State Compensation Insurance Fund considers the following items when establishing a schedule rating for a policy.
Classification Evaluation. This category evaluates any differences in the operations of the employer when compared to other operations normally contemplated within the same classification. This evaluation may include, but is not limited to, the following:
- Rate Adequacy: Are the employer’s operations typical for the classification to which the payroll is being assigned? For example: is the exposure light or heavy within the classification? (e.g., size of product, weight of material, type of service performed); are there positive or negative characteristics of the employer’s operations compared to operations normally contemplated within the classification? (e.g., state-of-the-art equipment, obsolete equipment or processes); does the operation include the typical mix of exposures, or are we being asked to insure only the most hazardous exposures?.
- Payroll Adequacy: Are the employer’s salary practices similar to other employers in the same classification? (e.g., part time versus full time, seasonal, volunteers)
- Administrative Expenses: Do the employer’s operations require any unusual expenses not included in the base rate for the classification? For example: multiple locations, remote locations, extraordinary safety or claims service requirements.
Management Business Practices. This category evaluates whether the employer has implemented management practices or exhibits management behavior that may have a positive or negative effect on losses. This evaluation may include, but is not limited to, the following:
- Personnel Practices: For example specified job requirements for hiring, pre-employment medical screenings, policy of a drug-free workplace, exit interviews.
- Employee Benefits: For example health insurance, employee physicals, wellness program, employee assistance program.
- Financial Evaluation: For example payment history including timeliness of premium payment, cooperation in the scheduling and conduct of premium audits, credit appraisals, years in business.
- Employer/Employee Relationship: For example employee turnover rate, number of litigated claims, timeliness in reporting injuries.
- Workers’ Compensation Practices: For example timeliness of claim reporting, effectiveness in channeling workers to our Medical Provider Network, effectiveness of employer’s Return To Work program.
Management Safety Practices. This category evaluates the effectiveness of the employer’s safety SB 198 Injury and Illness Prevention Program (IIPP). This evaluation may include, but is not limited to, the following:
- Management commitment to employee safety
- Actual indemnity claims frequency compared to that expected for the classification and payroll
- Maintenance of equipment and plant
- Hazard identification and appropriate controls
- Ergonomic identification and appropriate controls
- Employee training and supervision
- Material handling procedures
- Compliance with Federal/State OSHA standards
- Assessment of this category may include a Regional Loss Control evaluation.