Tables –
One Year
RULE XI – THREE YEAR FIXED RATE POLICY OPTION
RULE XII – U.S. LONGSHORE AND HARBOR WORKERS’ COMPENSATION ACT
A. General Explanation
B. Workers Compensation Insurance – Part One
C. Employers Liability Insurance – Part Two
D. Classifications and Rates
1. Classifications
2. Rates for Federal “F” Classifications
3. Rates for Non-Federal “Non-F” Classifications
E. Extensions of the U.S.L. & H.W. Act
1. Defense Bases Act
2. Civilian Employees of Nonappropriated Fund Instrumentalities Act
3. Premium Determination
4. Outer Continental Shelf Lands Act
F. Pennsylvania Workers Compensation Voluntary Pool
RULE XIII – THE ADMIRALTY LAW AND THE FEDERAL EMPLOYERS LIABILITY ACT
A. General Explanation
1. Admiralty Law
2. Federal Employers Liability Act (F.E.L.A.)
B. Description of Coverage Programs
1. Program I
2. Program II
PENNSYLVANIA WORKERS COMPENSATION MANUAL
SECTION 1 UNDERWRITING RULES
EFFECTIVE DATE: DECEMBER 1, 2009
Page 5
© 2009 PENNSYLVANIA COMPENSATION RATING BUREAU
C. Coverage
1. Admiralty Law Endorsements
2. Admiralty Law Coverage Options
3. F.E.L.A. Endorsements
4. U.S.L. & H.W. Act
D. Limits of Liability
1. Standard Limits
2. Increased Limits
3. Minimum Premium
E. Classifications
F. Waters not under Admiralty Jurisdictions
1. Coverage
2. Premium Determination
3. Admiralty Law or U.S.L. & H.W. Act Liability
RULE XIV – AGRICULTURAL, DOMESTIC WORKERS - RESIDENCES
A. Definitions
1. Inside Domestic Workers
2. Outside Domestic Workers
3. Occasional Domestic Workers
B. Coverage
1. Workers Compensation and Employers Liability Insurance
2. Voluntary Compensation Insurance
C. Name of Insured
D. Classifications
1. Domestic Workers
2. Maintenance, Repair or Construction Operations
E. Bureau Rating Values and Premium
1. Bureau Rating Values
2. Records Required
3. Full Time Domestic Workers
4. Occasional Domestic Workers
RULE XV – FINAL EARNED PREMIUM DETERMINATION
A. Actual Payroll
B. Premium Determination
C. Audit Rights to Carrier
D. Authorized Classifications
RULE XVI – APPEALS FROM APPLICATION OF THE RATING SYSTEM PROCEDURE
PENNSYLVANIA WORKERS COMPENSATION MANUAL
SECTION 1 UNDERWRITING RULES
EFFECTIVE DATE: DECEMBER 1, 2009
Page 6
© 2009 PENNSYLVANIA COMPENSATION RATING BUREAU
RULE I – GENERAL
A. WORKERS COMPENSATION
Workers Compensation as used in this Manual means workers compensation and occupational
disease law of Pennsylvania.
B. STANDARD POLICY
Standard Policy means the Standard Provisions Workers Compensation and Employers Liability
Policy and the Information Page approved by the Pennsylvania Insurance Department.
C. ENDORSEMENT FORMS
Endorsement forms mean standard endorsements contained in the Endorsement Forms Section. A
standard endorsement must be used in the form prescribed in Section 3.
D. ENDORSEMENT FORMS SECTION (SECTION 3)
Refer to the Endorsement Forms Section for complete description of coverages and instructions on
use of the endorsement forms.
E. APPLICATION OF MANUAL RULES
Rules apply separately to each policy, except as allowed by Rule VII – PREMIUM DISCOUNT.
F. EFFECTIVE DATE
1. Manual
This Manual applies only from the anniversary rating date which occurs on or after the effective
date of this Manual.
2. Changes
The effective date of a change in any rule, classification or Bureau rating value is 12:01 a.m. on
the date specified on the manual page. Any change will be highlighted and linked to the
appropriate Bureau circular announcing the change. Unless specified otherwise, each change
applies only from the anniversary rating date which occurs on or after the effective date of the
change.
G. ANNIVERSARY RATING DATE
1. Definition
The anniversary rating date is the effective month and day of the policy in effect and each
annual anniversary thereafter unless a different date has been established by the Pennsylvania
Compensation Rating Bureau.
2. Rewritten Policies
If a policy is canceled and rewritten by the same or another carrier, all rules, classifications and
carrier rating values of the rewriting carrier which were in effect as of the anniversary rating
date shall apply to the rewritten policy until the next anniversary date as established by the
Pennsylvania Compensation Rating Bureau.
Use the Anniversary Rating Date Endorsement.
No policy may be canceled, rewritten or extended for any period to avoid or take advantage of
any changes in the rules or Bureau rating values of the Manual.
3. Long Term Policies
For application of anniversary rating dates on policies issued for a term in excess of one year,
refer to Rule III - C.
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H. FILING REQUIREMENTS
1. Policy
An exact copy of every Workers Compensation Policy showing the state of Pennsylvania on
the Information Page shall be filed with the Pennsylvania Compensation Rating Bureau within
thirty days after the effective date of the policy.
2. Policy Writing Procedures
a. Policy Numbers
The policy number designated by the carrier at policy issuance must remain constant and
must be used on all endorsements and other documents related to that policy. If a portion
of the policy number is designated at inception as the "key" policy number, such
designation must be clearly identified on the policy information page and the "key" number
must be used on all endorsements and other documents related to that policy.
b. Renewal Policy Numbers
The information page of each renewal policy shall identify the policy number of the policy
which it renews, in accordance with a. above. This procedure also applies to rewritten
policies. The word "same" should be used to indicate that the same policy number has
been used on renewal. The word "new" should be used to indicate a newly issued policy.
3. Endorsements
An exact copy of all endorsements or agreements attached to the policy at its inception date or
issued subsequent to the inception date of the policy must be filed with the Bureau within thirty
days after the date of issue of such endorsement or agreement.
4. Standard Endorsement Filing Procedure
a. Any endorsement filed with the Insurance Department on behalf of Bureau members by
the Bureau must be filed for approval with the Bureau. For filing procedure details refer to
Section 3.
b. Non Standard Endorsements filing procedure, refer to Section 3.
5. Binders
a. A copy of the binder must be filed with the Bureau on an approved form with all required
endorsements attached no later than thirty days after its date of inception.
b. The binder must contain the classification codes and Carrier Rating Values applicable to
the employer in accordance with the assignment issued by the Bureau or in accordance
with the Classification Rules of this Manual if no specific Bureau assignment has been
made.
c. A binder must be replaced with a short-term policy covering the amount of time the binder
was in effect or replaced with a full-term policy including the time period the binder was in
effect.
I. POLICY CORRECTION
If the Bureau finds that a policy requires correction to conform to Manual rules or
classifications, the carrier shall be notified by letter. Such policy shall be corrected and a copy
of the correcting endorsement shall be submitted to the Bureau no later than thirty (30) days
after notification.
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J. MEDICAL CONTRACTS
1. Medical contracts and agreements between insurance carriers and insured employers where
medical service or supplies are furnished by the employer in consideration of a reduced
premium or other consideration cannot be made.
2. Insurance carriers may not furnish medical equipment or hospital supplies to the insured’s
employer.
RULE II – EXPLANATION OF COVERAGES AND METHODS OF INSURING
A. PART ONE – WORKERS COMPENSATION INSURANCE
1. Description of Coverage A
Workers compensation insurance provides coverage for the statutory obligation of an employer
to provide benefits for employees as required by:
a. Workers compensation law or occupational disease law of any state or territory of the
United States, including the District of Columbia, and
b. United States Longshore and Harbor Workers' Compensation Act.
2. Pennsylvania workers compensation insurance may be provided only by the Standard Policy.
3. Longshore Coverage
U.S. Longshore and Harbor Workers' Compensation Act insurance may be provided only by
attaching the Longshore and Harbor Workers' Compensation Act Coverage Endorsement (WC
00 01 06A) to the Standard Policy. Refer to Rule XII.
B. COVERAGE REQUIREMENTS
1. Compulsory as to all employments
Exceptions:
a. Individual proprietors
b. Partners of a partnership (including members of a Limited Liability Company (LLC).
c. Elected officers of the Commonwealth or any of its political subdivisions.
d. An executive officer of a for profit corporation or an executive officer of a nonprofit
corporation who serves voluntarily and without remuneration may, however, elect not to be
an “employee” of the corporation. For the purposes of this exclusion, an executive officer
of a for-profit corporation is an individual who has either an ownership interest in a
Subchapter S corporation as defined by the Act of March 4, 1971 (P.L. 6, No. 2) known as
the “Tax Reform Code of 1971,” or an interest of at least five percent in a Subchapter C
corporation as defined by the Tax Reform Code of 1971.
e. Any person who is a licensed real estate salesperson or an associate real estate broker
affiliated with a licensed real estate broker or a licensed insurance agent affiliated with a
licensed insurance agency, under a written agreement, remunerated on a commission only
basis and who qualifies as an independent contractor for State tax purposes or for Federal
tax purposes under the Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 1
Et Seq.).
f. Domestic or casual labor.
g. Outworker (a person to whom articles are given for cleaning, repair, etc. at home).
h. Farmer with one employee who works less than 30 days a year or earns less than $1,200
a year. A spouse or a child of the farmer employer under eighteen years of age shall not
be deemed an employee unless the services of such spouse or child are engaged by the
farmer employer under an express written contract of hire which is filed with the
Pennsylvania Department of Labor and Industry.
i. Elective for members of certain religious sects whose tenets prohibit benefits from
insurance, provided the sect makes provisions for its members.
2. No insurance carrier is permitted to issue policies which would create duplicate coverage for an
employer. Policies of different insurance carriers cannot be written for separate parts of a single
risk.
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3. When an employer proposes to insure both his accident and occupational disease
compensation liability, such liability must be covered by a single policy of one insurance carrier.
C. PART TWO – EMPLOYERS LIABILITY INSURANCE
1. Description of Coverage B
Employers liability insurance provides coverage for the legal obligation of an employer to pay
damages because of bodily injury by accident or disease, including resulting death, sustained
by an employee. Employers liability coverage applies only if the injury or death of an employee
arises out of and in the course of employment and is sustained:
a. In the United States of America, its territories or possessions, or Canada, or
b. While temporarily outside the United States of America, its territories or possessions, or
Canada, if the injured employee is a citizen or resident of the United States or Canada; but
suits for damages and actions on judgments must be in or from a court of the United
States, its territories or possessions or Canada.
Unless specifically excluded, coverage for the liability of an employer under admiralty law
and the Federal Employers Liability Act is provided by employers liability insurance.
2. Employers Liability for Diseases
Employers liability insurance for diseases not covered by a workers compensation law or an
occupational disease law is provided by the Standard Policy.
3. Admiralty Law or Federal Employers Liability Act
Employers liability insurance for liability of an employer under admiralty law or Federal
Employers Liability Act is not provided by the Standard Policy. Refer to Rule XII for rules and
endorsements to cover or limit this exposure.
4. Employers Liability Insurance With Workers Compensation Insurance
Employers liability insurance written with workers compensation insurance is provided
by the Standard Policy.
5. Employers Liability Insurance Without Workers Compensation Insurance
Employers liability insurance without workers compensation insurance is prohibited in the state
of Pennsylvania.
D. VOLUNTARY COMPENSATION INSURANCE
1. Description of Voluntary Compensation Coverage
Voluntary compensation insurance does not provide workers compensation coverage and is
not available for employments subject to a workers' compensation law. This insurance affords
the benefits of a designated compensation law as if the affected employees were subject to
that law, even though the law does not require payment of benefits to such employees.
Voluntary compensation insurance shall not provide compensation, medical or other benefits in
excess of the statutory requirements in the workers compensation law designated in the
standard Voluntary Compensation and Employers Liability Coverage Endorsement.
2. How Provided
Voluntary Compensation insurance is provided by attaching the Standard Voluntary
Compensation and Employers Liability Coverage Endorsement (WC 00 03 11A) to the
Standard Policy. Refer to Rule VIII for rules and carrier rating values.
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E. PART THREE – OTHER STATES INSURANCE
1. Description of Other States Coverage
a. Employers liability insurance and, where permitted by law, workers compensation
insurance are provided in other states not listed in Item 3-A of the Information Page by
listing states where coverage is to be provided in Item 3-C of the Information Page.
b. If workers compensation insurance does not apply because the insured or carrier is unable
to take the necessary action to bring the insured under a workers compensation law, the
carrier will reimburse the insured for all compensation and other benefits required of the
insured under such law.
c. Part Three – Other States Insurance does not provide U.S. Longshore and Harbor
Workers' Compensation Act coverage. It may be afforded only in accordance with Rule
XII.
2. States Where Not Available
Other states coverage is not available in states:
a. With a monopolistic state fund, or
b. Where the carrier elects not to write this coverage.
3. Restriction on Use
Coverage for operations known or expected to be performed in a state not listed in Item 3-A of
the Information Page shall not be provided under Part Three – Other States Insurance.
4. Premium
Premium developed for operations covered under Part Three – Other States Insurance shall be
based on workers compensation rules and carrier rating values.
F. DEDUCTIBLE COVERAGE
Act 44 of 1993 requires an insurer issuing a workers compensation policy to offer a deductible
program upon a policyholder's request.
1. Deductible coverage shall be made part of the policy if requested by the policyholder.
Underwriting criteria for deductible coverage are to be established by individual carriers.
2. The claimants' benefits will be paid by the insurance carrier without regard to any deductible.
3. The policyholder must agree to reimburse the carrier for the deductible amount for any benefits
paid to claimants.
4. Failure of the policyholder to reimburse the carrier for any deductible amount shall be treated
as non-payment of premium under the policy.
5. The loss elimination ratio is determined by the hazard group (found in Section 2 of this Manual)
of the policy's governing classification. Codes 951, Salesmen and 953, office, cannot be
governing classifications unless they are the only classifications on the policy.
6. The premium adjustment for the deductible provisions of the policy shall be reported as a credit
which shall be applied prior to experience modification or other carrier premium modifications.
7. If the policy is issued with a deductible provision, the Deductible Endorsement (WC 37 04 03)
shall be issued and made part of the policy.
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8. The Pennsylvania Insurance Department has promulgated three deductible coverage levels of
$1,000 per claim, $5,000 per claim and $10,000 per claim respectively. Individual carriers can
offer different deductible levels and/or premium credits upon approval of the Pennsylvania
Insurance Department.
G. GROUP DEDUCTIBLE OR RETROSPECTIVE RATING PLAN COVERAGE
Act 57 of 1996 permits an insurer issuing a workers compensation policy to offer an endorsement for
deductible or retrospective rating plans for groups of five or more employers, subject to approval by
the Insurance Commissioner and subject to the individual insurer's underwriting criteria for deductible
coverage (see F. 1. above).
1. The insurer will issue an individual workers compensation policy for each member of the group.
2. Each group member will be held jointly and severally liable for the payment of premiums or
deductible amounts with regard to benefits paid for compensable claims of the group as a
whole.
RULE III – POLICY PREPARATION – INSURED, POLICY PERIOD AND STATE OF OPERATIONS
Item 1, 2 and 3-A of the Information Page
A. EXPLANATION OF TERMS
1. Employer/Entity
Employer may be an individual, partnership, joint venture, corporation, association, or a
fiduciary such as a trustee, receiver or executor, or other entity.
2. Insured
Insured means the employer designated in Item 1 of the Information Page. If the insured is a
professional association use the Professional Association Act Endorsement in Section 3 of this
Manual.
3. Majority Interest
Majority Interest as defined in the Experience Rating Plan Section applies. The term majority
shall mean more than 50%.
a. Majority of voting stock, or
b. Majority of members or directors if there is no voting stock, or
c. Majority participation of general partners in profits of a partnership.
4. Risk
Risk means a single legal entity or two or more legal entities which qualify for combination in
the state of Pennsylvania.
B. NAME, ADDRESS, AND OTHER WORKPLACES OF INSURED – ITEM 1
1. Name of Insured
In addition to providing the complete legal name of the insured, carriers shall designate each
fictitious name shown on the Information Page by the symbol D.B.A. (doing business as). In
addition, if a fictitious name is shown on an endorsement the same designation, D.B.A., shall
be shown. A fictitious name is a business name which is not the legal name of the insured.
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The effective date of any change, addition or deletion in the name of the insured shall be
shown on the endorsement.
Name and address changes should be effected on a separate endorsement and not in
conjunction with other policy amendments.
2. Combination of Legal Entities
Separate legal entities may be insured in one policy only if the same person, or group of
persons, owns the majority interest in such entities.
3. Pennsylvania Locations
All locations and operations of the employer in Pennsylvania shall be insured in one policy.
Exception: Long Term Construction Projects (Wrap-up). See Rule IX-D.
C. POLICY PERIOD – ITEM 2
1. Normal Policy Period
The normal policy period is one year. A policy may be issued for any period but not longer than
3 years.
2. Policy for One Year
a. The manual rules are based on a policy period of one year.
b. A policy issued for a period not longer than one year and 16 days is treated as a one year
policy.
3. Policy Longer Than One Year
A policy issued for a period longer than one year and 16 days, other than a 3-year fixed carrier
rating value policy, is treated as follows:
a. The policy period is divided into consecutive 12-month units.
b. If the policy period is not a multiple of 12 months, use the Standard Policy Period
Endorsement (WC 00 04 05) to specify the first or last unit of less than 12 months as a
short-term policy.
c. All manual rules and procedures apply to each such unit as if a separate policy had been
issued for each unit.
4. Renewal Certificates, Agreements and Continuing Form Policies, should be handled as
policies longer than one year.
5. Three-Year Fixed Carrier Rating Value Policy Option
A policy may be issued for a period of 3 years at fixed carrier rating values. Such a policy shall
not be issued if the risk is subject to the Experience Rating Plan on the effective date of the
policy.
A policy issued under this option shall be known as a Three-Year Fixed Carrier Rating Value
Policy and shall be so designated on the Information Page. Refer to Rule XI.
6. Annual Rating Endorsements
An "Annual Rating Endorsement" shall be submitted annually for each continuing form policy
or policy written for a period in excess of one year but not more than three years to be effective
on the anniversary date set by such policy. It shall be submitted to the Bureau not later than
thirty days subsequent to its inception.
Each annual rating endorsement shall be clearly identified by printing in large boldface type at
the top of the endorsement the words "ANNUAL RATING ENDORSEMENT."
Annual rating endorsements shall also:
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a. Show the name of the carrier providing the insurance. If the names of affiliated
carriers are printed on endorsement forms, the particular carrier providing coverage shall
be clearly indicated.
b. Show the policy number, including all printed and typed prefixes to facilitate the
identification of the policy to which the Annual Rating Endorsement is related.
c. If the annual rating endorsement being filed replaces an annual rating
endorsement covering the same period, indicate that it is a rewrite.
d. Show the date of its inception and expiration.
e. Show the code number(s) and carrier rate(s) applicable. If the carrier rate(s) or
experience modification is not effective as of inception date of the endorsement, also
show the effective date of such carrier rate(s) or modification.
f. Show the premium adjustment period, deposit premium and estimated annual
premium for the period covered by the Annual Rating Endorsement.
Annual Rating Endorsements shall be used only for the purpose of showing the carrier rates,
experience modifications, premium adjustment period, deposit premium and estimated annual
premium for each one-year period. They cannot be used to make any other changes in the
policy such as, but not restricted to, modifying the name of the insured, adding or eliminating
classifications, adding or eliminating locations.
D. STATE LAWS DESIGNATED IN THE POLICY – Item 3-A
1. Listing of Pennsylvania
Insurance for operations conducted in Pennsylvania is provided by listing the state in Item 3-A
of the Information Page.
2. Longshore Act
The U.S. Longshore and Harbor Workers Compensation Act shall not be entered in Item 3-A of
the Information Page. Refer to Rule XII.
3. Additional States
A state may be added after the effective date of the policy. For the additional state operations,
apply:
a. Carrier rating values in effect on the anniversary rating date of the policy to which the state
has been added.
b. Any change in carrier rating values which applies to outstanding policies for the state
being added.
c. When adding the State of Pennsylvania, the Information Page and attached endorsements
shall be prepared so that the Pennsylvania coverage can be clearly determined.
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RULE IV – CLASSIFICATIONS
Item 4 of the Information Page
A. GENERAL EXPLANATION
1. Objective
The object of the classification system is to group insureds into classifications so that the rating
value for each classification reflects the exposures common to such distinct business
enterprise (See Rule IV, C. 2. & C. 3.). Subject to certain exceptions described later in this rule,
it is the business of the insured within Pennsylvania that is classified, not the separate
employments, occupations or operations within the business.
B. CLASSIFICATIONS
1. Basic Classifications
All classifications in the Manual are basic classifications, other than the standard exception
classifications. Basic classifications describe the business of an insured such as:
Business
Classification
Manufacture of a Product Furniture Manufacturing
A Process Printing
Construction or Erection Carpentry
A General Type or Character of Business Hardware Store
A Service Beauty Parlor
Classifications are listed in Section Two of the Manual. Notes following a classification are part
of that classification. Also, see Section Two of this Manual for classifications by group
arrangement which is essentially a numeric listing.
2. Standard Exception Classification
Some occupations are common to so many businesses that special classifications have been
established for them. They are called standard exception classifications. Employees within the
definition of a standard exception classification are not included in a basic classification unless
the basic classification specifically includes those employees. The standard exception
classifications are defined below:
a. CLERICAL OFFICE EMPLOYEES – Code 953 – are employees exclusively engaged in
keeping the books or records of the insured or conducting correspondence or who are
engaged wholly in office work where such books or records are kept or such
correspondence is conducted.
This classification shall be applied only to employees herein described who work
exclusively in separate buildings or on separate floors or in departments on such floors
which are separated from all other workplaces of the employer by floor to ceiling partitions
except for retail stores where a partition at least five feet high is required and within which
no work is performed other than clerical office duties as defined in this rule.
If any clerical office employee has any other regular duty, the entire payroll of that
employee shall be assigned in accordance with the class to which the business is
assigned.
(1) The clerk, such as a counter, front desk, lobby, mall kiosk, time, stock or tally clerk
or librarian, whose work is necessary, incidental or part of any operation of the
business other than clerical office, shall not be considered a clerical office
employee. Such clerk should be assigned to the basic classification of the
business.
The cashier also shall not be considered a clerical office employee. A cashier is
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(2) responsible for accepting payment for merchandise or services rendered. The
cashier's physical location may include but is not necessarily limited to: a booth,
behind a counter or on a sales floor. The cashier or any employee whose regular
and frequent duty is accepting payment for merchandise or services should be
assigned to the basic classification of the business regardless of the physical work
location.
(3) Office employees shall be separately classified except in connection with those
classes which specifically include Office Employees.
b. DRAFTING EMPLOYEES, Code 953, are employees engaged exclusively in drafting and
confined to office work. The entire payroll of any such employees engaged in any other
operations shall be assigned to the highest Bureau loss cost classification of operations to
which they are exposed.
c. SALESPERSONS – OUTSIDE, Code 951 – are employees either exclusively engaged in
sales or collection work away from the employer's premises or who regularly and frequently
are engaged in --- sales or collection work away from their employer’s premises and devote
the balance of their time in clerical office duties.
This classification is inapplicable to employees delivering merchandise or products. Even
though they may also collect or solicit, such employees shall be assigned in accordance
with the classification appropriate to the business of the employer for which delivery is being
made.
Also not included are floor and/or counter salespersons. Such employees shall be assigned
in accordance with the class appropriate to the business at the location.
Employees who sell or solicit exclusively by telephone shall be assigned to Code 953,
Clerical Office Employees.
Salespersons, Collectors or Messengers shall be separately classified except in connection
with those classes which specifically include all employees or all employees except office.
--- Mobile, self-propelled factory, farm or construction equipment Salespersons – Code 819
are employees engaged in --- selling such equipment, or auctioning automobiles or
instructing persons how to drive an automobile or truck on and away from the insured’s
premises. The separate Code 819 shall be treated as Salespersons – Outside, Code 951,
for the purposes of this rule ---.
3. General Inclusions
a. Some operations appear to be separate businesses, but they are included within the
scope of all classifications other than the standard exception classifications. These
operations are called general inclusions and are:
(1) Commissaries or restaurants operated for an insured's employees except in
connection with construction, erection, lumbering, mining or the recovery of
petroleum and/or natural gas.
(2) Manufacturing of containers such as bags, barrels, bottles, boxes, cans, cartons
or packing cases (and the incident printing thereon) to be used by the employer in
the packaging of its products.
(3) Medical facilities operated by the insured for its employees.
(4) Maintenance or repair and/or cleaning of an insured's buildings, or vehicles or
equipment when performed by employees of an insured.
(5) Printing or lithographing by an insured on its products.
(6) Stamping or Welding – when an integral technique that is a part of an overall
manufacturing process.
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(7) Drilling or Blasting – when conducted by the employees of a surface or
underground non-coal mine operator to facilitate mineral extraction. Drilling,
redrilling or deepening conducted by an entity whose field of business is the
recovery of petroleum and/or natural gas shall be separately classified.
(8) Quality control of an insured's products or research laboratories engaged in
developing and/or improving products manufactured by an insured.
(9) Drivers, chauffeurs and their helpers including all employees whose principal
duties are the operation and/or the repair of vehicles.
(10) If vehicles, including drivers, chauffeurs and helpers are employed under contract
and if the owner of such vehicles has not insured his compensation obligation and
furnished evidence of such insurance, the actual payroll of the drivers, chauffeurs
and helpers shall be included in the payroll of the insured employer at the proper
carrier rating value(s) for the operations in which they are engaged. If such payroll
cannot be obtained, one-third (1/3) of the total amount paid for the hire of such
vehicles under contract shall be considered as payroll of the drivers, chauffeurs
and helpers.
When the contract price does not include the cost of fuel, maintenance, or other
services provided to the owner or owner-operator of a vehicle under contract, the
value of such goods and services shall be added to the contract price before
determining the one-third (1/3) amount.
If the owner of the vehicle is also a driver, and if in the event of an injury would be
entitled to workers compensation benefits from the insured, (see Section 2 Owner-
Operator Owner/Driver for more detail), use actual payroll or if unavailable, use
one-third (1/3) of the contract price for that vehicle which shall be included in the
payroll of the insured employer.
(11) Tools, dies, molds or fixtures made and/or repaired by an insured that are used in
the insured's product manufacturing operations.
(12) Aircraft travel by employees, other than members of the flying crew, including
employees whose payroll is assigned to the Standard Exception Classifications.
(13) Child day care services operated by the employer for his employees.
(14) Warehousing by an employer of its merchandise, products and/or raw materials.
(15) Security guards protecting their employer’s premises and property.
(16) Heat treating by an insured on its products.
(17) Counter personnel
(18) Cashiers
b. Any operation described by a General Inclusion shall be separately classified only if:
1. Such operation constitutes a separate and distinct business of the insured as
provided in Rule IV - C. below or
2. It is specifically excluded by the classification wording, or
3. The principal business is described by a standard exception classification.
4. General Exclusions
Some operations in a business are so unusual that they are excluded from basic
classifications. They are classified separately unless specifically included in the basic
classification wording. These operations are called general exclusions and are:
(1) Aircraft operation – all operations of the flying and ground crews.
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(2) New construction or structural alterations by the insured's employees.
(3) Sawmill Operations – sawing logs into lumber by equipment such as circular
carriage or band carriage saws, including operations incidental to the sawmill.
(4) Stevedoring, including tallying and checking incidental to stevedoring.
(5) Mining and Quarrying, Clay, Gravel or Sand Excavation and Dredging.
C. ASSIGNMENT OF CLASSIFICATIONS
1. Object of the Classification Procedure
a. The object of the classification procedure is to assign the one basic classification which
best describes each distinct business enterprise of the insured within Pennsylvania.
Subject to certain exceptions described in this Rule, each classification includes all the
various types of labor found in a distinct enterprise. It is the business which is classified,
not the individual employments, occupations or operations within a business. Additional
classifications shall be assigned as provided below.
b. Act 44 of 1993 permits an insurer to develop subclassifications to the Bureau's
classification system as approved by the Insurance Commissioner. Any such
subclassification shall be filed by the developing insurer with the Bureau and the Insurance
Commissioner thirty (30) days prior to its use. The insurer's filing shall demonstrate that
payroll and loss data produced under such subclassification can be reported to the Bureau
consistent with the Bureau's classification system and statistical plan. Otherwise, the
Insurance Commissioner shall disapprove the subclassification filing.
2. Assignment of a Classification
a. The policy shall contain only classifications approved by the Pennsylvania Compensation
Rating Bureau and in accordance with this Manual.
Each classification is presumed to describe an entire business enterprise. Any policy
which contains more than a single classification cannot contain any classifications
representing a payroll less than that of one full-time employee, but this rule will not apply in
classifications involved in Construction, Erection, Stevedoring, Part-Time Aircraft
Operations or if the business’ basic and major operations are described by the Standard
Exception Classifications and there are employees whose job duties are not assignable to
the Standard Exceptions except as specified in classification phraseology.
Act 44 of 1993 permits an insurer to develop subclassifications to the Bureau's
classification system as approved by the Insurance Commissioner. Any such
subclassification shall be filed by the developing insurer with the Bureau and the Insurance
Commissioner thirty (30) days prior to its use. The insurer's filing shall demonstrate that
payroll and loss data produced under such subclassification can be reported to the Bureau
consistent with the Bureau's classification system and statistical plan. Otherwise, the
Insurance Commissioner shall disapprove the subclassification filing.
b. Single Enterprise. If a risk consists of a single operation or a number of separate
operations which normally occur in the business described by a single manual
classification, or separate operations which are an integral part of or incidental to the main
business, that single classification which most accurately describes the entire enterprise
shall be applied. The separate operations so covered may not be assigned to another
classification even though such operation may be specifically described by some other
classification or may be conducted at a separate location.
Division of payroll shall be made as provided in respect to General Exclusions, Standard
Exceptions or Special Class Wording. For construction or erection work, see special
procedure set forth in Rule IV, C. 5.
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EXCEPTION
Where a retail outlet is located at the same or contiguous premises as a business'
manufacturing facility, the applicable retail store classification shall apply to the payroll of
the retail outlet provided that such outlet is operated in an area physically separate from
other operations by a floor to ceiling partition and it is separately staffed.
c. Authorized Classifications. When the classification of any insured has been established
by the Rating Bureau, no policy shall be issued or endorsed nor adjustment of premium
made under any other or conflicting classification.
In any instance where the established classification does not describe the current
operations of the insured, the insuring carrier or insured shall draw the matter to the
attention of the Rating Bureau in writing with full particulars prior to the application of any
other classifications. The reclassification shall not take place until the Bureau Staff has
received and reviewed such documentation and has replied in writing to the insured or
insuring carrier agreeing with their position or otherwise advising on which class(es) to
assign.
The insuring carrier is not relieved of the obligation to apply the class authorized for an
insured because of lack of knowledge that the Bureau has established an authorized
classification for that insured.
3. Assignment of Additional Classifications
a. Multiple Classifications/Multiple Enterprises (Not construction or erection operations
see paragraph 6.)
Additional classifications may be used only when valid evidence supports their
authorization or in conformity with the rules stated under "Standard Exceptions" and
"Exclusions." Additional classes may not be added without Bureau authorization when
their use is in violation of Manual Rules or an existing bureau data card.
Additional classifications shall be assigned to an insured only if the following conditions
exist:
1. If the classification wording requires the assignment of an additional
classification for specified employees or operations.
2. If there are distinct enterprises (meaning thereby businesses, which are
specifically classified in this Manual, but not operations that normally occur
in the business described by the assigned classifications, nor operations
described by any of the General Inclusions), conducted in a given plant by
the same insured and the entire work in each enterprise is conducted either
in a separate building or on a separate floor or floors of a building, or on the
same floor in separate departments divided by floor to ceiling partitions
without interchange of labor and the insured conducts each of such
enterprises as a separate undertaking with separate records of payroll,
then such separate undertakings shall each be separately classified, (and
the proper carrier rating value applied to each).
3. See Governing Classification rules for assignment of incidental operations
that support more than one distinct enterprise.
b. Governing Classification
The governing classification is that classification other than the standard exception
classifications (which may never be the governing class) which carries the largest amount
of payroll exclusive of payroll of miscellaneous employees as defined below.
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(1) This concept shall be utilized not in the initial classification assignment process but
to determine how to classify miscellaneous employees when an insured is
assigned two or more classifications.
Miscellaneous employees are employees that either supervise or support all the
various undertakings of the insured. The functions performed by miscellaneous
employees may include but are not necessarily limited to: maintenance, mailroom,
shipping and receiving, yard operations, security, power plant operations, lobby or
front desk personnel, elevator operators, porters, foremen, superintendents or
timekeepers.
(2) The entire remuneration of miscellaneous employees is assignable to the
governing classification.
(3) The governing classification in the case of construction or erection operations shall
be determined on a job basis within each policy period if payrolls are kept
separately by job within the policy period; otherwise on the basis of the entire policy
period.
(4) If the basic and major operations are described by classifications defined as
Standard Exceptions, the payroll of all employees not specifically included in the
definition for such Standard Exceptions shall be separately classified to Code 971.
4. Assignment By Analogy
Any enterprise which is not described by a classification in this Manual shall be assigned to the
classification or classifications most analogous from the standpoint of process and hazard. The
limitations and conditions of the classification or classifications so assigned and all Manual
rules pertaining to the classification shall be applicable.
5. Payroll Assignment – Multiple Classifications - Interchange of Labor
Some employees who are not miscellaneous employees may perform duties directly related to
more than one classification. When there is such an interchange of labor, the entire payroll of
employees who interchange shall be assigned to the highest bureau loss cost classification
representing any part of their work.
The payroll of one employee shall not be divided into two or more classes except where
specifically described in classification wording as "to be separately rated" or "separately rate"
and with no requirement for separate staff. See the paragraph immediately below for the
auditing procedure.
General Exceptions to C. 5. above
For Construction, Erection, Temporary Staffing or Stevedoring, the payroll of any individual
employee may be divided and allocated to more than one such classification provided the entry
on the original records of the insured discloses an allocation of each such individual employee's
payroll. Estimated or percentage allocation of payroll is not permitted. Only a single stevedoring
class shall be applied to all payroll developed in the loading or unloading of a single vessel. For
further reference see the material under Stevedoring in Section 2 of the Manual. For Executive
Officers see Rule IX, A. 4.
6. Construction or Erection Operations
Each distinct type of construction or erection operation at a job or location shall be assigned to
the classification which specifically describes such operation provided separate payroll records
are maintained for each operation. Estimated or percentage allocation of payroll is not
permitted.
Any such operation for which separate payroll records are not maintained shall be assigned to
the highest Bureau loss cost classification which applies to the job or location where the
operation is performed.
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A separate construction or erection classification shall not be assigned to any operation which
is within the scope of another classification assigned to such a job or location which is
assignable to a construction classification designated "all work to completion." All operations of
the insured contractor at that job or location shall be assignable to such classification.
7. NOC Please see Definitions Section 2.
8. Changing Classifications
a. The Bureau is empowered to determine, revise or modify the classification(s) assigned to
any individual insured. No written application by the carrier, agent of record or an insured
to change an insured's authorized classification(s) shall be considered by the Bureau
until the carrier has issued and filed a copy of its policy Information Page written in
accordance with an insured's authorized classification(s). The classification(s) shown in
any policy shall be subject to correction or modification, or both, if the Bureau finds by
survey or otherwise that the classification(s) shown in the policy are inappropriate to the
insured. No written application to change the classification(s) for an insured on the
grounds that the insured has been improperly classified shall be considered by the
Bureau unless such written application is filed directly with the Bureau by the insured,
agent of record or the carrier during the policy period with respect to which the
application is made, or within twelve months after the termination thereof.
b. (1) A change in an insured's classification that results from a recent change in an
insured's operations (i.e. an operations change that has taken place during the
current policy year or the policy year that has just expired) will be applied pro rata
as of the date of the change in the insured's operations, regardless of the premium
impact to the insured. When a Bureau review discloses the insured’s recent
operations change, the Bureau will make written notice to the carrier of record
changing the insured’s authorized classification(s) for the current policy year and, if
warranted, for the policy year that has just expired. When the carrier becomes
aware of such recent operations change, the carrier shall make written application
to the Bureau to change the insured's authorized classification(s) during the current
policy year and, if warranted, for the policy year that has just expired.
(2) A correction of a misclassification which results in a premium decrease shall be
applied to the insured's policy in effect when the application for correction is made
and to the prior policy within twelve months after the termination thereof.
(3) A correction of a misclassification which results in a premium increase shall be
applied effective the employer's first normal policy renewal at least sixty days
subsequent to the date of the Bureau’s misclassification notice.
c. Any correction of a misclassification arising from discovery by the carrier of a material
misrepresentation or intentional omission by the insured, its agent, employees, officers
or directors shall be applied effective the date upon which it would have applied had
such material misrepresentation or intentional omission not been made. It is
recommended that a carrier claiming material misrepresentation or intentional omission
as contemplated in this Rule secure a declaratory judgment from the Common Pleas
Court establishing same prior to proceeding with application of this Rule.
d. The reallocation of payroll by a carrier among an insured's authorized classifications or
the Bureau requiring a carrier to reallocate payroll among an insured's authorized
classifications or to report payroll under an insured's authorized classifications for an
insured's current policy or for the insured's prior policy within twelve months after the
termination thereof does not constitute a class change or correction.
9. Carrier Determinations of Employment Status
A carrier’s determination of a person’s employment status (including but not necessarily
limited to questions regarding a person’s designation as an employee, independent
contractor, uninsured subcontractor, leased employee or temporary staff) is not subject to
the Bureau’s review or approval. Where a carrier’s determination of a person’s
employment status results in a request for authorization of a different or additional
classification(s), such request must be made in writing. The Bureau will determine the
applicability of any requested classification(s) in accordance with the classification
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guidelines set forth in this Manual. Classifications so approved by the Bureau shall be
applied to any policy to which the carrier’s determination of the person’s employment
status applies, if such policy expired or was terminated not more than 12 months before
the date on which the Bureau received the carrier’s written request.
This rule for determining the policy(ies) to which the approved classification(s) shall be
assigned will apply regardless of whether the authorization of the classification(s)
increases or decreases premium for the affected policy(ies). This rule shall govern in the
event this rule conflicts with any other rule in this Manual.
10. Classification Appeals
The Bureau’s assignment of an individual employer to a particular classification may be
appealed pursuant to Rule XVI, APPEALS FROM APPLICATION OF THE RATING
SYSTEM PROCEDURE, Section 1 of this Manual.
11. Mercantile Businesses/Stores
For mercantile businesses, such as stores or dealers, the single applicable store or dealer
classification is determined separately for each location.
D. SHOW THE CLASSIFICATIONS IN ITEM 4 OF THE INFORMATION PAGE
Show the proper classification wording, with or without notes, and show the code number in Item 4 of
the Information Page. Capitalized classification wording may be used instead of the entire wording.
Section 2 of this Manual, Classification Underwriting Guide, may be used for such wording.
RULE V – PREMIUM BASIS
Item 4 of the Information Page - continued
A. BASIS OF PREMIUM – TOTAL REMUNERATION
Premium shall be computed on the basis of the total remuneration paid or payable by the insured for
services of employees covered by the policy.
Exception
Some classifications have a different premium basis. For example, premium for domestic worker
classifications is computed on a per capita basis. Refer to Rule XIV.
B. REMUNERATION – PAYROLL
1. Definition
Remuneration means money or substitutes for money.
2. Inclusions
Remuneration includes:
a. Wages or salaries including retroactive wages or salaries;
b. Total cash received by employees for commissions or draws against commissions;
c. Bonuses;
d. Stock bonus plans – market value of stock at the time it is given to employee (refer to
Exclusions, m.);
e. Extra pay for overtime work;
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f. Pay for holidays, vacations or periods of sickness or accrued sick time;
g. Payment by an employer of amounts otherwise required by law to be paid by employees
to statutory insurance or pension plans, such as the Federal Social Security Act;
h. Payment to employees on any basis other than time worked such as piece work, profit
sharing or incentive plans;
i. Payment or allowance for hand tools or power tools used by hand provided by employees
and used in their work or operations for the insured;
j. The rental value of an apartment or a house provided for an employee based on
comparable accommodations;
k. The value of lodging other than an apartment or house received by employees as part of
their pay to the extent shown in the insured's records;
l. The value of meals received by employees as part of their pay to the extent shown in the
insured's records;
m. The value of store certificates, merchandise, credits or any other substitute for money
received by employees as part of their pay
n. Musicians or entertainers who are not independent contractors shall be included in
computation of premiums of hotels or restaurants (maximum of $400 per week for each
musician or entertainer);
o. Adjustments necessary to bring employees to federal minimum wage as reported by the
United States Department of Labor shall be included;
p. Payments for salary reduction, retirement or cafeteria plans (IRC 125) which are made
through deductions from the employee's gross pay;
q. Prevailing wage payments paid to employees based on required government-specified
minimum wage rates, including but not limited to the Davis-Bacon Act or the Pennsylvania
Prevailing Wage Act;
r. Annuity plans (see Section 1 Rule V, F.2. – Salary Reduction Plans);
s. Expense reimbursements to employees to the extent that an employer's records do not
substantiate that the expense was incurred as a valid business expense (see Section 1
Rule V, F.1 – Employee Expense Reimbursements);
t. Payment for filming or taping of commercials excluding subsequent residuals which are
earned by the commercial participant(s) each time the commercial appears in print or is
broadcast.
3. Exclusions
Remuneration excludes:
a. Payments by an employer to group insurance or group pension plans for employees, other
than payments covered by Rule V - B. 2. g.;
b. Payments made by the employer to a Group Insurance, Pension Plan or to an employee
directly in lieu of the foregoing because of the Provisions of a prevailing wage statute,
including but not limited to the Pennsylvania Prevailing Wage Act or the Davis-Bacon Act.
For additional information please see the Section 2 General Auditing and Classification
Information of this Manual.
c. The value of special rewards for individual invention or discovery;
d. Dismissal or severance payments except for time worked or accrued vacation;
e. Tips and other gratuities received by employees;
f. Payments for active military duty;
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g. Employee discounts on goods purchased from the employee's employer;
h. Expense reimbursements to employees to the extent that an employer's records
substantiate that the expense was incurred as a valid business expense (see Section 1
Rule V, F.1 – Employee Expense Reimbursements);
i. Supper money for late work;
j. Work uniform allowances;
k. Sick pay paid to an employee by a third party such as an insured's group insurance carrier
which is paying disability income benefits to a disabled employee;
l. Employer provided perquisites ("perks") such as:
1. an automobile;
2. an airplane flight;
3. a discount on property or services;
4. club memberships;
5. tickets to entertainment or sporting events;
m. Stock option plans – difference between market value of stock and lower option price is
not included as remuneration.
4. Payroll
Payroll means remuneration. The carrier rating values in this Manual shall be applicable to the
remuneration of all employees of the insured without exception, and compensation policies
shall not be written except upon the entire payroll of the risk which is the subject of the
insurance which risk shall be divided into risk classes where specifically permitted or directed
by these rules, but not otherwise. Under no circumstances shall a compensation policy be
written on any part of the risk leaving another part of the risk uninsured.
5. Employee Savings Plans
Employee Contributions Contributions, made in the form of an employee authorized
salary reduction, which are diverted by an employee for payment, by the employer, into a
savings plan shall be included as remuneration for premium computation purposes. Such
payments made by the employer into the plan, of employee salary reduction contributions,
shall not be employer contributions.
Employer Contributions Contributions of employer funds, made by the employer, the
amount which being determined by reference to employee contributions, shall not be
considered remuneration for premium computation purposes unless same contributions
are reported by the employer as current taxable income to the employee.
C. ESTIMATED PAYROLLS
1. Estimated Payrolls By Classification
For each classification shown on the Information Page, the estimated total annual payroll shall
be stated in the column headed "Premium Basis –Estimated Total Annual Remuneration."
2. Determination of Estimated Payrolls
Estimated payrolls shown on the Information Page shall reflect actual remuneration anticipated
by the insured during the policy period. Such estimates shall be subject to substantiation by
records or inspections.
3. Approval of Estimated Payrolls
Adequacy of estimated payrolls is subject to approval by the Pennsylvania Compensation
Rating Bureau
D. WHOLE DOLLARS – PAYROLLS
All payrolls shall be shown to the nearest dollar. A remainder of $.50 shall be rounded to the
next higher dollar.
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E. PAYROLL LIMITATION
1. How Payroll Limitation Applies
For executive officers and classifications with notes which indicate payroll limitation, the payroll
on which premium is based shall exclude that part of the employee's average weekly pay in
excess of the applicable weekly limitation, provided:
a. Books and records are maintained to show separately the total payroll earned by each
employee whose average weekly pay for the total time employed during the policy period
exceeds the weekly payroll limitation and
b. Separate records are maintained in summary by classification for such employees.
2. Partial Week
A part of a week shall be treated as a full week in determining average weekly pay.
F. BASIS OF PREMIUM Additional Information
1. Employee Expense Reimbursements
Reimbursement expenses (except for hand or power tools as provided for in Rule V., B. 2. i.)
paid to employees may be excluded from the audit provided that all three of the following
conditions are met:
a. The reimbursed expenses paid were incurred upon the business of the employer,
and
b. The amount of each employee’s expense payment is shown separately in the
records of the employer, and
c. The amount of each expense reimbursement --- reflects the actual expenses
incurred by the employee in the conduct of his or her work ---.
2. Salary Reduction Plans
In determining the remuneration to be used for premium computation purposes, no deduction
shall be permitted for contributions to employee benefit plans made by employees either directly
or through salary reduction agreements. The typical salary reduction plan involves a binding
salary reduction agreement through which a specific percentage of the employee's salary is not
paid to him or her but is paid into a pension, medical or savings plan (Section 125 IRC).
3. Strike Periods (Wages Paid)
Wages paid to employees who are not on strike but who are unable to perform their normal
duties because of a strike shall be assigned to the classification applicable to the work usually
performed by such employees, except that if any such employees perform absolutely no work
for their employer and are not present on their employer's premises during such period, such
wages shall be assigned to Code 953, Clerical Office Employees, provided the facts are clearly
disclosed by the employer's records.
4. Traveling Time Payments
Payments made by an employer to an employee to reimburse him or her for time spent in
traveling to or from work or to or from a specific job shall be considered as remuneration in
accordance with the provisions of Rule V., B. of the Manual, and such remuner-ation shall be
assigned to the Manual classification which applies to the work normally performed by such
employee.
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5. Wages Paid for Idle Time
a. The entire amount of wages paid for idle time shall be included as payroll.
b. Wages paid for idle time due to the following causes shall be assigned in their
entirety to the classification which applies to the work normally performed by the employee
involved:
(1). Suspension or delay of work on account of weather conditions.
(2). Delays while waiting for materials.
(3). Delays while waiting for another contractor to complete certain work.
(4). Delays arising from breakdown of equipment.
(5). "Stand-by" time where employees such as operators of cranes, hoists or
other equipment are on the job but their active services are not required
continuously.
(6). Special union requirements or agreements between employer and
employees calling for pay for idle time under specified circumstances.
(7). Other cause of similar nature.
c. Wages paid to key employees of construction, erection or stevedoring risks, such
as superintendents, foremen or engineers, for periods during which no jobs are in
progress, shall be assigned to the classification applicable to the work which each one
normally performs. (Exception: Reference Strike Periods – Wages Paid.)
d. The entire amount of wages paid for idle time to an employee engaged in work
other than construction, erection or stevedoring must be assigned without division to the
classification which normally applied to that employee.
6. Religious Exclusions (Members of certain religious sects whose tenets prohibit benefits from
insurance provided the sect makes provisions for its members).
Workers’ compensation insurance is not compulsory for the above individuals. As per Section
304.2(a) “An employer may file an application with the Department of Labor and Industry to be
excepted from the provisions of this Act in respect to certain employees. The application shall
include a written waiver by the employee of all benefits under the Act and an affidavit by the
employee that he is a member of a recognized religious sect or division thereof and is an
adherent of established tenets or teachings of such sect or division by reason of which he is
conscientiously opposed to the acceptance of the benefits of any public or private insurance
which makes payments in the event of death, disability…” Documentation to support the
above election must be in evidence at time of audit. Payroll to the above will then be excluded
for purposes of premium determination.
7. Members of Religious Orders
Refer to Section 2 of the Pennsylvania Workers’ Compensation Manual. In Pennsylvania,
because of the interest of some of the Catholic dioceses in providing coverage for members of
orders on a voluntary basis, a specific underwriting procedure as well as per capita rates were
adopted by the Bureau.
When such individual is assigned to perform duties in churches, hospitals, schools or other
institutions, those institutions may wish to provide coverage as well. Any remuneration paid to
the order on behalf of its members would be excluded, and the appropriate per capita rates
would be applied.
8. Subcontractors (Applicable Contracting Classifications)
Consideration has been given to questions which have arisen regarding the classification
procedure for a subcontractor who performs a single type of work on a contracting project or
job. This situation is illustrated by Code 603, Sewer Construction, where portions of the work
such as excavation may be subcontracted.
Consistent with the classification treatment which has been generally observed, it has been
ruled that such subcontracted work shall be classified on the basis of the classification
describing the particular type of work involved. Thus, the subcontractor who only performs
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excavation work in connection with the construction of a sewer would be classified as Code
609, Excavation, rather than as Code 603, Sewer Construction.
The ruling in connection with concrete construction has been continued. This requires that all
operations including making and erecting forms, placing reinforcing steel and stripping forms,
when done by subcontractors, shall be assigned to the appropriate concrete construction
classification.
These rulings apply only to insured subcontractors. Uninsured subcontractors, covered under
the principal contractor’s policy, will continue to be classified on the basis of the classifications
which would apply if the work were performed by the principal’s own employees.
9. Outworkers/Homeworkers
Under Section 104 of the Pennsylvania Workers’ Compensation Act an employee is defined as
“All natural persons who perform services for another for a valuable consideration exclusive of
persons to whom articles or materials are given out to be made up, cleaned, washed, altered,
ornamented, finished or repaired, or adapted for sale in the workers’ own home, or on other
premises, not under the control or management of the employer.”
A review of the relevant case law by Bureau counsel indicated the definition of an “employee
is not of significance in disputes over the coverage status for individuals who are injured while
working in the home. Instead, the focus is on whether the injury occurred in the furtherance of
the business of the employer. Therefore, the ability to resolve disputes involving coverage
status for an outworker/homeworker, as defined in the Act, remains a legal question beyond
the Bureau’s authority. Accordingly, the employee status of an outworker/homeworker is left to
the discretion of the individual insurance carrier.
RULE VI – RATING VALUES AND PREMIUM DETERMINATION
A. BUREAU RATING VALUES
1. Bureau Loss Cost
Bureau Loss Costs – Dollar amounts per unit of exposure attributable to the payment of losses
under workers compensation and employers liability coverages, filed by the Bureau based on
the aggregate experience of all Bureau members and approved by the Insurance
Commissioner.
2. Disease Or Radiation Loading
a. The Bureau Rating Value for a classification code number followed by a letter (a) or (b)
etc. may include a disease loading. Such a loading may be removed upon approval of the
Pennsylvania Compensation Rating Bureau.
b. The Bureau Loss Costs shown in the Manual include occupational disease loadings which
correspond to the usual exposure to diseases by classifications..
c. A supplemental occupational disease or radiation loading may be applied to the carrier rate
for any individual business where the occupational disease or radiation hazard is
abnormal, subject to approval by the Pennsylvania Insurance Commissioner. When a
carrier plans to apply for the supplemental loading, the carrier shall supply the Bureau with
an inspection report either by an insurance carrier, Department of Labor and Industry or an
outside source which supports the abnormal disease or radiation exposure. The carrier
shall also recommend a value for the supplemental loading. The request and supporting
documentation shall be forwarded by the Bureau to the Insurance Commissioner. Upon
approval by the Insurance Commissioner, the supplemental loading shall be published by
the Bureau on the business’ Bureau data card for a minimum of one year. The
supplemental loading may be removed only by an inspection report performed by an
insurance company, Department of Labor and Industry or another agency evidencing the
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abnormal exposure no longer exists. The Bureau shall also forward this request and
documentation to the Insurance Commissioner for review and action. The supplemental
disease or radiation loading is non-ratable in the experience and retrospective rating
plans. No supplemental occupational disease or radiation loading shall be used absent
explicit approval from the Insurance Commissioner.
3. Premium Adjustment Factor
4. Experience Rating Factor
5. Terrorism.
Premium for Terrorism is calculated on the basis of total payroll according to Rule V. The
premium charge is calculated by dividing a risk’s total payroll by $100 and multiplying the result
times the carrier’s rating value. This premium is applied after standard premium and is not
subject to any other modifications, including, but not limited to, premium discount, experience
rating, merit rating, schedule rating, or retrospective rating. Non-Payroll exposures are not
subject to premium charges for Terrorism. Policies issued on an “If Any” basis will not be
charged this premium, unless premium develops during the policy term or at audit. Per capita
charges are not subject to premium for Terrorism.
Terrorism shall be separately stated on the Standard Policy and shall be designated to Code
9740.
6. Catastrophe (other than Certified Acts of Terrorism)
Premium for Catastrophe (other than Certified Acts of Terrorism) is calculated on the basis of
total payroll according to Rule V. The premium charge is calculated by dividing a risk’s total
payroll by $100 and multiplying the result times the carrier’s rating value. This premium is
applied after standard premium and is not subject to any other modifications, including, but not
limited to, premium discount, experience rating, merit rating, schedule rating, or retrospective
rating. Non-payroll exposures are not subject to premium charges for Catastrophe (other than
Certified Acts of Terrorism). Policies issued on an “If Any” basis will not be charged this
premium, unless premium develops during the policy term or at audit. Per capita charges are
not subject to premium for Catastrophe (other than Certified Acts of Terrorism).
Catastrophe (other than Certified Acts of Terrorism) shall be separately stated on the Standard
Policy and shall be designated to Statistical Code 9741.
7. Employer Assessments Pursuant to Act 57 of 1997
Act 57 of 1997 requires that “... the assessments for the maintenance of the Subsequent Injury
Fund, the Workmen’s Compensation Supersedeas Fund and the Workmen’s Compensation
Administration Fund under sections 306.2, 443 and 446 of the act of June 2, 1915 (P.L. 736,
No. 338), known as the “Workers’ Compensation Act, shall no longer be imposed on insurers
but shall be imposed, collected and remitted through insurers in accordance with regulations
promulgated by the Department of Labor and industry.”
In compliance with the above referenced provisions of Act 57 of 1997, the insurance carrier
issuing any Standard Policy providing workers compensation insurance other than Coal Mine
under the Workers’ Compensation Act in Pennsylvania shall impose on and collect from the
employer/entity insured thereunder an Employer Assessment computed according to the
following formula:
Employer Assessment equals Act 57 of 1997 Employer Assessment Factor times Employer
Assessment Premium Base.
The Employer Assessment shall be computed, imposed and collected consistent with the
following definitions of terms:
Act 57 of 1997 Employer Assessment Factor - a factor expressed to four decimal places
proposed by the Pennsylvania Compensation Rating Bureau and approved by the
Pennsylvania Insurance Commisioner for the specific purpose of computing employer
assessments in conformance with Act 57 of 1997.
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Employer Assessment Premium Base - Calculation of Employer Assessment Premium Base
proceeds by adding back to the total policy premium the amount of any applicable Small
Deductible Premium Credit or Large Deductible Premium Credit. Small or Large Deductible
Premium Credits include either of the following statistical codes in Pennsylvania:
9663
9664
Employer Assessments imposed, collected and remitted pursuant to Act 57 of 1997 shall be
separately stated on the Standard Policy and shall be designated by Statistical Code 0938.
For reference purposes, two examples of the intended determination of the appropriate
Employer Assessment Base consistent with this rule are shown below. The first example
presents a risk for which a deductible credit applies before experience modification. The
second example presents a risk for which a deductible credit applies after experience
modification.
Example: Deductible Credit Before Experience Modification
Hypothetical Risk Insured in Classifications 665, Painting and Decorating and 953, Clerical
Office. Risk has taken a small deductible policy, and qualifies for Experience Rating, a Schedule
Rating Credit, a Pennsylvania Construction Classification Premium Adjustment Credit and a
Certified Safety Committee Credit. Individual rating values are selected values used only
for purposes of illustrating the derivation of the appropriate Employer Assessment Base
given the respective amounts of premium components shown and are not intended to
relate to any specific carrier or insured’s actual market premium.
Class Code Exposure (Payrolls) Carrier Rate Manual Premium
665 $255,000 $7.84 $19,992
953 48,000 .24 115
Total Manual Premium: $20,107
Deductible Credit Factor: 0.163
Deductible Premium Credit (Code 9664): $3,277
Total Subject Premium: $16,830
Experience Modification: 0.930
Total Standard Premium: $15,652
Schedule Rating Credit Factor: 0.250
Schedule Rating Credit (Code 9887): $3,913
Standard Premium After Schedule Rating: $11,739
Certified Safety Committee Credit Factor: 0.05
Certified Safety Committee Premium Credit: $587
PCCPAP Credit Factor: 0.25
PCCPAP Premium Credit: $2,935
Premium Subject to Premium Discount: $8,217
Premium Discount: $351
Final Policy Premium: $7,866
Employer Assessment Base:
Final Policy Premium plus Deductible Premium Credit
(Stat Code 9664) or
$7,866 + $3,277 = $11,143
Employer Assessment:
Employer Assessment Base x Employer Assessment Factor, rounded to nearest whole dollar.
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Example: Deductible Credit After Experience Modification
Hypothetical Risk Insured in Classifications 665, Painting and Decorating and 953, Clerical
Office. Risk has taken a large deductible policy, and qualifies for Experience Rating, a Schedule
Rating Credit, a Pennsylvania Construction Classification Premium Adjustment Credit and a
Certified Safety Committee Credit. Individual rating values are selected values used only for
purposes of illustrating the derivation of the appropriate Employer Assessment Base
given the respective amounts of premium components shown and are not intended to
relate to any specific carrier or insured’s actual market premium.
Class Code Exposure (Payrolls) Carrier Rate Manual Premium
665 $255,000 $7.84 $19,992
953 48,000 0.24 115
Total Manual Premium: $20,107
Experience Modification: 0.930
Total Standard Premium: $18,700
Schedule Rating Credit Factor: 0.250
Schedule Rating Credit (Code 9887): $4,675
Standard Premium After Schedule Rating: $14,025
Certified Safety Committee Credit Factor: 0.05
Certified Safety Committee Premium Credit: $701
PCCPAP Credit Factor: 0.25
PCCPAP Premium Credit: $3,506
Standard Premium After PCCPAP: $9,818
Deductible Credit Factor: 0.600
Deductible Premium Credit (Code 9663): $5,891
Premium Subject to Premium Discount: $3,927
Premium Discount: $0
Final Policy Premium: $3,927
Employer Assessment Base:
Final Policy Premium plus Deductible Premium Credit
(Stat Code 9663) or
$3,927 + $5,891 = $9,818
Employer Assessment:
Employer Assessment Base x Employer Assessment Factor, rounded to nearest whole dollar.
B. CARRIER RATING VALUES
1. Expense Constant
Expense Constant (if any) is determined by individual carriers’ rating values. It applies to every
policy and it covers expenses such as those for issuing, recording and auditing, which are
common to all workers compensation policies regardless of size.
2. Minimum Premium
Minimum Premium (if any) is determined by individual carriers' rating values. It is an expression
of the lowest premium amount for which a single risk can be written and carried for any period
of time.
3. Premium Discount
Premium Discount (if any) is determined by individual carriers’ rating values. It recognizes that
the relative expense of issuing and servicing larger premium policies is less than for smaller
policies.
4. Retrospective Rating Factor
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C. PREMIUM
Premium for each classification shown on the policy is determined by multiplying the basis of premium
by the carrier rate dividing by 100..
Example of B above
Basis of premium - payroll = $90,000
Carrier Rate = x 1.50
Premium = $ 1,350
$90,000 x 1.50 = $ 1,350
100
D. WHOLE DOLLARS – PREMIUM
All premiums shall be shown to nearest dollar. A remainder of $.50 shall be rounded to next higher
dollar.
E. PREMIUM MODIFICATION EXPERIENCE RATING PLAN
1. If the risk is subject to experience rating, the experience rating modification shall be shown in
Item 4 of the Information Page and applied to the premium in accordance with the Experience
Rating Plan Section.
2. Copies of Experience Rating Calculation
a. The insurance carrier is furnished with the experience rating calculation.
Subsequent insurance carriers may obtain copies of the experience rating
calculation by way of special service at the appropriate charge.
b. The Bureau shall furnish to any insured employer upon his written request, a copy
of the experience rating calculation of that employer at an appropriate charge.
c. The insurance carrier of record shall be furnished with an experience rating
calculation established by the Experience Rating Procedure not more than 90 days
prior to the effective date of the rating.
F. PREMIUM DETERMINATION FOR FEDERAL AND MARITIME INSURANCE
Additional rating procedures are in Rules XII and XIII for insurance for employers subject to the U.S.
Longshore and Harbor Workers' Act, the Federal Employers Liability Act and Admiralty Law.
G. PREMIUM ALGORITHM
Pennsylvania and Delaware Premium Algorithm Preface:
Optional use upon July 1, 2000. Mandatory use for policies effective on or after January 1,
2002.
The computation of workers compensation premium includes a broad complement of potential rating
values, pricing programs and other similar or related variables. To the extent that these component
parts of premium determination may be applied in a prescribed sequence and using defined formulas
and/or relationships, several potential benefits arise including the following:
z Competitive differences within the marketplace can be more clearly defined and consistently applied;
z Similarly situated risks can receive comparable treatment with respect to specific rating values, pricing
programs or other factors, increasing the equity of the marketplace;
z Analysis of the effects of various components of overall premium determination can be better understood and
more intelligently compared across carriers, states and/or time;
z In the event that new pricing programs or other factors are introduced in the future, the defined existing
formulas can provide a consistent basis for the development of programs and system procedures within the
workers compensation industry.
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SECTION 1 UNDERWRITING RULES
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Pennsylvania and Delaware Workers Compensation Premium Algorithm Premium Calculation Algorithm
Associated
Line # Item Name Statistical
Code Line # Source & Derivation
(1) Classification xxxx (1) Carrier value
(2) Exposure xxxx (2) Risk characteristic
(3) Carrier Rating Value xxxx (3) Carrier value
(4) Classification Manual Premium (4) (2)/100x(3) if classification has payroll exposure.
Special procedures apply to non-payroll classes
(5) Total Policy Manual Premium (5) Sum of (4) for all classifications on the policy
(6) Employer Liability Increased Limits Factor xxxx (6) Carrier value
(7) Employer Liability Increased Limits
Premium Charge (7) (5)x[(6) expressed as a decimal]
(8) Minimum Premium Employer Liability
Increased Limits 9848 (8) Carrier value
(9) Minimum Premium Employer Liability 9848 (9) [(8)-(7)] if (7)<(8) and (6) >0, otherwise zero
Increased Limits Premium Charge
(10) Subject Deductible Credit Percentage 9664 (10) Carrier value
(11) Subject Deductible Premium Credit 9664 (11) [(5)+(7)+(9)]x[(-10) expressed as a decimal]
(12) Waiver of Subrogation Charge 0930 (12) Carrier value - subject to experience modification
(13) Waiver of Subrogation Premium 0930 (13) Value from Line (12)
(14) Total Subject Premium (14) [(5)+(7)+(9)+(11)+(13)]
(15) Experience Modification 9898 (15) Zero for non-experience-rated risks
(16) Modified Premium (16) (14)x(15)
(17) Merit Rating Credit Factor 9885 (17) Zero if Merit Rating Credit does not apply
(18) Merit Rating Credit 9885 (18) (14)x[(-17) expressed as a decimal]
(19) Merit Rating Neutral Factor 9884 (19) Zero whether Merit Rating Neutral Adjustment (no
credit or debit) does or does not apply
(20) Merit Rating Neutral Adjustment 9884 (20) (14)x[(19) expressed as a decimal]
(21) Merit Rating Debit Factor 9886 (21) Zero if Merit Rating Debit does not apply
(22) Merit Rating Charge 9886 (22) (14)x[(21) expressed as a decimal]
(23) Premium After Experience
Modification or Merit Rating (23) (16) if Experience-Rated, [(14)+(18)+(20)+(22)] if
Merit-Rated, (14) if Non-Rated
(24) Non-Ratable Classifications xxxx (24) Carrier Value
(25) Non-Ratable Classifications Exposure (25) Portion of payroll exposure subject to Non-Ratable
Classifications
(26) Non-Ratable Classification Rating Value xxxx (26) Carrier Value
(27) Non-Ratable Classification Premium (27) (25)/100x(26) [based on applicable Non-Ratable
Classification exposure]
(28) Aircraft Seat Surcharge Exposure (# of
seats) 9108 (28) Actual number of seats for insured risk. Subject to
maximum 10 seats per aircraft
(29) Aircraft Seat Surcharge 9108 (29) Carrier Value
(30) Aircraft Seat Surcharge Premium Charge 9108 (30) (28) x (29)
(31) Workfare Program Employees Exposure
(PA) 0982 (31) Number of person weeks. A partial workweek for
any worker to be counted as 1 person week.
(32) Workfare Program Employees Rating Value
(PA) 0982 (32) Carrier Value
(33) Workfare Program Employees Premium
(PA) 0982 (33) (31) x (32)
(34) Non-Ratable Classification Premium Total (34) Sum of all (27)+(30)+(33) premiums
(35) Non-Ratable Classification Increased Limits
Factor xxxx (35) Carrier value
(36) Non-Ratable Classification Increased Limits
Premium Charge xxxx (36) (34)x [ (35) expressed as a decimal]
(37) Minimum Premium Non-Ratable
Classification Increased Limits 9848 (37) Carrier value
(38) Minimum Premium Non-Ratable
Classification Increased Limits Premium
Charge
9848 (38) [(37)-(36)] if (36) < (37) and (35) > 0, otherwise zero
(39) Premium Before Schedule Rating (39) (23)+(34)+(36)+(38)
(40) Schedule Rating Plan Adjustment Factor 9887/9889 (40) Carrier value - use 9887 for schedule credits and
9889 for schedule debits
PENNSYLVANIA WORKERS COMPENSATION MANUAL
SECTION 1 UNDERWRITING RULES
EFFECTIVE DATE: DECEMBER 1, 2009
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Pennsylvania and Delaware Workers Compensation Premium Algorithm
Premium Calculation Algorithm
Associated
Line # Item Name Statistical
Code Line # Source & Derivation
(41) Schedule Rating Plan Premium
Adjustment 9887/9889 (41) (39)x[(40) expressed as a
decimal]. For schedule credits
Line (41) will be negative
(42) Certified Safety Committee Credit Factor
(PA) 9890 (42) Credit applies if insured is
certified.
(43) Certified Safety Committee Premium
Credit (PA) 9890 (43) [(39)+(41)]x[(-42) expressed as a
decimal]
(44) Workplace Safety Program Credit Factor
(DE) 9880
(44) Credit applies if insured qualifies
(45) Workplace Safety Program Premium
Credit (DE) 9880 (45) [(39)+(41)]x[(-44) expressed as a
decimal]
(46) Construction Classification Premium
Adjustment Program Credit Factor 9046 (46) Based on wage level(s),
application to rating organization
(47) Construction Classification Premium
Adjustment Program Premium Credit 9046 (47) [(39)+(41)]x[(-46) expressed as a
decimal]
(48) Drug-Free Workplace Factor (DE) 9846 (48) Carrier value
(49) Drug-Free Workplace Credit (DE) 9846 (49) [(39)+(41)+(45)+(47)]x[(-48)
expressed as a decimal]
(50) Managed Care Factor (DE) 9874 (50) Carrier value
(51) Managed Care Credit (DE) 9874 (51) [(39)+(41)+(45)+(47)+(49)]x[(-50)
expressed as a decimal]
(52) Package Credit Factor (DE) 9721 (52) Carrier value
(53) Package Credit (DE) 9721 (53) [(39)+(41)+(45)+(47)+(49)+(51)]x[(
-52) expressed as a decimal]
(54) Premium After Managed Care and
Package Credit If Applicable (54) [(39)+(41)+(43)+(45)+(47)+(49)+(5
1)+(53)]
(55) Assigned Risk Surcharge Factor (DE) 0277 (55) May apply to some or all assigned
risks based on plan and
characteristics of individual
insured
(56) Assigned Risk Premium Surcharge (DE) 0277 (56) (54)x[(55) expressed as a decimal]
(57) Deductible Credit Factor 9663 (57) Carrier value
(58) Deductible Premium Credit 9663 (58) [(54)+(56)]x[(-57) expressed as a
decimal]
(59) Loss Constant 0032 (59) Carrier value - may vary based on
risk premium size
(60) Loss Constant Charge 0032 (60) Line (59) if applicable
(61) Short Rate Cancellation Factor 0931 (61) Carrier value - zero if short rate
cancellation does not apply
(62) Short Rate Premium 0931 (62) [(54)+(56)+(58)+(60)]x[(61)-
1.0000] if (61)>0, otherwise zero
(63) Expense Constant 0900 (63) Carrier value if applicable
(64) Expense Constant Charge 0900 (64) Line (63)
(65) Minimum Premium 0990 (65) Carrier value
(66) Minimum Premium Charge 0990 (66) If (65)>[(54)+(56)+(58)+(60)+(62)+
(64)], (65)-
[(54)+(56)+(58)+(60)+(62)+(64)],
otherwise zero
(67) Unit Statistical Report Total Standard
Premium (67) [(54)+(56)+(58)+(60)+(62)+(66)]
(68) Premium Discount Amount 0063/0064 (68) Carrier value based on
[(54)+(56)+(58)+(60)+
(62)+(66)]
PENNSYLVANIA WORKERS COMPENSATION MANUAL
SECTION 1 UNDERWRITING RULES
EFFECTIVE DATE: DECEMBER 1, 2009
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Pennsylvania and Delaware Workers Compensation Premium Algorithm
Premium Calculation Algorithm
Associated
Line # Item Name Statistical
Code Line # Source & Derivation
(69) Additional premium Waiver of
Subrogation (flat charge) 9115 (69) Carrier value(s)
(70) Terrorism 9740 (70) (Total payroll/100) x carrier rating
value
(71) Catastrophe (other than Certified
Acts of Terrorism
9741 (71) (Total payroll/100) x carrier rating
value
(72) Total Policy Premium Subject to
Employer Assessment (72) (64)+(67)-(68)+(69)+(70)+(71)
(73) Employer Assessment Factor
Pursuant to Act 57 of 1997 (PA) 0938 (73) Bureau value for the specific
purpose of computing employer
assessments
(74) Employer Assessment Amount
Pursuant to Act 57 of 1997 (PA) 0938 (74) [(72)-(11)-(58)]x(73) NOTE: Cells
(11) and (58) are credits.
Subtracting these credits as
shown effectively adds the
premium reduction given for
deductible coverage back into the
premium for purposes of
calculating employer assessments
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SECTION 1 UNDERWRITING RULES
EFFECTIVE DATE: DECEMBER 1, 2009
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RULE VII – PREMIUM DISCOUNT
Item 4 of the Information Page
A. PREMIUM DISCOUNT
Premium Discount (if any) is determined by an individual carriers' rating values. It recognizes that the
relative expense of issuing and servicing larger premium policies is less than for smaller premium
policies.
B. COMBINATION OF POLICIES
1. Combination Permitted
Two or more policies issued to the same insured by one or more insurance carriers under the
same management may be combined for the purpose of computing the premium discount for
that insured.
2. Combination Procedure
If such separate policies have different expiration dates, the combination for the purpose of 1.
above is subject to the following:
a. The Bureau shall determine the effective date for the application of premium discount.
b. All such policies in force prior to such effective date shall be cancelled and rewritten as
of the effective date.
c. All policies effective after the effective date of the combination shall be written to expire
concurrently with other policies in the combination.
C. WRAP - UP LARGE CONSTRUCTION PROJECTS
The first step in setting up a “wrap-up” program requires the carrier to request approval from:
Compensation Actuary, Bureau of Regulation of Rates and Policies, Pennsylvania Insurance
Department, 1311 Strawberry Square, Harrisburg, PA 17120.
The following application of the premium discount is optional for wrap up construction projects which
are not under a retrospective rating plan:
Policies issued to two or more legal entities engaged in a construction, erection or demolition project
may be combined for the purpose of computing premium discount, subject to the following conditions:
1. Insurance Carrier
All such policies must be issued by one or more insurance carriers under the same
management.
2. Policy Limitation
The policies shall be limited to insurance on such large construction projects.
3. Eligible Entities
Entities eligible for combination shall be limited to the general contractor (including any owner
or principal acting as a general contractor) and subcontractors performing work under contracts
let on an ex-insurance basis. In addition, if the contract between the owner or principal and
such general contractor is on an ex-insurance basis, the owner or principal shall be an eligible
entity under this rule.
4. Carrier Coverage Responsibility
The carrier’s coverage responsibility in a wrap-up project is for the duration of that project.
Cancellation of such coverage is prohibited except for non-payment of premium.
5. Bureau Notification
The Bureau must be notified of the method by which the wrap-up policies will be identified.
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EFFECTIVE DATE: DECEMBER 1, 2009
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6. Separate Policy Requirement
A separate policy is required for each entity included in the wrap-up plan and each policy is
subject to that entity’s own experience rating modification.
7. Experience Modifications
The experience developed by each entity in the combinations will be used in calculating the
future experience modifications for the entity. There will be no experience rating for the project
as a unit.
RULE VIII – LIMITS OF LIABILITY
Item 3-B of the Information Page
A. WORKERS COMPENSATION AND EMPLOYERS LIABILITY POLICY
1. Part One – Workers Compensation
There is no limit of liability in the standard policy for Part One – Workers Compensation. The
policy provides all benefits required by the Pennsylvania Workers Compensation Law and
Occupational Disease Act stated in Item 3-A of the Information Page.
2. Part Two – Employers Liability
a. Standard Limits
The standard limits of liability under Part Two are:
Bodily Injury by Accident: $100,000 – each accident
Bodily Injury by Disease: $100,000 – each employee
Bodily Injury by Disease: $500,000 – policy limit.
b. Increased Limits
The limits under Part Two may be increased, subject to the following:
(1) The limits of liability shall be the same for all states specified in Item 3-A of the
Information Page.
(2) The additional premium for increased limits shall be determined by multiplying the
total premium by the percentage in the following Table for Increased Limits. For
this purpose, total premium shall be computed after application of any carrier rate
but before application of experience rating modification or retrospective rating
adjustment.
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TABLE FOR INCREASED LIMITS
Classification
Codes
Limits of Liability
Percentage
(000s omitted)
9803 100 / 100 / 1,000 .70%
9804 100 / 100 / 2,500 1.20%
9805 100 / 100 / 5,000 1.70%
9806 100 / 100 / 10,000 2.40%
9807 500 / 500 / 500 1.90%
9808 500 / 500 / 1,000 2.20%
9809 500 / 500 / 2,500 2.70%
9810 500 / 500 / 5,000 3.20%
9811 500 / 500 / 10,000 3.90%
9812 1,000 / 1,000 / 1,000 3.30%
9813 1,000 / 1,000 / 2,500 3.80%
9814 1,000 / 1,000 / 5,000 4.40%
9815 1,000 / 1,000 / 10,000 5.00%
over
9816 1,000 / 1,000 / 10,000 (a)
(a) Apply to Bureau for higher limit charges.
(3) The premium for increased limits shall be subject to any experience rating
modification, merit rating and retrospective rating. The premium for increased
limits on non-ratable classifications is not subject to any experience rating
modifications, merit rating and retrospective rating.
c. Accident Limit
The limit of liability under Part Two for Bodily Injury by accident applies to all bodily injury
arising out of any one accident.
d. Disease Limits
The limit of liability under Part Two for Bodily Injury by Disease - each employee –
applies as a separate limit to bodily injury by disease to any one employee and the limit
of liability for Bodily Injury by Disease - policy limit applies as an aggregate limit for all
bodily injury by disease, regardless of the number of employees who sustain bodily
injury by disease.
e. Show Limit on the Information Page
A limit of liability under Part Two must be stated in Item 3-B of the Information Page.
B. VOLUNTARY COMPENSATION INSURANCE
1. Standard Limits
The standard limits of liability under Part Two Employers Liability Insurance for employees
subject to voluntary compensation insurance are:
Bodily Injury by Accident: $100,000 – each accident
Bodily Injury by Disease: $100,000 – each employee
Bodily Injury by Disease: $500,000 – policy limit
The limit of liability for Bodily Injury by Accident applies to all bodily injury arising out of any one
accident. The limit of liability for Bodily Injury by Disease – each employee – applies as a
separate limit to bodily injury by disease to any one employee and the limit of liability for Bodily
Injury by Disease – policy limit – applies as an aggregate limit for all bodily injury by disease,
regardless of the number of employees who sustain bodily injury by disease.
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EFFECTIVE DATE: DECEMBER 1, 2009
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2. Increased Limits
The standard limits under Part Two Employers Liability for employees subject to voluntary
compensation insurance may be increased. The premium for the increased limits shall be
determined on the basis of the factors in the following table:
TABLE FOR INCREASED LIMITS
Limit of Liability
Factor
(000s omitted)
100 / 100 / 1,000 1.053
100 / 100 / 2,500 1.127
100 / 100 / 5,000 1.225
100 / 100 / 10,000 1.284
500 / 500 / 500 1.186
500 / 500 / 1,000 1.206
500 / 500 / 2,500 1.286
500 / 500 / 5,000 1.368
500 / 500 / 10,000 1.424
1,000 / 1,000 / 1,000 1.280
1,000 / 1,000 / 2,500 1.357
1,000 / 1,000 / 5,000 1.436
1,000 / 1,000 / 10,000 1.509
over
1,000 / 1,000 / 10,000 (a)
(a) Apply to Bureau for higher limit factor
3. Premium Determination
Premium shall be determined on the basis of the workers compensation rules, classifications
and Bureau rating values in this Manual for the state workers compensation law designated in
the schedule in the Voluntary Compensation and Employers Liability Coverage Endorsement.
4. Payroll Records
When voluntary compensation insurance is provided for a group of employees, separate payroll
records shall be maintained by the insured for the designated group of employees.
RULE IX – SPECIAL CONDITIONS OR OPERATIONS AFFECTING COVERAGE
A. EXECUTIVE OFFICERS
1. Definition
Executive Officers of a corporation are the President, Vice President, Secretary, Treasurer or any
other officer appointed or elected in accordance with the charter or by-laws of a corporation or
unincorporated association.
2. Law And Status
Executive Officers of a corporation are covered under the Pennsylvania Workers' Compensation
Law and have the same status as employees under the policy.
Exceptions
(1) Elected officers of Pennsylvania or its political subdivisions are not considered employees;
therefore, they are not covered by the policy.
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(2) An executive officer of a for-profit corporation or an executive officer of a nonprofit corporation
who serves voluntarily and without remuneration may elect not to be an "employee" of the
corporation. For the purposes of this exclusion, an executive officer of a for-profit corporation is
an individual who has either an ownership interest in a Subchapter S corporation as defined by
the Act of March 4, 1971 (P.L. 6, No. 2), known as the "Tax Reform Code of 1971 ," or an
interest of at least five percent in a Subchapter C corporation as defined by the Tax Reform
Code of 1971.
3. Executive Officer Exclusion Procedure
a. An employer who wishes to exempt an executive officer(s) from coverage under their workers
compensation policy may obtain the forms listed below from either the Commonwealth of
Pennsylvania, Department of Labor & Industry - Bureau of Workers' Compensation, 1171
South Cameron Street, Room 103, Harrisburg, Pennsylvania 17104-2501 or their insurance
carrier, agent or broker.
Application for Executive Officer Exception from the Provisions of the Pennsylvania Workers'
Compensation Act: Section 104 LIBC - 509 07-05.
Executive Officer's Affidavit LIBC - 513 0705
(Note: Copies of the above forms are found in Section 3 of this Manual)
b. The employer must return both completed forms to their insurance company prior to the
exclusion date. The carrier will endorse their policy by attaching an Exclusion of Executive
Officers Endorsement – Pennsylvania (WC 37 03 10-C). As a general rule, executive officers
may be excluded only on the effective date of the policy. Any exceptions to this general rule
must be approved in writing by the carrier issuing the policy.
c. This Executive Officer Exclusion Procedure must be repeated each time a policyholder wishes
to change the status of any executive officer or secures coverage from a different carrier group.
d. Subchapter C and S corporations with no employees must contact the Bureau of Workers
Compensation, 1171 South Cameron Street, Room 103, Harrisburg, Pennsylvania 17104-2501
for Executive Officer Exemption Certificates. (717 783 5421)
(NOTE: Carrier group is defined as an insurance carrier sharing the same controlling
ownership.)
4. Executive Officers – MULTIPLE CORPORATE ENTERPRISES
An executive officer may either receive a salary from only one or from several corporations
insured under one policy. In other instances several policies may be issued to cover several
corporations and an executive officer may receive a salary from each of these corporations. The
following procedure shall apply in these instances:
Where it is permissible to include more than one corporation on a single policy and such
corporations are insured by a single carrier whether under one or more policies, the several
corporations shall be considered as a unit with respect to the application of the Executive
Officers Rule. In all other cases the rule shall apply on a policy basis.
5. Executive Officers - REMUNERATION – TREATMENT OF:
1. The remuneration of an executive officer shall not be included with the payroll of the risk
for premium computation purposes, provided:
(a) That such officer is elected for the value of his or her name or because of stock
holdings, has no duties and does not come on the premises, except perhaps to attend
directors' meetings.
(b) That such officer because of age or for other reasons, ceases to perform any
duties and does not come on the premises, except perhaps to attend directors' meetings.
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SECTION 1 UNDERWRITING RULES
EFFECTIVE DATE: DECEMBER 1, 2009
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2. The remuneration of an executive officer shall be included with the payroll of the risk for
premium computation purposes, subject to the minimum and maximum provisions of the Basic
Manual, provided:
(a) That such executive because of age or for other reasons, ceases to perform any
duties, but nevertheless, frequently visits the premises of the risk.
(b) That such officer frequently visits the premises of the risk for business
conferences, directors' meetings or similar duties, although also an officer or employee of
another risk in the operations of which he takes an active interest.
3. Under the following conditions, the amount of remuneration of executive officers which
shall be included with the payroll of the risk for premium computation purposes, subject to the
minimum and maximum amounts of the Basic Manual, shall be as indicated below:
(a) Where the officer draws no salary in fact, but a regular salary is credited to him or her on
the books, the amount so credited shall be included in the payroll of the risk as his or her
remuneration.
(b) Where the officer draws no salary in fact, but a regular salary is credited to him or her on
the books and subsequently charged back to such officer, the amount so credited shall be
included in the payroll of the risk as his or her remuneration regardless of such charge off.
(c) Where the officer draws no regular salary but draws such various sums as his or her needs
or the conditions of the business dictate, the actual amount drawn shall be included in the
payroll of the risk as his or her remuneration.
(d) Where the officer receives no salary in fact, either drawn or credited, or where the records
presented to the auditor fail to disclose the salary, the amount to be included in the payroll
of the risk shall be the applicable manual minimum per week.
6. Premium Determination
Premium for executive officers, other than elected officers of Pennsylvania or its political subdivisions,
shall be based on their total payroll, subject to the following: (For further information refer to Section 1,
Rule IX)
a. The requirements of Rule V-E.
b. The minimum individual payroll for an executive officer is $400 per week.
c. The maximum individual payroll for an executive officer is $2,000 per week.
d. These limitations apply to the average weekly payroll of each executive officer for the number
of weeks the officer was employed during the policy period.
e. A part of a week shall be considered a full week in determining the average weekly payroll.
7. Assignment of Payroll
Payroll assignment shall be made in the same manner as for any employee. No executive officer's
payroll may be assigned to the standard exception classification unless that officer's duties fulfill the
definition of either Salesmen 951 or Office 953. See Rule IV.
8. Flight Duties
Payroll of an executive officer who is a pilot or member of the flying crew of an aircraft used in the
insured's business shall be assigned as follows:
a. For each week during which the executive officer did not perform flight duties, assign the
officer's payroll as provided in Rule IX-A-4.
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b. For each week during which the executive officer performed flight duties, assign the officer's
payroll for that week to Code 7421 Transportation of Personnel for Business. If an executive
officer's non-flying duties in such a week are subject to a higher rated classification, that higher
bureau loss cost classification shall be assigned in that week.
Rules 5a and b apply on the basis of the pilot's log book required under Federal regulations or other
verifiable records.
If Code 7421 Transportation of Personnel for Business applies and verifiable records are not
maintained to indicate those weeks during which flying is performed by executive officers, their payroll
shall be assigned to the highest bureau loss cost classification which applies to any of their
operations.
B. REAL ESTATE SALESPERSON/BROKER LICENSED INSURANCE AGENT – EXCEPTION
Any person who is a licensed real estate salesperson or an associate real estate broker, affiliated with
licensed real estate broker or a licensed insurance agent affiliated with a licensed insurance agency,
under written agreement, remunerated on a commission only basis and who qualifies as an
independent contractor for state tax purposes or for federal tax purposes under the Internal Revenue
Code of 1986 (Public Law 99-514, 26 U.S.C. § 1 ET seq.) is exempt from coverage under the
Workers' Compensation Act.
C. PROFESSIONAL AND SEMIPROFESSIONAL ATHLETES – CLASS CODE 970
1. Employees who qualify for payroll limitation include but is not limited to all players, coaches,
managers or game officials and include all players on salary list of the employer.
2. The entire remuneration of each employee should be included in computing premium, subject
to a maximum of $60,000 per season.
3. Season includes pre-season and post-season exposure.
4. When an employee works for two or more teams in the same sport during the season, the
maximum shall be prorated.
5. The remuneration of an individual employee is subject to a minimum of $500.00 per season or
year, including board and lodging. For more details refer to the Classification and Rating
Values Section.
D. SOLE PROPRIETORS AND PARTNERSHIPS
Sole proprietors and partners are not covered by the Pennsylvania Workers' Compensation Act or the
Pennsylvania Occupational Disease Act.
E. SUBCONTRACTORS
1(a) Law on Contractors and Subcontractors.
Pennsylvania Workers' Compensation Act (Section 302 a & b) provides that a contractor is
responsible for the payment of compensation benefits to employees of its uninsured
subcontractors.
(b) A contractor shall not subcontract all or any part of a contract unless the subcontractor has
presented proof of insurance under this act.
(c)(1) Prior to issuing a building permit to a contractor, a municipality shall require the contractor to
present proof of workers' compensation insurance or an affidavit that the contractor does not
employ other individuals and is not required to carry workers' compensation insurance.
(2) Every building permit issued by a municipality to a contractor shall clearly set forth the name
and workers' compensation policy and the contractor's Federal or State Employer Identification
Number. This information shall be in addition to any information required by municipal
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ordinance. If the building permit is issued to an applicant which affirms it is not obligated to
maintain workers' compensation insurance under this act, the permit shall clearly set forth the
contractor's Federal or State Employer Identification Number and the substance of the
affirmation and that the applicant is not permitted to employ any individual to perform work
pursuant to the building permit.
(3) Every municipality issuing a building permit shall be named as a workers’ compensation policy
certificate holder of a contractor-issued building permit. This certificate shall be filed with the
municipality's copy of the building permit. An insurer issuing a policy which names a
municipality as a workers' compensation policy certificate holder pursuant to this section shall
be required to notify that municipality of the expiration or cancellation of any such policy of
insurance or policy certificate within three working days of such cancellation or expiration.
(4) A municipality shall issue a stop-work order to a contractor who is performing work pursuant to
a building permit, upon receiving actual notice that the contractor's workers' compensation
insurance or State-approved self-insured status has been cancelled. Also, if the municipality
receives actual notice that a permittee, having filed an affidavit of exemption from workers'
compensation insurance, has hired persons to perform work pursuant to a building permit and
does not maintain required workers' compensation insurance, the municipality shall issue a
stop-work order. This order shall remain in effect until proper workers' compensation coverage
is obtained for all work performed pursuant to the building permit.
(d)(1) Where a contractor is performing work for a public body or political subdivision, all contractors
and subcontractors shall provide proof of workers' compensation insurance to the public body
or political subdivision effective for the duration of the work.
(2) The public body or political subdivision shall issue a stop work order to any contractor who is
performing work for that public body or political subdivision upon receiving notice that any
public contractor's workers' compensation insurance, or State-approved self-insurance status,
has expired or has been cancelled. If the public body or political subdivision receives actual
notice that a contractor, having filed an affidavit of exemption from workers' compensation
insurance, has hired persons to perform work for a public body or political subdivision and does
not maintain the required workers' compensation insurance or self-insurance, the public body
or political subdivision shall issue a stop work order, which order shall remain in effect until
proper workers' compensation coverage is obtained for all work performed pursuant to the
contract of work for the public body or political subdivision.
(e) Should such policy of workers' compensation insurance be cancelled or expire during the
duration of the work or should the workers' compensation self-insurance status change during
the said period, the contractor shall immediately notify, in writing, the municipality, public body
or political subdivision of such cancellation, expiration or change in status.
(f) Nothing is this act shall be the basis of any liability on part of the municipality.
(g) For purposes of subsections (b), (c) and (d) of this section, "proof of insurance" shall include a
certificate of insurance or self-insurance, demonstrating current coverage and compliance with
the requirements of this act, the Occupational Disease Act and the Longshore and Harbor
Workers' Compensation Act (44 Stat. 1424, 33 U.S.C. 901 et seq.), its amendments and
supplements, where applicable.
(h) For purposes of subsections (b), (c) and (d) of this section, "proof of insurance" shall not be
required when the employer has been exempted pursuant to section 304.2 of this act.
2. Coverage
If the contractor has specifically assumed this liability, use the Statutory Employer Endorsement (WC
37 03 09) in Section 3 of this Manual. The carrier for the subcontractor should use Exclusion of
Employees Endorsement (WC 37 03 03) in Section 3 of this Manual.
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3. Premium for Uninsured Subcontractors
The contractor shall furnish satisfactory evidence that the subcontractor had workers' compensation
insurance in force covering the work performed for the contractor. For each subcontractor for which
such evidence is not furnished, additional premium shall be charged on the policy which insured the
contractor as follows:
a. The contractor shall provide a complete payroll record of the employees of each uninsured
subcontractor. Premium on such payroll shall be based on the classifications which would have
applied if the employees of the subcontractor had been employees of the contractor.
b. If the contractor does not supply the payroll records of its subcontractor, the full subcontract
price of the work performed during the policy period by the subcontractor shall be established
as the payroll of the subcontractor's employees. The additional premium shall be charged on
that amount as payroll.
Exception to 3b
If investigation on a specific job discloses that a definite amount of the subcontract price
represents payroll, such amount shall be the payroll for the additional premium computation. In
contracts for: (1) mobile equipment with operators (such as but not limited to: earth movers,
graders, bulldozers, or log skidders), the payroll shall not be less than 33% of the subcontract
price, (2) labor and material, the payroll shall not be less than 50% of the subcontract price, (3)
labor only, the payroll shall be established as not less than 90% of the subcontract price.
c. If an experience modification has been established for the contractor, such experience
modification shall be applied to the premium developed for the uninsured subcontractor.
4. Drivers, Chauffeurs and Helpers Under Contract
This rule on subcontractors does not apply to contracts to drivers, chauffeurs or helpers on
vehicles engaged under contract. See Rule IV B. 3a (10).
F. EX-MEDICAL COVERAGE
Ex-medical coverage is prohibited in the state of Pennsylvania.
G. TRUCKERS INTERSTATE
The payroll of a trucker shall be assigned to a state in which it has a terminal or base of
operations. These guidelines are not applicable to dispatching or broker operations.
Example:
A driver/employee resides in State A. His employer/trucker base of operations is in State B. If
the driver/employee regularly travels to the terminal or base of operations in State B to load or
unload freight or perform other regular work functions, i.e. mechanic, the driver/employee
payroll shall be assigned to State B.
When the trucker does not operate from a terminal or base of operation, the state to which the
payroll is assigned shall be determined in accordance with the following procedures.
If it can be established that the trucker does a significant portion of its business in a single
state, the payrolls, other than those payrolls which can be attributed to specific work functions
in a specific state, should be assigned to that state. Factors such as driving time, number of
pickups and deliveries, revenue and tonnage, should be considered in determining the state of
payroll assignment. If a state payroll assignment cannot be made based on these factors, then
the truckers payroll shall be assigned to his state of residence.
For the purposes of the guidelines the following definitions shall apply:
TRUCKER – A trucker is the holder of operating authority from a government agency.
TERMINAL OR BASE OF OPERATIONS – A permanent location owned, leased or used by the
trucker at which loading, unloading and other related non-clerical work functions such as
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maintenance and transfers are performed and from which the driver/employee is assigned to
work from on a regular basis.
STATE OF RESIDENCE – The state in which the trucker resides as evidenced by the location
used for the filing of federal income taxes.
REGULAR – A pattern of 40 hours per week or any other pattern that appears on a continuing
basis.
H. PENNSYLVANIA CONSTRUCTION CLASSIFICATION PREMIUM ADJUSTMENT PROGRAM
1. The Pennsylvania Construction Classification Premium Adjustment Program provides for a
premium credit for up to one year for a policy which contains one or more construction
classifications. A credit may be applicable to those policies effective new and renewed with
normal anniversary rating dates on or after January 1, 1991.
For policies subject both to a Pennsylvania Construction Classification Premium Adjustment
Program credit and any retrospective rating plan the PCCPAP credit shall be applied in
determining standard premium. Such adjusted standard premium shall then be used
wherever standard premium would otherwise apply in determining retrospective rating plan
values and amounts for the retrospective rating plan applicable to the same risk if no
PCCPAP credit were applicable. PCCPAP credits shall not be applied to final retrospective
premium either in lieu of or in addition to the above prescribed procedure.
The basis for determining the credit is the total payroll (including overtime premium pay) and
hours worked for each construction classification as reported to taxing authorities. The
applicable report periods vary according to the normal anniversary rating date of each policy,
as set forth below:
Normal Reporting
Anniversary Period for
Rating Dates Qualifying Wages
October 1, 2005 – September 30, 2006 Third calendar quarter of 2004
October 1, 2006 – September 30, 2007 Third calendar quarter of 2005
October 1, 2007 – September 30, 2008 Third calendar quarter of 2006
October 1, 2008 – September 30, 2009 Third calendar quarter of 2007
October 1, 2009 and later Third calendar quarter of 2008
If the insured did not engage in operations for the complete quarter, then the last complete quarter
prior to policy year inception shall be used or, if there was no complete quarter of operations prior to
the policy inception, then the first complete quarter after policy inception shall be used. A credit may
be determined for each construction classification by dividing the total payroll, including overtime
premium pay, by the number of hours worked to arrive at the average hourly wage for the
classification. In the absence of specific records for salaried employees, it will be assumed each such
individual worked forty (40) hours per week. The credit for average hourly wage is listed below:
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Normal Anniversary Rating Dates – October 1, 2005 – September 30, 2006
Credit From Credit From
Average Standard Average Standard
Hourly Wage Premium Hourly Wage Premium
$21.34 or less None $26.50 - $26.99 18%
$21.35 - $21.69 5% $27.00 - $27.49 19%
$21.70 - $22.04 6% $27.50 - $27.99 20%
$22.05 - $22.39 7% $28.00 - $28.49 21%
$22.40 - $22.74 8% $28.50 - $28.99 22%
$22.75 - $23.14 9% $29.00 - $29.54 23%
$23.15 - $23.54 10% $29.55 -$30.09 24%
$23.55 - $23.94 11% $30.10 - $30.69 25%
$23.95 - $24.34 12% $30.70 - $31.29 26%
$24.35 - $24.74 13% $31.30 - $31.89 27%
$24.75 - $25.14 14% $31.90 - $32.49 28%
$25.15 - $25.59 15% $32.50 - $33.14 29%
$25.60 - $26.04 16% $33.15 and over 30%
$26.05 - $26.49 17%
Normal Anniversary Rating Dates – October 1, 2006 – September 30, 2007
Credit From Credit From
Average Standard Average Standard
Hourly Wage Premium Hourly Wage Premium
$22.19 or less None $27.60 $28.09 18%
$22.20 $22.54 5% $28.10 $28.59 19%
$22.55 $22.89 6% $28.60 $29.09 20%
$22.90 $23.29 7% $29.10 $29.64 21%
$23.30 $23.69 8% $29.65 $30.19 22%
$23.70 $24.09 9% $30.20 $30.74 23%
$24.10 $24.49 10% $30.75 $31.29 24%
$24.50 $24.89 11% $31.30 $31.89 25%
$24.90 $25.29 12% $31.90 $32.49 26%
$25.30 $25.74 13% $32.50 $33.14 27%
$25.75 $26.19 14% $33.15 $33.79 28%
$26.20 $26.64 15% $33.80 $34.44 29%
$26.65 $27.09 16% $34.45 and over 30%
$27.10 $27.59 17%
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Normal Anniversary Rating Dates – October 1, 2007 - September 30, 2008
Credit From Credit From
Average Standard Average Standard
Hourly Wage Premium Hourly Wage Premium
23.24 or less None 28.85 29.34 18%
23.25 23.59 5% 29.35 29.89 19%
23.60 23.99 6% 29.90 30.44 20%
24.00 24.39 7% 30.45 30.99 21%
24.40 24.79 8% 31.00 31.54 22%
24.80 25.19 9% 31.55 32.14 23%
25.20 25.59 10% 32.15 32.74 24%
25.60 26.04 11% 32.75 33.39 25%
26.05 26.49 12% 33.40 34.04 26%
26.50 26.94 13% 34.05 34.69 27%
26.95 27.39 14% 34.70 35.39 28%
27.40 27.84 15% 35.40 36.09 29%
27.85 28.34 16% 36.10 and over 30%
28.35 28.84 17%
Normal Anniversary Rating Dates - October 1, 2008 – September 30, 2009
Credit From Credit From
Average Standard Average Standard
Hourly Wage Premium Hourly Wage Premium
$24.04 or less None $29.90-$30.44 18%
$24.05-$24.39 5% $30.45-$30.99 19%
$24.40-$24.79 6% $31.00-$31.54 20%
$24.80-$25.19 7% $31.55-$32.09 21%
$25.20-$25.59 8% $32.10-$32.69 22%
$25.60-$26.04 9% $32.70-$33.29 23%
$26.05-$26.49 10% $33.30-$33.89 24%
$26.50-$26.94 11% $33.90-$34.54 25%
$26.95-$27.39 12% $34.55-$35.19 26%
$27.40-$27.89 13% $35.20-$35.89 27%
$27.90-$28.39 14% $35.90-$36.59 28%
$28.40-$28.89 15% $36.60-$37.29 29%
$28.90-$29.39 16% $37.30 and over 30%
$29.40-$29.89 17%
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Normal Anniversary Rating Dates – October 1, 2009 and later
Credit From Credit From
Average Standard Average Standard
Hourly Wage Premium Hourly Wage Premium
24.94 or less None 31.00 31.54 18%
24.95 25.34 5% 31.55 32.09 19%
25.35 25.74 6% 32.10 32.69 20%
25.75 26.14 7% 32.70 33.29 21%
26.15 26.59 8% 33.30 33.89 22%
26.60 27.04 9% 33.90 34.54 23%
27.05 27.49 10% 34.55 35.19 24%
27.50 27.94 11% 35.20 35.84 25%
27.95 28.44 12% 35.85 36.54 26%
28.45 28.94 13% 36.55 37.24 27%
28.95 29.44 14% 37.25 37.99 28%
29.45 29.94 15% 38.00 38.74 29%
29.95 30.44 16% 38.75 and over 30%
30.45 30.99 17%
The total construction classification credit amount, in dollars, must be calculated and then divided by
the total policy premium at bureau rating values – including construction and non-construction
classifications. The resulting percentage credit will be the indicated policy credit. When calculating
the indicated policy credit, the percentage shall be rounded to the nearest whole number with .5 being
rounded upward (as an example, 5.4 rounded to 5 and 5.5 rounded to 6).
The indicated policy credit will be applied to the January 1, 2002 or later policy for any insured not
eligible for experience rating. For insureds eligible for experience rating, a policy credit to be applied
to the January 1, 2002 or later policy will be determined as follows:
The insured’s experience modification effective one year prior to the effective date of the
Pennsylvania Construction Classification Premium Adjustment Program (PCCPAP) credit will be
determined in accordance with applicable Manual rules using expected losses reduced by the
indicated policy credit percentage for the policy period to which the PCCPAP credit will apply.
This experience modification will be designated as the PCCPAP numerator.
The insured’s experience modification effective one year prior to the effective date of the
PCCPAP credit will be determined in accordance with applicable Manual rules. This experience
modification will be designated as the PCCPAP denominator.
A credit Adjustment Factor will be computed by dividing the PCCPAP numerator by the PCCPAP
denominator. This credit adjustment factor will be rounded to four decimal places. In the event
that the insured’s experience modification factor effective one year prior to the effective date of
the PCCPAP credit cannot be promulgated at the time the PCCPAP credit is determined, the
credit adjustment factor will be set equal to 1.0000.
A policy credit will be computed according to the following formula:
100 - [100 - indicated policy credit] x credit adjustment factor
The policy credit, rounded to the nearest whole number using the convention described above
with respect to the indicated policy credit, will be applied to the January 1, 2002 or later policy for
insureds eligible for experience rating.
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EXAMPLE:
Hypothetical insured qualified for experience rating –
(1.) Insured’s indicated policy credit: 26
(2.) PCCPAP numerator: (insured’s experience modification for prior
policy period with expected losses reduced by the indicated policy
credit)
1.026
(3.) PCCPAP denominator: (insured’s experience modification for prior
policy period)
0.957
(4.) Credit adjustment factor:
((2) / (3)) rounded to 4 decimals
1.0721
(5.) Policy credit factor:
100 - [100 - 26] x 1.0721 rounded to two decimals
21
The insured shall submit the required payroll and hours worked information to the Pennsylvania
Compensation Rating Bureau for calculation of any applicable credit. The carrier shall, upon audit,
verify the information that was submitted by the insured and used in the calculation of the credit. If the
carrier discovers an error in the original request for policy credit, the revised information must be
submitted to the Pennsylvania Compensation Rating Bureau for recalculation. If the insured does not
furnish records to verify the payrolls and hours worked originally submitted and used in the calculation
of the credit, there shall be no credit applied to the policy.
The credit authorized by the Pennsylvania Compensation Rating Bureau shall appear on Item 4 of the
policy. If the credit applicable to the policy is not available at the time of policy issuance, the carrier
shall endorse the policy to provide the appropriate credit information once a qualifying application has
been processed and the Bureau has notified the carrier of the credit determined on the basis of such
application.
Report Pennsylvania Construction Class Premium Credit on the information page and unit statistical
report under Code 9046.
Carriers are required to use the approved form to notify all their insureds, who have one or more
construction classifications on their policy, that they may be eligible for a premium adjustment credit.
"Construction classifications" are those classifications subject to the following code numbers:
601 609 648 656 663 670 679
602 611 649 657 664 673 681
603 615 651 658 665 674 682
605 617 652 659 666 675 691
606 645 653 660 667 676 693
607 646 654 661 668 677 695
608 647 655 662 669
2. Appeals
The Bureau's determination of an individual risk's eligibility for or the percentage of credit under the
Pennsylvania Construction Classification Premium Adjustment Program may be appealed pursuant to
RULE XVI, APPEALS FROM APPLICATION OF THE RATING SYSTEM PROCEDURE, Section 1 of
this Manual.
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BUREAU FILE NO.: ________________________
PENNSYLVANIA WORKERS COMPENSATION – PREMIUM CREDIT APPLICATION
NAME ON INSURANCE POLICY _________________________________________________________________________
INSURANCE COMPANY (Not Agent) ______________________________________________________________________
POLICY NO. ________________________________ EFF. DATE _______________________________________
Notice: Unless Code(s), total wages paid as reported to taxing authorities, total hours worked, and calendar
quarter reported are indicated and application is signed, it cannot be processed. Non-construction
class code payrolls must be included. Corporate Officers should be included in the appropriate
classification subject to payroll limitation rules. Do not include corporate officers who have elected
to be excluded from the Workers Compensation Act. Contact your agent and/or insurance company
if assistance is desired.
Are you currently engaged in a Long Term Construction Project (i.e. Wrap-up)? YES
TOTAL
HOURS
PENNSYLVANIA TOTAL WORKED
WC PENNSYLVANIA THIS QUARTER
CLASS WAGES PAID (Including
CLASSIFICATION DESCRIPTION CODE THIS QUARTER O.T.)
Example: Carpentry 652 $8,000 460
Example: Office 953 $3,000 520
The foregoing is based on actual wages and hours worked, as reflected in our payroll records, for the complete calendar
quarter ending _________________________.
Signature ________________________________________ Title ________________________________________
Telephone Number ________________________________ Date ________________________________________
Address ________________________________ City __________________ State _________ Zip Code ______
SEND APPLICATION TO: EXPERIENCE RATING DEPARTMENT
PENNSYLVANIA COMPENSATION RATING BUREAU
UNITED PLAZA BUILDING, SUITE 1500
30 SOUTH 17th STREET
PHILADELPHIA, PA 19103-4007
No application will be processed by the Bureau unless such application is filed within 12 months
after the termination of the policy period to which it would apply.
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I. CERTIFIED SAFETY COMMITTEE CREDIT PROGRAM
1. Act 44 of 1993 mandates that the Department of Labor and Industry develop certification
criteria for the operation of safety committees. (For certification criteria contact Pennsylvania
Department of Labor and Industry.)
2. A 5% rate credit shall apply to the policy period beginning with the next normal anniversary
rating date established by the Pennsylvania Compensation Rating Bureau and shall not apply
to the policy period in effect when the certification is issued.
3. The 5% rate credit shall continue if the employer annually submits certification renewal
affidavits acceptable to the Department of Labor and Industry.
4. Use Endorsement WC 37 04 04B Certified Safety Committee Endorsement – Pennsylvania to
show credit on appropriate policy.
RULE X – CANCELLATION
A. WHO MAY CANCEL
1. The Cancellation Condition of the Standard Policy permits cancellation by the insured or by the
insurance carrier.
2. Pennsylvania enacted legislation that prohibits an insurance carrier from cancelling workers'
compensation policies during their term, except for nonpayment of premium and/or failure to
reimburse the deductible amount.
Reinstatement
When a notice of cancellation for non-payment has been issued, if the insurer thereafter receives
payment and voluntarily determines to reinstate the policy, such reinstatement of coverage must be
retroactive to the cancellation date.
Alternatively, if the insurer does not want to reinstate the policy as of the cancellation date but
voluntarily determines to resume coverage after a lapse in coverage, the insurer must issue a new
policy. Such new policy must carry the carrier rating values effective on the anniversary rating date
of the cancelled policy.
IMPORTANT NOTICE: CANCELLATION NOTICES MUST BE FILED WITH THE BUREAU
WITHIN 10 DAYS OF ISSUANCE; PROVIDED, HOWEVER, THAT FAILURE TO FILE SUCH
NOTICE WITHIN THE REQUIRED TIME SHALL NOT INVALIDATE ANY CANCELLATION
WHICH HAS BEEN MADE IN ACCORDANCE WITH THE PROVISIONS OF THE POLICY.
B. PREMIUM DETERMINATION – CANCELLATION BY THE INSURANCE CARRIER
Premium for the canceled policy shall be computed as follows:
1. Carrier Rating Values and Payroll
Apply carrier rating values to the payroll developed during the period the policy was in effect.
2. Experience Rating
Apply any experience rating modification in accordance with the rules of the Experience Rating
Plan Section. Refer to Rule VI-E.
C. PREMIUM DETERMINATION – CANCELLATION BY THE INSURED, WHEN RETIRING FROM
BUSINESS
Compute the premium as provided in B above if a policy is cancelled by the insured when:
1. All the work covered by the policy has been completed, or
2. All interest in any business covered by the policy has been sold, or
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3. The insured has retired from all business covered by the policy.
D. PREMIUM DETERMINATION—CANCELLATION BY THE INSURED, EXCEPT WHEN RETIRING
FROM BUSINESS
The premium for the canceled policy shall be based on the Short Rate Cancellation Table in this rule
and computed as follows:
1. Actual Payroll
Determine the payroll developed during the period the policy was in effect.
2. Extended Payroll and Number of Days
a. Extended Payroll
Extend such payroll pro-rata based on the number of days for which the policy was written divided by
the number of days the policy remained in force to produce the full policy payroll.
Example
A policy written for 250 days that remained in effect for 185 days produced a payroll of
$55,500. Payroll extended for the original policy term — $55,500 x 250/185 = $75,000.
b. Extended Number of Days
The extended number of days shall be determined by dividing the number of days the policy was in
force by the number of days for which the policy was written and multiplying the quotient by 365 days.
(When the policy was written for a one year period, the extended number of days will equal the
number of days the policy remained in force.
3. Carrier Rate
Apply carrier rate to the payroll in 2a. above.
4. Experience Rating
Apply any experience rating modification in accordance with the rules of the Experience Rating Plan
Section. Refer to Rule VI-H.
5. Short Rate Percentage
Based on the extended number of days calculated in 2.b., apply the short rate percentage shown in
the Short Rate Cancellation Table in this rule to the premium computed on the basis of the extended
payroll in order to determine the short rate portion of the premium.
6. Example of a Short Rate Cancellation
A policy originally written for 250 days in effect for 185 days develops actual payroll of $55,500,
carrier rate of $.50.
a. Payroll extended to full policy term =
$55,500 x 250 = $75,000
185
b. Full policy term premium = $75,000 x $.50 = $375
c. Extended number of days =
185 x 365 = 270
250
d. Short rate percentage for 270 days = 80%
e. Short rate premium = $375 x .80 = $300
f. Total premium for canceled policy = $300
PENNSYLVANIA WORKERS COMPENSATION MANUAL
SECTION 1 UNDERWRITING RULES
EFFECTIVE DATE: DECEMBER 1, 2009
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© 2009 PENNSYLVANIA COMPENSATION RATING BUREAU
E. SHORT RATE CANCELLATION TABLE FOR TERM OF ONE YEAR
Days
Policy
In Force
Percent
of
One Year
Premium
Days
Policy
In Force
Percent of
One Year
Premium
1 5% 154 - 156 53
2 6 157 - 160 54
3 - 4 7 161 - 164 55
5 - 6 8 165 - 167 56
7 - 8 9 168 - 171 57
9 - 10 10 172 - 175 58
11 - 12 11 176 - 178 59
13 - 14 12 179 - 182 (6 mos) 60
15 - 16 13 183 - 187 61
17 - 18 14 188 - 191 62
19 - 20 15 192 - 196 63
21 - 22 16 197 - 200 64
23 - 25 17 201 - 205 65
26 - 29 18 206 - 209 66
30 - 32 (1 mo) 19 210 - 214 (7 mos) 67
33 - 36 20 215 - 218 68
37 - 40 21 219 - 223 69
41 - 43 22 224 - 228 70
44 - 47 23 229 - 232 71
48 - 51 24 233 - 237 72
52 - 54 25 238 - 241 73
55 - 58 26 242 - 246 (8 mos) 74
59 - 62 (2 mos) 27 247 - 250 75
63 - 65 28 251 - 255 76
66 - 69 29 256 - 260 77
70 - 73 30 261 - 264 78
74 - 76 31 265 - 269 79
77 - 80 32 270 - 273 (9 mos) 80
81 - 83 33 274 - 278 81
84 - 87 34 279 - 282 82
88 - 91 (3 mos) 35 283 - 287 83
92 - 94 36 288 - 291 84
95 - 98 37 292 - 296 85
99 - 102 38 297 - 301 86
103 - 105 39 302 - 305 (10 mos) 87
106 - 109 40 306 - 310 88
110 - 113 41 311 - 314 89
114 - 116 42 315 - 319 90
117 - 120 43 320 - 323 91
121 - 124 (4 mos) 44 324 - 328 92
125 - 127 45 329 - 332 93
128 - 131 46 333 - 337 (11 mos) 94
132 - 135 47 338 - 342 95
136 - 138 48 343 - 346 96
139 - 142 49 347 - 351 97
143 - 146 50 352 - 355 98
147 - 149 51 356 - 360 99
150 - 153 (5 mos) 52 361 - 365 (12 mos) 100
PENNSYLVANIA WORKERS COMPENSATION MANUAL
SECTION 1 UNDERWRITING RULES
EFFECTIVE DATE: DECEMBER 1, 2009
Page 52
© 2009 PENNSYLVANIA COMPENSATION RATING BUREAU
Short Rate Cancellation Table
Days In
Policy
Short Rate
Percentages
Factor to Apply
to Earned Premium
for Period Policy
In Effect
Days In
Policy Period
Short Rate
Percentages
Factor to Apply
to Earned Premium
for Period Policy
in Effect
1 .05 18.2482 46 .23 1.8250
2 .06 10.9489 47 .23 1.7861
3 .07 8.5158 48 .24 1.8250
4 .07 6.3869 49 .24 1.7877
5 .08 5.8394 50 .24 1.7520
6 .08 4.8662 51 .24 1.7176
7 .09 4.6924 52 .25 1.7548
8 .09 4.1058 53 .25 1.7216
9 .10 4.0552 54 .25 1.6899
10 .10 3.6496 55 .26 1.7255
11 .11 3.6496 56 .26 1.6947
12 .11 3.3455 57 .26 1.6650
13 .12 3.3689 58 .26 1.6362
14 .12 3.1283 59 .27 1.6704
15 .13 3.1630 60 .27 1.6425
16 .13 2.9653 61 .27 1.6156
17 .14 3.0056 62 .27 1.5895
18 .14 2.8386 63 .28 1.6222
19 .15 2.8818 64 .28 1.5969
20 .15 2.7377 65 .28 1.5723
21 .16 2.7812 66 .29 1.6038
22 .16 2.6547 67 .29 1.5799
23 .17 2.6980 68 .29 1.5566
24 .17 2.5856 69 .29 1.5341
25 .17 2.4821 70 .30 1.5643
26 .18 2.5270 71 .30 1.5423
27 .18 2.4334 72 .30 1.5208
28 .18 2.3465 73 .30 1.5000
29 .18 2.2656 74 .31 1.5291
30 .19 2.3117 75 .31 1.5087
31 .19 2.2371 76 .31 1.4888
32 .19 2.1672 77 .32 1.5169
33 .20 2.2121 78 .32 1.4974
34 .20 2.1471 79 .32 1.4785
35 .20 2.0857 80 .32 1.4600
36 .20 2.0278 81 .33 1.4870
37 .21 2.0716 82 .33 1.4689
38 .21 2.0171 83 .33 1.4512
39 .21 1.9654 84 .34 1.4774
40 .21 1.9162 85 .34 1.4600
41 .22 1.9585 86 .34 1.4430
42 .22 1.9119 87 .34 1.4264
43 .22 1.8674 88 .35 1.4517
44 .23 1.9079 89 .35 1.4354
45 .23 1.8655 90 .35 1.4194
PENNSYLVANIA WORKERS COMPENSATION MANUAL
SECTION 1 UNDERWRITING RULES
EFFECTIVE DATE: DECEMBER 1, 2009
Page 53
© 2009 PENNSYLVANIA COMPENSATION RATING BUREAU
Short Rate Cancellation Table (Continued)
Days in
Policy Period
Short Rate
Percentages
Factors to Apply
to Earned Premium
for Period Policy
in Effect
Days in
Policy Period
Short Rate
Percentages
Factors to Apply
to Earned Premium
for Period Policy
in Effect
91 .35 1.4038 136 .48 1.2882
92 .36 1.4283 137 .48 1.2788
93 .36 1.4129 138 .48 1.2696
94 .36 1.3979 139 .49 1.2867
95 .37 1.4216 140 .49 1.2775
96 .37 1.4068 141 .49 1.2684
97 .37 1.3923 142 .49 1.2595
98 .37 1.3781 143 .50 1.2762
99 .38 1.4010 144 .50 1.2674
100 .38 1.3870 145 .50 1.2586
101 .38 1.3733 146 .50 1.2500
102 .38 1.3598 147 .51 1.2663
103 .39 1.3820 148 .51 1.2578
104 .39 1.3688 149 .51 1.2493
105 .39 1.3557 150 .52 1.2653
106 .40 1.3774 151 .52 1.2569
107 .40 1.3645 152 .52 1.2487
108 .40 1.3519 153 .52 1.2405
109 .40 1.3395 154 .53 1.2562
110 .41 1.3605 155 .53 1.2481
111 .41 1.3452 156 .53 1.2401
112 .41 1.3362 157 .54 1.2554
113 .41 1.3243 158 .54 1.2475
114 .42 1.3447 159 .54 1.2396
115 .42 1.3330 160 .54 1.2319
116 .42 1.3215 161 .55 1.2469
117 .43 1.3414 162 .55 1.2392
118 .43 1.3301 163 .55 1.2316
119 .43 1.3189 164 .55 1.2241
120 .43 1.3079 165 .56 1.2388
121 .44 1.3273 166 .56 1.2313
122 .44 1.3164 167 .56 1.2240
123 .44 1.3057 168 .57 1.2384
124 .44 1.2951 169 .57 1.2311
125 .45 1.3140 170 .57 1.2238
126 .45 1.3036 171 .57 1.2167
127 .45 1.2933 172 .58 1.2308
128 .46 1.3117 173 .58 1.2237
129 .46 1.3016 174 .58 1.2167
130 .46 1.2916 175 .58 1.2097
131 .46 1.2817 176 .59 1.2236
132 .47 1.2996 177 .59 1.2167
133 .47 1.2899 178 .59 1.2098
134 .47 1.2802 179 .60 1.2235
135 .47 1.2708 180 .60 1.2167
PENNSYLVANIA WORKERS COMPENSATION MANUAL
SECTION 1 UNDERWRITING RULES
EFFECTIVE DATE: DECEMBER 1, 2009
Page 54
© 2009 PENNSYLVANIA COMPENSATION RATING BUREAU
Short Rate Cancellation Table(Continued)
Days in
Policy Period
Short Rate
Percentages
Factor to Apply
to Earned Premium
for Period Policy
in Effect
Days in
Policy Period
Short Rate
Percentages
Factor to Apply
to Earned Premium
for Period Policy
in Effect
181 .60 1.2099 226 .70 1.1305
182 .60 1.2033 227 .70 1.1255
183 .61 1.2167 228 .70 1.1206
184 .61 1.2101 229 .71 1.1317
185 .61 1.2035 230 .71 1.1267
186 .61 1.1970 231 .71 1.1219
187 .61 1.1906 232 .71 1.1170
188 .62 1.2037 233 .72 1.1279
189 .62 1.1974 234 .72 1.1231
190 .62 1.1910 235 .72 1.1183
191 .62 1.1848 236 .72 1.1136
192 .63 1.1977 237 .72 1.1089
193 .63 1.1914 238 .73 1.1195
194 .63 1.1853 239 .73 1.1149
195 .63 1.1792 240 .73 1.1102
196 .63 1.1732 241 .73 1.1056
197 .64 1.1858 242 .74 1.1161
198 .64 1.1798 243 .74 1.1115
199 .64 1.1739 244 .74 1.1070
200 .64 1.1680 245 .74 1.1025
201 .65 1.1804 246 .74 1.0980
202 .65 1.1745 247 .75 1.1083
203 .65 1.1687 248 .75 1.1038
204 .65 1.1630 249 .75 1.0994
205 .65 1.1573 250 .75 1.0950
206 .66 1.1694 251 .76 1.1052
207 .66 1.1638 252 .76 1.1008
208 .66 1.1582 253 .76 1.0964
209 .66 1.1526 254 .76 1.0921
210 .67 1.1645 255 .76 1.0878
211 .67 1.1590 256 .77 1.0979
212 .67 1.1535 257 .77 1.0936
213 .67 1.1481 258 .77 1.0893
214 .67 1.1428 259 .77 1.0851
215 .68 1.1544 260 .77 1.0810
216 .68 1.1491 261 .78 1.0908
217 .68 1.1438 262 .78 1.0866
218 .68 1.1385 263 .78 1.0825
219 .69 1.1500 264 .78 1.0784
220 .69 1.1448 265 .79 1.0881
221 .69 1.1396 266 .79 1.0840
222 .69 1.1345 267 .79 1.0800
223 .69 1.1294 268 .79 1.0759
224 .70 1.1406 269 .79 1.0719
225 .70 1.1356 270 .80 1.0815
PENNSYLVANIA WORKERS COMPENSATION MANUAL
SECTION 1 UNDERWRITING RULES
EFFECTIVE DATE: DECEMBER 1, 2009
Page 55
© 2009 PENNSYLVANIA COMPENSATION RATING BUREAU
Short Rate Cancellation Table (Continued)
Days in
Policy Period
Short Rate
Percentages
Factor to Apply
to Earned Premium
for Period Policy
in Effect
Days in
Policy Period
Short Rate
Percentages
Factor to Apply
to Earned Premium
for Period Policy
in Effect
271 .80 1.0775 316 .90 1.0396
272 .80 1.0735 317 .90 1.0363
273 .80 1.0696 318 .90 1.0330
274 .81 1.0790 319 .90 1.0298
275 .81 1.0751 320 .91 1.0380
276 .81 1.0712 321 .91 1.0347
277 .81 1.0673 322 .91 1.0315
278 .81 1.0635 323 .91 1.0283
279 .82 1.0728 324 .92 1.0364
280 .82 1.0689 325 .92 1.0332
281 .82 1.0651 326 .92 1.0301
282 .82 1.0614 327 .92 1.0269
283 .83 1.0705 328 .92 1.0238
284 .83 1.0667 329 .93 1.0318
285 .83 1.0630 330 .93 1.0286
286 .83 1.0593 331 .93 1.0255
287 .83 1.0556 332 .93 1.0224
288 .84 1.0646 333 .94 1.0303
289 .84 1.0609 334 .94 1.0272
290 .84 1.0572 335 .94 1.0242
291 .84 1.0536 336 .94 1.0211
292 .85 1.0625 337 .94 1.0181
293 .85 1.0589 338 .95 1.0259
294 .85 1.0553 339 .95 1.0229
295 .85 1.0517 340 .95 1.0198
296 .85 1.0481 341 .95 1.0169
297 .86 1.0569 342 .95 1.0139
298 .86 1.0534 343 .96 1.0216
299 .86 1.0498 344 .96 1.0186
300 .86 1.0463 345 .96 1.0156
301 .86 1.0429 346 .96 1.0127
302 .87 1.0515 347 .97 1.0203
303 .87 1.0480 348 .97 1.0174
304 .87 1.0446 349 .97 1.0145
305 .87 1.0411 350 .97 1.0116
306 .88 1.0497 351 .97 1.0087
307 .88 1.0462 352 .98 1.0162
308 .88 1.0429 353 .98 1.0133
309 .88 1.0395 354 .98 1.0105
310 .88 1.0361 355 .98 1.0076
311 .89 1.0445 356 .99 1.0150
312 .89 1.0412 357 .99 1.0122
313 .89 1.0379 358 .99 1.0094
314 .89 1.0346 359 .99 1.0065
315 .90 1.0429 360 .99 1.0038
361 1.00 1.0111
362 1.00 1.0083
363 1.00 1.0055
364 1.00 1.0027
365 1.00 1.0000
PENNSYLVANIA WORKERS COMPENSATION MANUAL
SECTION 1 UNDERWRITING RULES
EFFECTIVE DATE: DECEMBER 1, 2009
Page 56
© 2009 PENNSYLVANIA COMPENSATION RATING BUREAU
RULE XI – THREE-YEAR FIXED RATE POLICY OPTION
1. A carrier may file a "Three-Year Fixed Rate Option" program with the Pennsylvania Insurance
Department.
2. A policy may be issued for a period of three years at a fixed carrier rate, provided the risk is not
eligible for the Experience Rating Plan on the effective date of the policy.
3. A policy issued under an approved program shall be designated on the Information Page as
follows - "THREE-YEAR FIXED RATE."
RULE XII – U.S. LONGSHORE AND HARBOR WORKERS' COMPENSATION ACT
A. GENERAL EXPLANATION
The U.S. Longshore and Harbor Workers' Compensation Act (U.S.L. & H.W. Act) is a Federal law
which provides for payment of compensation and other benefits to employees such as longshoremen,
harbor workers, ship repairmen, shipbuilders, ship-breakers and other employees engaged in loading,
unloading, repairing or building a vessel. It applies to such employees while working on navigable
waters of the United States and also while working on any adjoining pier, wharf, dry dock, terminal,
building way, marine railway, or other area adjoining such navigable waters customarily used for
loading, unloading, repairing or building a vessel. It does not cover masters or members of the crew of
a vessel. For complete details see U.S. Code (1946), Title 33, Section 901-49, amended by Public
Law 92-576.
B. WORKERS COMPENSATION INSURANCE – PART ONE
The standard policy is used to insure the statutory obligation of an employer to furnish benefits
required by the U.S.L. & H.W. Act. Attach the Standard Longshore and Harbor Workers'
Compensation Act Coverage Endorsement (WC 00 01 06A) to provide such insurance. Do not
designate the U.S.L. & H.W. Act in Item 3-A of the Information Page.
C. EMPLOYERS LIABILITY INSURANCE – PART TWO
For operations subject to the U.S.L. & H.W. Act, the standard limits of liability under Part Two are:
Bodily Injury by Accident: $100,000 – each accident
Bodily Injury by Disease: $100,000 – each employee
Bodily Injury by Disease: $500,000 – policy limit, Refer to Rule VIII.
D. CLASSIFICATIONS AND RATES
1. Classifications
Classifications for insurance under the U.S.L. & H.W. Act are listed in "Section 2
Classifications" of this Manual.
2. Rates for Federal "F" Classifications
The manual rates for classification code numbers followed by the letter "F" include premium for
operations subject to the U.S.L. & H.W. Act.
3. Bureau Rating Values for Non-Federal "Non-F" Classifications
The manual bureau rating values for classification code numbers not followed by the letter "F"
do not include premium for operations subject to the U.S.L. & H.W. Act. If operations under
such classifications involve some employees subject to U.S.L. & H.W. Act, the manual rates
and minimum premiums for such classifications shall be increased by the U.S. Longshore and
Harbor Workers' Compensation Coverage Percentage. Such increased rate shall apply only to
payroll of employees engaged in operations subject to the U.S.L. & H.W. Act.
PENNSYLVANIA WORKERS COMPENSATION MANUAL
SECTION 1 UNDERWRITING RULES
EFFECTIVE DATE: DECEMBER 1, 2009
Page 57
© 2009 PENNSYLVANIA COMPENSATION RATING BUREAU
E. EXTENSIONS OF THE U.S.L. & H.W. ACT
1. Defense Base Act
The Defense Base Act extends the provisions of the U.S.L. & H.W. Act to employers and their
employees on overseas military bases and on other overseas locations under public works
contracts being performed by contractors with agencies of the United States Government.
Employees who are not United States citizens may be exempted from coverage upon approval
of a waiver by the Secretary of Labor. For complete details, see Defense Bases Act, U.S. Code
(1946) Title 42 Sections 1651-54, Public Law 208, 77th Congress.
To provide such insurance, attach the Standard Defense Base Act Coverage Endorsement
(WC 00 01 01A).
2. Civilian Employees of Nonappropriated Fund Instrumentalities Act
The Nonappropriated Fund Instrumentalities Act extends the provisions of the U.S.L. & H.W.
Act to civilian employees of nonappropriated fund instrumentalities such as post exchanges
and service clubs of the Armed Forces. For complete details, see U.S. Code (1970) Title 5,
Section 8171 (Public Law 85-538, 85th Congress).
To provide such insurance attach the Standard Nonappropriated Fund Instrumentalities Act
Coverage Endorsement (WC 00 01 08A).
3. Premium Determination
For insurance under extensions of the U.S.L. & H.W. Act, determine premium as provided in
Rule XII - D.
4. Outer Continental Shelf Lands Act
To provide such insurance, attach the Outer Continental Shelf Lands Act Coverage
Endorsement (WC 00 01 09A).
F. PENNSYLVANIA WORKERS COMPENSATION VOLUNTARY POOL
Contact Pennsylvania Compensation Rating Bureau for information concerning U.S.L. & H.W.
coverage.
RULE XIII – THE ADMIRALTY LAW AND THE FEDERAL EMPLOYERS' LIABILITY ACT
NOTE: The Pennsylvania Compensation Rating Bureau has no jurisdiction over the bureau rating values or
classification for Admiralty or Federal Employers Liability exposure. The following rule was published by the
National Council on Compensation Insurance and is shown here for information purposes only.
A. GENERAL EXPLANATION
1. Admiralty Law
Masters and members of the crews of vessels are not covered under state workers
compensation laws nor under the U.S.L. & H.W. Act. They are subject to admiralty law and, if
injured, have the right to sue their employers for damages in the Admiralty Courts where the
proceeding is in the nature of an employers' liability suit. They also have the right to
transportation, wages, maintenance and cure. Such seamen are subject to a Federal law, the
Merchant Marine Act of 1920, known as the Jones Act (46 U.S. Code, Section 688, 1970)
which applies the provisions of the Federal Employers Liability Act to seamen. Every person
employed on board a vessel is deemed to be a seaman if connected with the operation or
welfare of the vessel while in navigable waters. Usually, navigable waters are defined as those
which form a continuous highway for interstate or international commerce.
PENNSYLVANIA WORKERS COMPENSATION MANUAL
SECTION 1 UNDERWRITING RULES
EFFECTIVE DATE: DECEMBER 1, 2009
Page 58
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2. Federal Employers Liability Act (F.E.L.A.)
The Federal Employers Liability Act applies to employees of interstate railroads. Such
employees are not subject to state workers compensation laws. This federal law imposes
liability for damages on the railroad if the injured railroad employee can show any negligence
on the part of the railroad. For complete details, see 45 U.S. Code, Sections 51-60, 1970.
B. DESCRIPTION OF COVERAGE PROGRAMS
The Standard Policy may be used to provide insurance for liability under one or more state workers
compensation laws and also for liability under admiralty law or F.E.L.A. There are two programs to
furnish such insurance:
1. Program I
Provides under Part One - Workers Compensation Insurance statutory liability - under the
workers compensation law of any state designated in the Information Page and under Part Two
- Employers Liability Insurance, Employers liability - for damages under admiralty law or
F.E.L.A., subject to a standard limit of liability of $25,000.
2. Program II
Provides the same coverage as Program I, but with the addition of Voluntary Compensation.
Under Program II, the insurance carrier will offer a settlement of a claim strictly in accord with
the statutory benefits provided in the workers' compensation law designated in the Voluntary
Compensation Endorsement attached to the policy as if the claim were subject to such law,
instead of subject to the laws of negligence. If the offer of settlement is rejected, Employers
liability then applies to such claim or suit, with the same standard limit as for Program I.
C. COVERAGE
1. Admiralty Law Endorsements
To provide Program I for admiralty law, attach the Standard Maritime Coverage Endorsement
(WC 00 02 01A). To provide Program II for admiralty law, also attach the Standard Voluntary,
Maritime Coverage Endorsement (WC 00 02 03).
2. Admiralty Law Coverage Options
a. The Maritime Coverage Endorsement (WC 00 02 01A) excludes liability to provide
transportation, wages, maintenance and cure. This endorsement may optionally include a
provision to insure such liability for an additional premium based on an (a) rate.
3. F.E.L.A. Endorsements
To provide Program I for employments subject to F.E.L.A., attach the Standard Federal
Employers Liability Act Coverage Endorsement (WC 00 01 04). To provide Program II, also
attach the Standard Voluntary Compensation and Employers Liability Coverage Endorsement
(WC 00 03 11A).
4. U.S.L. & H.W. Act
When insurance is provided for liability under admiralty law or F.E.L.A., insurance for liability
under the U.S.L. & H.W. Act also may be necessary. To provide such insurance, attach the
Standard Longshore and Harbor Workers' Compensation Act Coverage Endorsement (WC 00
01 06A).
D. LIMITS OF LIABILITY
1. Standard Limit
The standard limit of liability under Part Two - Employers Liability Insurance for admiralty or
F.E.L.A. insurance under Program I or II is $25,000.
PENNSYLVANIA WORKERS COMPENSATION MANUAL
SECTION 1 UNDERWRITING RULES
EFFECTIVE DATE: DECEMBER 1, 2009
Page 59
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a. Accident Limit
The limit of liability applies to all bodily injury arising out of any one accident.
b. Disease Limit
The limit of liability also applies as a separate aggregate limit for all bodily injury by disease. The
aggregate limit applies separately to bodily injury by disease arising out of work in each state
shown in Item 3-A of the Information Page.
c. Show Limits on Endorsement
These limits of liability must be stated in the Maritime Coverage Endorsement and/or the
Federal Employers Liability Act Coverage Endorsement (WC 00 01 04).
2. Increased Limits
Increased limits for liability under Part Two - Employers Liability Insurance are available. The
additional premium for increased limits shall be determined by applying the factor in the
following Table for Increased Limits to the total premium for admiralty or F.E.L.A. classifications
before application of:
a. Expense Constant
b. Experience rating modification
c. Premium discount or retrospective rating adjustment.
The premium for increased limits is subject to an experience rating modification.
TABLE FOR INCREASED LIMITS
Limit Per Minimum Premium
Accident Factor Program I Program II
$ 25,000 1.00 $100 $200
50,000 1.09 109 218
100,000 1.15 115 230
200,000 1.23 123 246
300,000 1.29 129 258
400,000 1.34 134 268
500,000 1.38 138 276
3. Minimum Premium
The separate minimum premium shown in the above Table For Increased Limits applies to a
policy which includes classifications for operations subject to admiralty law or the F.E.L.A. Such
minimum premium is the lowest premium for insuring admiralty or F.E.L.A. operations and it
shall apply in addition to the minimum premium or premium for other operations on such a
policy. It is not subject to an experience rating modification.
PENNSYLVANIA WORKERS COMPENSATION MANUAL
SECTION 1 UNDERWRITING RULES
EFFECTIVE DATE: DECEMBER 1, 2009
Page 60
© 2009 PENNSYLVANIA COMPENSATION RATING BUREAU
E. CLASSIFICATIONS
NOTE: The Pennsylvania Compensation Rating Bureau has no jurisdiction over the bureau
rating values or classification for Admiralty or Federal Employers Liability Exposure. The
following admiralty or F.E.L.A. classification list is for information purposes only.
Classifications Code Number
Program
I Program II
State Act
Benefits USL Act
Benefits
Boat Livery - boats under 15 tons. This classification includes the
laying up or putting into commission of boats. Boats 15 tons or
over to be separately rated under the appropriate vessels
classification.
7038
7090
7050
Diving - marine 7394 7395 7398
Dredging - all types 7333 7335 7337
Ferries - This classification includes dock employees. 7019 7027 7062
Fishing Vessels - NOC. This classification includes packing, curing
or shipping fish and repair of nets or boats. 7039 7091 7051
Oyster Boats - This classification includes planting; harvesting; and
operation of boats. 7079 7097 7070
Salvage Operations - marine. 7394 7395 7398
Supply Boats 7020 7028 7131
Tugboats 7020 7028 7131
Vessels - NOC 7016 7024 7047
Vessels - not self-propelled. Such vessels having a regular master
and crew who are furnished living quarters aboard the vessel, shall
be rated as "Vessels, NOC."
7046 7098 7099
Classifications Code Number
Program I Program II
State Act
Benefits USL Act Benefits
Vessels - sail
7036
7088
7048
Wrecking - marine.
This classification includes salvage operations. 7394 7395 7398
Yachts - private - sail or power 7037 7089 7049
Federal Employers Liability Act
Railroad Operation - all employees including drivers. This
classification contemplates the normal operations of railroads
including nor-mal maintenance and repair. All extraordinary
repair work including such work as rebuilding bridges, grade
crossing elimination, laying or relaying track and all new
construction operations shall be classified as Code 6702 or 6703.
7151 7153 7152
Clerical Office Employees - NOC 8814 8805 8815
Salespersons, Collectors or Messengers - outside 8737 8734 8738
Railroad Construction - all operations including clerical, salesper-
sons and drivers 6702 6704 6703
PENNSYLVANIA WORKERS COMPENSATION MANUAL
SECTION 1 UNDERWRITING RULES
EFFECTIVE DATE: DECEMBER 1, 2009
Page 61
© 2009 PENNSYLVANIA COMPENSATION RATING BUREAU
F. WATERS NOT UNDER ADMIRALTY JURISDICTION
1. Coverage
An insured may conduct operations on waters not subject to admiralty jurisdiction. Insurance
for such operations shall be provided by the Standard Policy and endorsement forms and is
subject to the rules which apply to statutory workers' compensation insurance.
2. Admiralty Law or U.S.L. & H.W. Act Liability
If there is a potential liability under admiralty law, follow the previous rules for insurance under
admiralty law. If there is a potential liability under the U.S.L & H.W. Act, refer to Rule XII.
RULE XIV – DOMESTIC WORKERS - RESIDENCES
A. DEFINITIONS
1. Inside Domestic Workers
Domestic Workers—Inside are employees engaged exclusively in household or domestic work
performed principally inside the residence. Examples include a cook, housekeeper, laundry worker,
maid, butler, companion, nurse and baby sitter.
2. Outside Domestic Workers
Domestic Workers—Outside are employees engaged exclusively in household or domestic work
performed principally outside the residence. Examples include a private chauffeur and a gardener.
3. Occasional Domestic Workers
Domestic Workers—Occasional are domestic workers inside or outside, who are employed part-time.
Any domestic worker employed more than 1/2 of the customary full time shall be assigned and rated
as a full time domestic worker. Examples of occasional domestic workers are persons engaged on
certain days for gardening, cleaning, laundering or baby sitting.
B. COVERAGE
1. Workers Compensation and Employers Liability Insurance
An employer of domestic workers may elect to come within the workers compensation law by applying
to the Bureau of Workers Compensation. The statutory obligation of the employer may be insured by
the standard policy.
2. Voluntary Compensation Insurance
If the employer of domestic workers does not elect coverage under the law, voluntary compensation
insurance for the domestic workers may be provided by attaching the standard Voluntary
Compensation Endorsement to the Standard Policy.
C. NAME OF INSURED
The resident owner, the estate of the owner or a family member(s) of the same residence may be
named as the insured, but only with respect to the employment of domestic workers in connection
with a given residence.
D. CLASSIFICATIONS
1. Please refer to the Section 2 Domestic Workers class listing for the Domestic Workers
classifications.
PENNSYLVANIA WORKERS COMPENSATION MANUAL
SECTION 1 UNDERWRITING RULES
EFFECTIVE DATE: DECEMBER 1, 2009
Page 62
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2. Maintenance, Repair Or Construction Operations
a. Codes 0913, 0908, 0912 and 0909 include ordinary repair or maintenance of the insured’s
premises or equipment by domestic workers.
b. Payroll developed in general building maintenance or repair by employees of a
commercial building owner, lessee or real estate management firm or of a business where
the basic and major operations are described by classifications defined as standard
exceptions shall be assigned to Code 971. Payroll developed in general building
maintenance or repair by employees of an apartment house or condominium complex
operator shall be assigned to Code 880. Payroll developed in general building
maintenance or repair by employees of a business assigned to a classification other than
the standard exceptions shall be included in the employer’s applicable field of business
classification.
c. Extraordinary repairs, alterations, new construction, erection or demolition of structures
shall be assigned to construction or erection classifications.
E. BUREAU RATING VALUES AND PREMIUM
1. Bureau Rating Values
The Bureau Rating Values for Codes 0908, 0909, 0912 and 0913 are per capita premium
charges. Terrorism (9740) and Catastrophe (other than Certified Acts of Terrorism) (9741) do
not apply to per capita classification premium charges.
2. Records Required
The insured shall maintain a record of the names, duties and period of service of each
domestic worker.
3. Full Time Domestic Workers
Estimated premium for Codes 0912 and 0913 shall be computed on the estimated number of
such domestic workers during the policy period. If additional domestic workers under Codes
0912 and 0913 are employed during the policy period or if some domestic workers are no
longer employed and are not replaced, the per capita premium charges shall be pro-rated.
Each pro rata charge shall be based on the period of employment but shall not be less than
25% of the per capita charge.
4. Occasional Domestic Workers
A separate per capita charge shall be applied to each concurrently employed domestic worker.
RULE XV – FINAL EARNED PREMIUM DETERMINATION
A. ACTUAL PAYROLL
Final earned premium for the policy shall be determined on actual, instead of estimated, payroll or
other premium basis.
B. PREMIUM DETERMINATION
The determination of final earned premium is governed by the rules, classifications and Bureau rating
values and carrier rating values, subject to modification by applicable rating plans.
C. AUDIT RIGHTS OF CARRIER
The insurance carrier has the right to compute earned premium based on an examination of original
payroll records and books of account of the insured, in accordance with Part Five (Premium Audit) of
the Standard Policy.
D. AUTHORIZED CLASSIFICATIONS
PENNSYLVANIA WORKERS COMPENSATION MANUAL
SECTION 1 UNDERWRITING RULES
EFFECTIVE DATE: DECEMBER 1, 2009
Page 63
© 2009 PENNSYLVANIA COMPENSATION RATING BUREAU
Classifications which are not expressed on the policy shall not be used in auditing the payroll of any
risk upon which a Data Card has been issued by the Pennsylvania Compensation Rating Bureau,
unless upon application to the Bureau Data Card may be revised.
RULE XVl – APPEALS FROM APPLICATION OF THE RATING SYSTEM PROCEDURE
A. Any person, corporate or otherwise, aggrieved by the application of the rating system of the
Pennsylvania Compensation Rating Bureau (the “Bureau”) as approved by the Insurance
Commissioner pursuant to the Insurance Company Law of May 17, 1921, P.L. 682, as amended, (the
“Law”) and the Pennsylvania Workers’ Compensation Act of June 2, 1915, P.L. 736, as amended (the
“Act”) may appeal such application to the Bureau in accordance with this Procedure. “Rating System”
is defined herein to include but is not necessarily limited to the following: the assignment by the
Bureau of an individual business to a particular classification, the continuation or discontinuation of an
entity’s (ies) previous experience to the experience rating of new ownership, revision of losses used
in a business’ experience modification or merit rating, an individual business’ eligibility for or the
percentage of credit under the Pennsylvania Construction Classification Premium Adjustment
Program, the discount or surcharge applied to a business eligible for the Merit Rating Plan or any
other workers’ compensation insurance pricing program filed by the Bureau with the Insurance
Commissioner. The aggrieved party must commence any appeal of the application of the rating
system within twelve (12) months of the policy period in which the application was made by filing an
appeal directly with the Bureau in accordance with this Procedure except for an appeal for revision of
losses used in a business’ experience modification or merit rating which shall be governed by the
specific Revision of Losses provisions of Section 5 and Section 6 of this Manual.
B. An aggrieved party to which the rating system is found on appeal by an Appeals Subcommittee to
have been improperly applied as of the time of the aggrieved party's appeal to the Bureau in
accordance with this Procedure, may have such application amended effective only for the policy
currently in effect at the time the aggrieved party first submitted its appeal to the Bureau, in
accordance with Paragraph F. hereof, and for the immediately preceding expired policy. In the case of
a multiple year policy, application of the rating system may be amended effective only for the policy
year currently in effect at the time the aggrieved party first submitted its appeal to the Bureau, in
accordance with Paragraph F. hereof, and for the policy year expiring no more than twelve (12)
months prior to such appeal to the Bureau.
C An aggrieved party for which application of the rating system is revised as a result of a change in the
Bureau's interpretation of the rating system approved for use by the Insurance Commissioner, may
have such application amended effective as of the date determined by an Appeals Subcommittee of
the Bureau's Classification and Rating Committee, which date may be prospective or retroactive as
determined by the Appeals Subcommittee; provided however, that any retroactive effect shall not
exceed the time period authorized in Paragraph B. hereof.
D. An aggrieved party for which application of the rating system is revised pursuant to a change to the
rating system filed by the Bureau approved for use by the Insurance Commissioner, may have such
application amended effective only upon the aggrieved party’s first normal anniversary date on or
later than the effective date of the change to the rating system approved by the Insurance
Commissioner.
E. Nothing in this Procedure shall permit an aggrieved party for which application of the rating system is
revised on a new and renewal basis only to have such application amended effective before the
aggrieved party’s first normal policy anniversary date effective on or later than the effective date of
the change to the rating system approved by the Insurance Commissioner.
F An aggrieved party who wants to appeal an application of the rating system must first submit a written
request for review thereof to the Bureau together with all information in support of its appeal. The
Bureau staff shall review the request and supporting information. To make certain the facts of an
appeal are fully agreed upon by the Bureau and the appellant, the Bureau staff may make written
inquiries to the appellant an/or (as circumstances warrant) visit the appellant's Pennsylvania
workplace(s). The Bureau shall notify the appellant in writing that staff's Paragraph F. review has
been completed and that this letter is the Bureau's final decision. If the appellant is still aggrieved by
the rating system application following completion of the Bureau staff's review and final decision, the
appellant shall have the right to present its appeal to an Appeals Subcommittee of the Bureau's
Classification and Rating Committee in accordance with the provisions of this Procedure. A further
PENNSYLVANIA WORKERS COMPENSATION MANUAL
SECTION 1 UNDERWRITING RULES
EFFECTIVE DATE: DECEMBER 1, 2009
Page 64
© 2009 PENNSYLVANIA COMPENSATION RATING BUREAU
appeal by an appellant of the Appeals Subcommittee decision may be taken to the Insurance
Commissioner pursuant to Section 654 of the Law and Section 717 of the Act, only after the appellant
has first exhausted its rights pursuant to this Procedure.
G. Any party aggrieved by a final decision of the Bureau staff pursuant to Paragraph F. shall have the
right to appeal to an Appeals Subcommittee of the Classification and Rating Committee of the
Bureau. An Appeals Subcommittee shall be comprised of an equal number of public and insurer
members. Any Appeals Subcommittee member having a direct pecuniary interest in the aggrieved
party's appeal shall recuse its representative from the appeal proceeding.
Such appeal must be received by the Bureau no later than ninety (90) days from the date of the
Bureau staff's final decision referred to in Paragraph F.
H. All appeals pursuant to Paragraph G. hereof must be filed with the Bureau and must meet the
following requirements:
1. The appeal must be in writing.
2. The appeal must set forth in detail the nature of the complaint, all reasons for believing the
Bureau decision to be in error, all documents in support of the appeal, the specific nature
of relief desired, and that the aggrieved party or its designated representative will appear
before an Appeals Subcommittee of the Classification and Rating Committee at a to be
determined hearing date. The Bureau urges the aggrieved party to appear before the
Appeals Subcommittee as the aggrieved party is better able to respond to any questions
the Appeals Subcommittee may have regarding the aggrieved party’s business operations
than a designated representative.
3. In the event an appeal does not fulfill the requirements of Paragraph H. 2. hereof the
Bureau shall make a written request for the needed additional information from the
aggrieved party, who shall have thirty (30) days to comply. Upon a written showing by the
aggrieved party that the requested additional information cannot be provided within thirty
(30) days, the Bureau may grant an extension consistent with the circumstances. If the
requested additional information is not submitted within the specified time period, as
extended, the appeal shall be dismissed.
I. Following receipt of an appeal to an Appeals Sub-committee of the Classification and Rating
Committee, the Bureau will notify the appellant of the time and place of the Appeals Subcommittee
meeting at which the matter shall be heard. The appeal shall be dismissed if an appellant, after due
notice pursuant to Paragraph L. hereof, fails to be present or represented at three such scheduled
hearings.
J. The procedure at the hearing shall be as informal as possible and shall provide for the following
steps:
1. The Chair of the Classification and Rating Committee shall introduce the appellant to the
Appeals Subcommittee.
2. The appellant may at its option make an oral presentation of its case, or may rely solely
upon the written material previously submitted to the Bureau in connection with the appeal.
3. Bureau staff members or consultants to the Bureau may present testimony and other
information to the Appeals Subcommittee relating to the matter under consideration.
4. The appellant or the Bureau may also present witnesses and documentary evidence
relevant to the appeal, and the appellant and the Bureau shall have the opportunity to
direct questions to any witness who has testified before the Appeals Subcommittee on
appeal.
5. After all testimony and other evidence have been presented, the hearing shall be declared
closed by the Chair of the Committee and the appellant shall leave the hearing room. Such
hearing may, in the discretion of the Appeals Subcommittee, be reopened at any time prior
to the Appeals Subcommittee's decision.
PENNSYLVANIA WORKERS COMPENSATION MANUAL
SECTION 1 UNDERWRITING RULES
EFFECTIVE DATE: DECEMBER 1, 2009
Page 65
© 2009 PENNSYLVANIA COMPENSATION RATING BUREAU
6. After the hearing is closed, the Appeals Sub-committee shall arrive at its decision in
executive session.
7. The decision shall be set forth in writing, shall specify all factual and other bases for the
decision, and shall be sent to the appellant no later than thirty (30) days after the hearing.
8. The Appeals Subcommittee decision shall be included in the minutes of the meetings of
the Classification and Rating Committee and be retained in the records of the Bureau.
9. The minutes of an Appeals Subcommittee of the Classification and Rating Committee
meeting shall be kept by the Bureau staff. As hearings before the Appeals Subcommittee
are as informal as possible there shall be no stenographic, audio or video record thereof.
10. If travel is required for the aggrieved person to be heard by the Appeals Subcommittee in
person, the aggrieved person will be reimbursed for travel expenses in the same manner
as members of the Appeals Subcommittee.
K. An appellant is not required to be represented by an attorney at any stage in any proceeding.
However, an appellant has a right at the appellant’s expense to be represented by an attorney. An
appellant who is represented by an attorney shall notify the Bureau in writing and shall also furnish
the Bureau with the attorney's name and mailing address. After the Bureau has received such
notification from an appellant, subsequent papers in the proceeding to be served on such appellant
shall be served only upon the attorney designated by the appellant.
L. Notices of any requirements for additional information pursuant to Paragraph H. 3. or of the time and
place of the Appeals Subcommittee hearing shall be given to the appellant, or its attorney pursuant to
Paragraph K., in writing personally or by certified mail (with return receipt). The notice of hearing shall
be made at least ten (10) days in advance of such hearing, unless such notice is waived by the
appellant or its attorney. When a meeting is adjourned to another time or place, written notice need
not be given of the adjourned hearing if the time and place thereof are announced at the meeting
during which all parties are present at which the adjournment is taken. All other notices, orders,
papers, or communications, including a copy of the decision, may be served on an appellant by hand
delivery or by regular first class mail to the appellant or its attorney at the last known mailing address
provided to the Bureau.
M. During the course of all proceedings governed by this Procedure, the Appeals Subcommittee shall
have the power to interpret and apply the foregoing Paragraphs, and such interpretation shall be
binding upon the parties.
N. Appeals from a final decision of the Appeals Subcommittee pursuant to this Procedure must be filed
with the Insurance Commissioner within thirty (30) days of the mailing date of the Committee's
decision as provided in Section 654 of the Law and Section 717 of the Act.
O. Unless otherwise specifically provided by this Procedure, all periods of time shall be calculated from
the postmark on materials sent by first class or certified mail through the United States Postal Service
or the date of any hand delivery, whichever date is earlier.
P. Nothing contained in this Procedure shall prevent efforts to resolve any controversies governed by
this Procedure on an informal basis at any stage of the proceedings before the Bureau or the Appeals
Subcommittee.
PENNSYLVANIA WORKERS COMPENSATION MANUAL
SECTION 2 RATING VALUES
EFFECTIVE DATE: DECEMBER 1, 2009
Page 1
© 2009 PENNSYLVANIA COMPENSATION RATING BUREAU
TABLE OF CONTENTS
SECTION 2 – CLASSIFICATIONS AND BUREAU RATING VALUES
BUREAU RATING VALUES
VOLUNTEER FIREMEN
EMPLOYER ASSESSEMENT
U.S. LONGSHORE AND HARBOR WORKERS’ ACT COVERAGE
RETROSPECTIVE RATING VALUES
CLASSIFICATIONS – NUMERIC AND GROUP ARRANGEMENT
WORKERS COMPENSATION – DOMESTIC WORKERS
EXPLOSIVES AND AMMUNITION MANFACTURING
MARITIME OR FEDERAL EMPLOYMENTS
AIRCRAFT OPERATIONS
COAL MINE CLASSIFICATIONS
PENNSYLVANIA WORKERS COMPENSATION MANUAL
SECTION 2 RATING VALUES
EFFECTIVE DATE: DECEMBER 1, 2009
Page 2
© 2009 PENNSYLVANIA COMPENSATION RATING BUREAU
LOSS COSTS AND EXPECTED LOSS FACTORS
FOR PENNSYLVANIA WORKERS COMPENSATION INSURANCE
EXPERIENCE RATING PLAN HAZARD HAZARD
CODE LOSS EXPECTED LOSS FACTORS TABLE * GROUP GROUP
NO COST A-1 A-2 A-3 A-G 1-4
005 16.86 8.95 11.65 13.31 F 3
007 5.08 2.70 3.51 4.01 C 2
009 26.37 14.00 18.22 20.82 G 4
015 16.79 8.91 11.60 13.25 E 3
025 3.97 1.97 2.52 2.85 G 4
028 3.56 1.77 2.26 2.56 F 3
050 2.54 1.26 1.61 1.82 F 3
051 3.19 1.58 2.02 2.29 F 3
055 4.19 2.08 2.66 3.01 F 3
059 4.40 2.19 2.79 3.16 E 3
101 2.90 1.55 2.00 2.28 E 3
103 1.31 0.70 0.90 1.03 C 2
104 2.93 1.56 2.02 2.30 B 1
105 4.05 2.16 2.79 3.18 D 2
106 4.73 2.52 3.26 3.71 C 2
107 2.51 1.34 1.73 1.97 B 1
108 3.88 2.07 2.67 3.05 C 2
109 4.73 2.52 3.26 3.71 C 2
110 3.41 1.82 2.35 2.68 B 1
111 3.78 2.02 2.61 2.97 C 2
112 9.55 5.09 6.59 7.50 C 2
113 2.37 1.27 1.64 1.87 C 2
114 7.72 4.12 5.33 6.07 E 3
115 1.95 1.04 1.34 1.53 D 2
119 4.91 2.62 3.39 3.86 C 2
130 5.43 2.89 3.75 4.27 E 3
132 2.07 1.10 1.43 1.63 C 2
134 3.61 1.93 2.49 2.84 C 2
135 2.83 1.51 1.95 2.22 C 2
136 2.55 1.36 1.76 2.00 C 2
* Table A-1 applies to the most current policy year, Table A-2 to the first prior year, and
Table A-3 to the second prior policy year.
PENNSYLVANIA WORKERS COMPENSATION MANUAL
SECTION 2 RATING VALUES
EFFECTIVE DATE: DECEMBER 1, 2009
Page 3
© 2009 PENNSYLVANIA COMPENSATION RATING BUREAU
LOSS COSTS AND EXPECTED LOSS FACTORS
FOR PENNSYLVANIA WORKERS COMPENSATION INSURANCE
EXPERIENCE RATING PLAN HAZARD HAZARD
CODE LOSS EXPECTED LOSS FACTORS TABLE * GROUP GROUP
NO COST A-1 A-2 A-3 A-G 1-4
139 4.06 2.16 2.80 3.19 C 2
141 3.82 2.04 2.64 3.01 B 1
142 1.99 1.06 1.37 1.56 C 2
161 2.33 1.24 1.61 1.83 C 2
163 3.33 1.77 2.30 2.61 C 2
165 4.45 2.37 3.07 3.50 B 1
166 2.97 1.58 2.05 2.34 C 2
185 3.74 2.00 2.58 2.94 B 1
187 3.21 1.71 2.21 2.52 B 1
189 3.07 1.64 2.12 2.42 C 2
191 3.07 1.64 2.12 2.42 C 2
201 3.97 2.11 2.74 3.12 D 2
204 2.58 1.37 1.78 2.02 B 1
205 2.95 1.57 2.04 2.32 B 1
221 2.00 1.07 1.38 1.57 C 2
222 3.02 1.61 2.09 2.38 C 2
225 2.95 1.57 2.04 2.32 C 2
227 4.05 2.16 2.79 3.18 C 2
255 2.70 1.44 1.86 2.12 E 3
257 2.81 1.50 1.94 2.21 C 2
261 3.38 1.80 2.33 2.65 C 2
263 3.10 1.66 2.14 2.44 C 2
265 3.04 1.62 2.10 2.39 C 2
275 2.62 1.40 1.81 2.06 C 2
276 3.82 2.04 2.64 3.01 C 2
281 2.26 1.21 1.56 1.78 B 1
282 4.80 2.56 3.31 3.77 D 2
285 2.54 1.35 1.75 1.99 B 1
291 3.36 1.79 2.32 2.64 E 3
* Table A-1 applies to the most current policy year, Table A-2 to the first prior year, and
Table A-3 to the second prior policy year.
PENNSYLVANIA WORKERS COMPENSATION MANUAL
SECTION 2 RATING VALUES
EFFECTIVE DATE: DECEMBER 1, 2009
Page 4
© 2009 PENNSYLVANIA COMPENSATION RATING BUREAU
LOSS COSTS AND EXPECTED LOSS FACTORS
FOR PENNSYLVANIA WORKERS COMPENSATION INSURANCE
EXPERIENCE RATING PLAN HAZARD HAZARD
CODE LOSS EXPECTED LOSS FACTORS TABLE * GROUP GROUP
NOB COST A-1 A-2 A-3 A-G 1-4
297 2.91 1.55 2.01 2.29 B 1
301 5.63 3.00 3.89 4.42 F 3
305 4.37 2.33 3.02 3.44 D 2
306 3.91 2.08 2.70 3.07 B 1
311 2.83 1.51 1.95 2.22 C 2
319 3.57 1.90 2.46 2.81 A 1
323 2.60 1.38 1.79 2.04 C 2
327 3.44 1.83 2.37 2.70 C 2
402 5.19 2.77 3.59 4.08 E 3
403 2.94 1.57 2.03 2.31 C 2
404 4.54 2.42 3.14 3.57 E 3
406 4.83 2.57 3.33 3.79 E 3
407 3.89 2.07 2.68 3.05 C 2
411 5.29 2.82 3.65 4.15 E 3
413 5.53 2.95 3.82 4.34 E 3
415 3.34 1.78 2.30 2.62 E 3
416 5.87 3.13 4.05 4.62 C 2
421 5.92 3.16 4.09 4.66 E 3
425 7.89 4.21 5.45 6.20 E 3
427 3.84 2.05 2.65 3.02 E 3
429 4.76 2.54 3.28 3.74 D 2
431 6.12 3.26 4.22 4.81 C 2
433 3.50 1.87 2.42 2.75 C 2
435 4.59 2.44 3.16 3.60 C 2
441 1.42 0.76 0.98 1.12 C 2
445 2.75 a 1.47 1.90 2.16 C 2
446 1.88 1.00 1.30 1.47 B 1
447 4.67 b 2.49 3.22 3.67 E 3
* Table A-1 applies to the most current policy year, Table A-2 to the first prior year, and
Table A-3 to the second prior policy year.
a OD: $0.17 Supplemental is not subject to experience rating. Code as 0067.
b OD: $0.13 Supplemental is not subject to experience rating. Code as 0066.
PENNSYLVANIA WORKERS COMPENSATION MANUAL
SECTION 2 RATING VALUES
EFFECTIVE DATE: DECEMBER 1, 2009
Page 5
© 2009 PENNSYLVANIA COMPENSATION RATING BUREAU
LOSS COSTS AND EXPECTED LOSS FACTORS
FOR PENNSYLVANIA WORKERS COMPENSATION INSURANCE
EXPERIENCE RATING PLAN HAZARD HAZARD
CODE LOSS EXPECTED LOSS FACTORS TABLE * GROUP GROUP
NO COST A-1 A-2 A-3 A-G 1-4
449 3.04 1.62 2.10 2.39 D 2
451 3.74 2.00 2.58 2.94 D 2
454 3.75 2.00 2.59 2.95 C 2
456 3.78 2.02 2.61 2.97 D 2
457 3.57 1.90 2.46 2.81 C 2
458 2.35 1.25 1.62 1.85 B 1
459 1.29 0.69 0.89 1.01 C 2
461 2.74 1.46 1.89 2.15 D 2
463 2.22 1.18 1.53 1.75 D 2
465 2.97 1.58 2.05 2.34 D 2
467 3.46 1.84 2.39 2.72 B 1
471 1.17 0.62 0.81 0.92 B 1
472 1.17 0.62 0.81 0.92 B 1
473 2.64 1.41 1.82 2.07 B 1
474 0.60 0.32 0.41 0.47 C 2
475 2.78 1.48 1.92 2.18 D 2
476 1.29 0.69 0.89 1.01 C 2
477 2.42 1.29 1.67 1.91 C 2
483 1.25 0.67 0.86 0.98 B 1
485 1.37 0.73 0.95 1.08 B 1
486 1.86 0.99 1.28 1.46 C 2
487 1.20 0.64 0.83 0.94 C 2
488 1.12 0.59 0.77 0.88 B 1
489 1.72 0.92 1.19 1.36 B 1
491 3.75 2.00 2.59 2.95 C 2
493 3.53 1.88 2.44 2.77 C 2
495 4.77 2.54 3.29 3.75 D 2
497 1.49 0.80 1.03 1.17 B 1
499 3.56 1.90 2.46 2.80 D 2
501 2.99 1.60 2.07 2.35 E 3
* Table A-1 applies to the most current policy year, Table A-2 to the first prior year, and
Table A-3 to the second prior policy year.
PENNSYLVANIA WORKERS COMPENSATION MANUAL
SECTION 2 RATING VALUES
EFFECTIVE DATE: DECEMBER 1, 2009
Page 6
© 2009 PENNSYLVANIA COMPENSATION RATING BUREAU
LOSS COSTS AND EXPECTED LOSS FACTORS
FOR PENNSYLVANIA WORKERS COMPENSATION INSURANCE
EXPERIENCE RATING PLAN HAZARD HAZARD
CODE LOSS EXPECTED LOSS FACTORS TABLE * GROUP GROUP
NO COST A-1 A-2 A-3 A-G 1-4
502 3.54 1.89 2.44 2.78 A 1
506 1.94 1.03 1.34 1.52 C 2
507 3.07 1.64 2.12 2.42 F 3
509 5.90 3.15 4.08 4.64 G 4
511 5.52 2.94 3.81 4.34 E 3
512 5.50 2.93 3.80 4.32 E 3
513 3.15 c 1.68 2.18 2.48 B 1
514 4.68 2.49 3.23 3.68 E 3
535 3.05 1.63 2.11 2.40 C 2
536 5.11 2.73 3.53 4.02 C 2
544 8.84 4.71 6.10 6.94 E 3
551 1.64 0.88 1.13 1.29 F 3
553 1.26 0.67 0.87 0.99 G 4
555 0.69 0.37 0.48 0.54 B 1
563 2.19 1.17 1.51 1.72 C 2
571 2.73 1.46 1.88 2.14 C 2
573 3.74 2.00 2.58 2.94 F 3
581 2.14 1.14 1.48 1.68 E 3
587 2.75 1.47 1.90 2.16 C 2
601 7.18 3.49 4.46 5.05 G 4
602 4.69 2.26 2.89 3.27 F 3
603 5.41 2.55 3.27 3.69 F 3
605 6.72 3.25 4.15 4.70 E 3
606 11.13 5.37 6.87 7.77 G 4
607 7.56 3.71 4.75 5.37 F 3
608 6.27 3.01 3.85 4.36 F 3
609 5.10 2.48 3.17 3.58 F 3
611 9.27 4.44 5.68 6.43 E 3
615 d 11.01 5.30 6.77 7.66 G 4
0152 1.19 G 4
* Table A-1 applies to the most current policy year, Table A-2 to the first prior year, and
Table A-3 to the second prior policy year.
Associated classes – both codes must be applied. The second code is not subject to experience
rating and applies to the full payroll of the associated class.
c OD: $0.20 Supplemental is not subject to experience rating. Code as 0176.
d OD: $0.84 Supplemental applies when coverage for Federal black lung is provided. It is not
subject to experience rating. Code as 0164.
PENNSYLVANIA WORKERS COMPENSATION MANUAL
SECTION 2 RATING VALUES
EFFECTIVE DATE: DECEMBER 1, 2009
Page 7
© 2009 PENNSYLVANIA COMPENSATION RATING BUREAU
LOSS COSTS AND EXPECTED LOSS FACTORS
FOR PENNSYLVANIA WORKERS COMPENSATION INSURANCE
EXPERIENCE RATING PLAN HAZARD HAZARD
CODE LOSS EXPECTED LOSS FACTORS TABLE * GROUP GROUP
NO COST A-1 A-2 A-3 A-G 1-4
617 5.22 2.53 3.23 3.66 F 3
645 6.08 2.83 3.62 4.09 F 3
646 5.13 2.44 3.12 3.53 E 3
647 6.68 3.29 4.21 4.76 D 2
648 5.51 2.66 3.41 3.85 E 3
649 2.90 1.32 1.69 1.92 E 3
651 6.76 3.25 4.16 4.71 F 3
652 8.20 4.05 5.18 5.86 F 3
653 7.32 3.50 4.47 5.06 F 3
654 8.55 4.06 5.19 5.87 F 3
655 12.65 6.13 7.84 8.87 G 4
656 6.85 3.33 4.26 4.82 G 4
657 8.26 3.99 5.11 5.78 F 3
658 8.44 3.97 5.08 5.75 F 3
659 16.69 8.07 10.32 11.68 G 4
660 2.23 1.08 1.38 1.57 E 3
661 3.53 1.63 2.09 2.36 E 3
662 4.76 2.35 3.01 3.40 E 3
663 4.34 2.07 2.65 2.99 E 3
664 4.17 1.96 2.51 2.84 E 3
665 7.82 3.80 4.86 5.50 F 3
666 5.97 2.83 3.61 4.09 E 3
667 1.84 0.89 1.13 1.28 F 3
668 4.72 2.25 2.88 3.26 E 3
669 6.74 3.21 4.11 4.65 F 3
670 4.84 2.27 2.90 3.28 E 3
673 5.03 2.49 3.18 3.60 F 3
674 4.48 2.22 2.84 3.21 E 3
675 4.44 2.16 2.76 3.13 F 3
676 4.63 2.18 2.78 3.15 E 3
677 4.02 1.94 2.49 2.81 G 4
679 7.91 3.82 4.88 5.52 F 3
681 4.66 2.27 2.90 3.28 F 3
* Table A-1 applies to the most current policy year, Table A-2 to the first prior year, and
Table A-3 to the second prior policy year.
PENNSYLVANIA WORKERS COMPENSATION MANUAL
SECTION 2 RATING VALUES
EFFECTIVE DATE: DECEMBER 1, 2009
Page 8
© 2009 PENNSYLVANIA COMPENSATION RATING BUREAU
LOSS COSTS AND EXPECTED LOSS FACTORS
FOR PENNSYLVANIA WORKERS COMPENSATION INSURANCE
EXPERIENCE RATING PLAN HAZARD HAZARD
CODE LOSS EXPECTED LOSS FACTORS TABLE * GROUP GROUP
NO COST A-1 A-2 A-3 A-G 1-4
682 12.85 6.25 7.99 9.04 E 3
691 6.31 3.05 3.90 4.41 F 3
693 8.29 4.01 5.13 5.81 F 3
695 4.17 2.02 2.58 2.92 E 3
709 1.92 0.95 1.22 1.38 G 4
716 2.71 1.34 1.72 1.95 E 3
718 2.85 1.42 1.81 2.05 E 3
721 10.14 5.41 7.00 7.97 F 3
744 1.55 0.83 1.07 1.22 D 2
751 2.52 1.34 1.74 1.98 E 3
752 0.93 0.50 0.64 0.73 G 4
753 3.04 1.62 2.10 2.39 C 2
755 0.92 0.49 0.64 0.73 F 3
757 1.84 0.98 1.27 1.44 E 3
759 4.51 2.41 3.12 3.55 E 3
801 6.64 3.53 4.59 5.25 E 3
803 18.39 9.76 12.70 14.52 E 3
804 3.11 1.65 2.15 2.46 E 3
805 5.05 2.68 3.49 3.99 E 3
806 10.49 5.57 7.25 8.28 E 3
807 5.33 2.81 3.65 4.17 E 3
808 6.09 3.23 4.20 4.81 E 3
809 4.81 2.55 3.32 3.80 F 3
810 5.61 2.98 3.87 4.43 F 3
0162 0.84 E 3
811 7.61 4.04 5.26 6.01 E 3
812 5.96 3.17 4.12 4.71 F 3
813 5.29 2.81 3.65 4.17 D 2
814 3.52 1.87 2.43 2.78 C 2
815 3.33 1.77 2.30 2.63 D 2
* Table A-1 applies to the most current policy year, Table A-2 to the first prior year, and
Table A-3 to the second prior policy year.
Associated classes – both codes must be applied. The second code is not subject to experience
rating and applies to the full payroll of the associated class.
PENNSYLVANIA WORKERS COMPENSATION MANUAL
SECTION 2 RATING VALUES
EFFECTIVE DATE: DECEMBER 1, 2009
Page 9
© 2009 PENNSYLVANIA COMPENSATION RATING BUREAU
LOSS COSTS AND EXPECTED LOSS FACTORS
FOR PENNSYLVANIA WORKERS COMPENSATION INSURANCE
EXPERIENCE RATING PLAN HAZARD HAZARD
CODE LOSS EXPECTED LOSS FACTORS TABLE * GROUP GROUP
NO COST A-1 A-2 A-3 A-G 1-4