Section VI - Examples
SECTION VI - EXAMPLES
Section VI contains examples of certain common types of reports required by the DCRB’s Statistical Plan. The examples are for illustration purposes only. The rates should not be used for filing purposes. Consult the Delaware Manual of Rules, Classifications and Rating Values for the appropriate rating values. For maximum benefit, the examples should be carefully studied in connection with the applicable instructions in the Plan. Some examples may show optional fields coded. Refer to the coding sections of this plan for mandatory and optional filing requirements.
Questions regarding any phase of the Plan or the submission of reports should be referred directly to the Statistical Department of the DCRB.
In several instances related reports have been brought together to form a single illustration in order to make the examples more meaningful. Appropriate discussion, comments and notes follow.
The Unit Statistical Report — and the Individual Case Report must be submitted full size (8½” x 11”).
Example 1 – Loss Correction Report
The correction was necessary because of the revised jurisdiction state. The jurisdiction state is the governing jurisdiction which will administer the claim and which statutes will apply to the claim adjustment process when that state is different from the exposure state.
When revising loss information on a loss correction report, report all information on the previous and revised sides of the claim. The risk totals shown must be the revised totals only.
Note: Even if the totals were being changed due to a change in an amount on a claim, the correction type would still be a “L”.
example-1Example 2 – Deductible; Rated Risk
This deductible is to be applied after the experience modification. Additional premium for Employers Liability Increased Limits is subject to the deductible credit.
Note: When reporting electronically both the modification effective date and the rate effective date must be reported for each exposure record. Within each split period, these dates should equal each other and should reflect the applicable anniversary rating date.
example-2Example 3 – Deductible; Rated Risk with Construction Credit
This deductible is to be applied after the experience modification. Additional premium for Employers Liability Increased Limits is subject to the deductible credit.
The Delaware Construction Credit Adjustment Program (DCCPAP) is applied to the modified premium inclusive of the non-ratable elements and supplement surcharge premiums.
sample-3-1Example 4 – Short Rate Cancellation; Rated Risk
When a policy is canceled short term, the actual payroll and manual premium developed shall be reported. The additional premium charged as a penalty for short-term policies is determined by extending the payrolls to a full policy period, determining the resulting premiums and applying the appropriate factor from the short rate cancellation table. Refer to – the Delaware Manual of Rules, Classifications and Rating Values for Workers Compensation and for Employers Liability Insurance for the Short Rate Cancellation Table.
Premium developed from actual exposure
$15,312 + $1,878 = $17,190
Short Rate Penalty Premium Calculation
- Actual Policy Period = 6 months
- Payroll extended to an annual basis180,559 x 365 days/181 days = 364,1113,894 x 365 days/181 days = 7,853
- Annual Premiums
- Rated
Class Payroll Rate Premium 0513 364,111 8.75 $31,860 0955 7,853 0.49 $38 Total Subject Premium $31,898 Experience Modification .968
Total Modified Premium $30,877 Total Standard Premium $30,877 + $3,787 = $34,664
- Non-Rated
Class Payroll Rate Premium 0176 364,111 1.04 $3,787
- Rated
- Short Rate Percentage 6 months = .60
- Short Rate premium for canceled policy = $34,664 x .60 = $20,798
- Short Rate penalty premium code 0931 = $20,798 – $17,190 = $3,608
Example 5 – Ratable Class; Mandatory Non-Ratable Element
For class codes 4771, 7405 and 7413, there is a Mandatory Non-Ratable Element established by the DCRB and shown on the DCRB Data Card. When reporting these classifications, the ratable element is reported above line “A” on the hard copy unit and the premium is subject to the experience modification. The mandatory non-ratable element is reported below line “C”, on the hard copy unit.
example-5Example 6 – Ratable Class; Optional Non-Ratable Element
An Optional Non-Ratable Element is established by the DCRB and shown on the DCRB Data Card when the non-ratable element is authorized by the DCRB’s Classification Department. This example reflects ratable class Code 0512 and the optional, non-ratable Code 0175. Note that while this specific example uses these two classes only, it is also applicable to any other DCRB established, optional non-ratable codes such as those associated with classification Code 0513 and classifications with radiation or carcinogen exposure.
When reporting these classifications, the ratable element is reported above line “A” on the hard copy unit, and the premium is subject to the experience modification. The optional non-ratable element is reported below line “C” on the hard copy unit.
example-6Example 7 – First Report Requiring an Individual Case Report; Rated Risk
Note the treatment of the experience modification on lines “A”, “B”, “C” on the hard copy unit.
Also note this risk has qualified for the Delaware Workplace Safety Program (Code 9880). The Delaware Workplace Safety Program Credit is to be applied to the manual premium after the application of the experience modification. When applicable the employers liability should be calculated and the Increased Limits premium is subject to the Delaware Workplace Safety Program Credit.
example-7Example 7a – Individual Case Report; Permanent Total Disability
Use Table III-M-A
Type Claim – State Act Trauma
Date of Accident – 10/01/13
Average Weekly Wage – $459
Date of Birth – 04/01/61
Effective Date – 07/01/13
Employee’s age @ Valuation – 54 (sex – M)
Date of Valuation – 01/01/15
No. Wks. Benefits Pd. to Valuation
1st Level Report – Open
Date – 457 days / 7 days = 65.286 wks
Present Value of Future Payments
Indemnity Paid to Valuation
Weekly Benefit = .6667 x ($459) = $306
Date – 65.286 x 306 = 19,978
Present Value of $1 @ Age 54 = 16.175 {Table III-M-A} $306 x 52 x 16.175 = $257,377
example-7aExample 8 – Individual Risk Experience with USL&HW Coverage
Note that the Federal Class 6843F has exposure coverage and loss coverage act Code 02.
An Individual Case Report must be filed concurrently with the submission of individual risk experience when the claim is filed as a death or permanent total claim.
Note: USL&HW and Federal class exposures are included when calculating Terrorism, Code 9740 and Catastrophe (other than Certified Acts of Terrorism), Code 9741.
Refer to Example 8a and 8b for the Individual Case Reports.
example-8Example 8a – Individual Case Report with USL&HW Coverage; Permanent Total Disability
Use Table USL&HW III-M-C (Male)
Type – USL&HW-Trauma
Date of Accident – 10/01/13
Average Weekly Wage – $459
Date of Birth – 03/15/49
Effective Date – 07/01/13
Employee’s age @ Valuation Date -66 (sex – M)
Date of Valuation – 01/01/15
Loss Conditions – 02/01/01/01/00
1st Level Report – Open
Present Value of Future Payments
Weekly Benefit = .6667 x ($459) = $306
Present Value of $1 = 17.313 {Table USL&HW III-M-C}
$306 x 52 x 17.313= $275,484
(Wkly Benefit) x (52 Wks) x (Pres. Val. Factor)
Indemnity Paid to Valuation Date
Benefits Paid from 10/01/13 to 01/01/15 [457 days / 7 = 65.286 (Wks)]
65.286 x $306 = $19,978
Total Indemnity Incurred = $275,484+ $19,978 = $295,462
Class code, occupation, cause of accident and injury description code must relate to each other. An adjustment to allow for survivorship benefits would be needed if the beneficiary has a spouse.
8aExample 8b – Individual Case Report; Death, Widow Only
Use Table I-A & Table II-A
Type – State Act-Trauma
Widow’s Date of Birth – 05/01/48
Average Weekly Wage – $475
Age at Widowhood – 65
Effective Date – 07/01/13
Age at Valuation – 67
Date at Valuation – 01/01/15
1st Level Report – Open
Date of Accident – 08/01/13
Date of Death – 08/01/13
8bExample 9 – Second Reporting of Losses for Unit for Example 10
Note that all claims previously reported as open have been reported and revalued as of 30 months after the effective date of the policy (valuation 01/16).
Note that the first loss record is the claim’s previously reported information, indicated by a P in the Update Type field. The second loss record is the claim’s revised information, indicated by an R in the Update Type field. The loss totals are the revised totals only.
When reporting loss information on a subsequent level report, report all information on the previous and revised sides of the claim. The risk totals shown must be the revised totals only.
Refer to Examples 9a and 9b for Individual Case Reports.
9Example 9a – Individual Case Report; Permanent Total Disability; 2nd Report Level
Use Table USL&HW III-M-C (Male)
Type – USL&HW-Trauma
Date of Accident – 10/01/13
Average Weekly Wage – $459
Date of Birth – 03/15/49
Effective Date – 07/01/13
Employee’s Age at Valuation Date – 67 (sex – M)
Date of Valuation – 01/01/16
Maximum Weekly Benefit – $1,325.18
Present Value of Future Payments $306 x 52 x 16.542 = $263,216
Indemnity Paid to Valuation Date
Benefits Paid from 10/01/13 to 01/01/16 [822 days / 7 = 117.429 (Wks)]
(117.429 Wks) x $306 = $35,933
Total Indemnity Incurred – $263,216+ $35,933 = $299,149
9aExample 9b – Individual Case Report; Death, Widow Only; 2nd Report Level
Use Table I-A & Table II-A
Type – State Act-Trauma
Widow’s Date of Birth – 05/01/48
Average Weekly Wage – $475
Age at Widowhood – 65
Effective Date – 07/01/13
Age at Valuation – 68
Date at Valuation – 01/01/16
2nd Level Report – Open
Date of Accident – 08/01/13
Date of Death – 08/01/13
Present Value of Future Payments
Weekly Benefit = .6667 x ($475) = $316.68
Present Value of $1 = 12.419 – Widowhood at age 65, ª[x] + 3 Value
$316.68 x 52 x 12.419 = $204,508
Lump Sum Dowry Benefit
Duration – 2 years = 104 weeks
Weekly Benefit – $316.68
Present Value of Remarriage Dowry = .0082
$316.68 x 104 x .0082 = $270
Indemnity Paid to Valuation Date
Benefits Paid from 08/01/13 to 01/01/16 – 883 days / 7 = 126.143 Wks (126.143 Wks) x $316.68 = $39,947
9bExample 10 – Unit Reporting; Individual Risk Experience Including Premiums for Operation Subject to the USL&HW Compensation Act for a “Non-F” Classification
When reporting a classification, which includes coverage for the USL&HW Compensation Act, increase the rating value by the applicable USL&HW percentage and apply all other Manual rules as required. The increased rate shall apply only to the payroll of those employees engaged in operations subject to the USL&HW Compensation Act.
Note: USL&HW and Federal class exposures are included when calculating Terrorism, Code 9740 and Catastrophe (other than Certified Acts of Terrorism), Code 9741.
Note: Class 665’s rating value as of 7/1/13 is 9.38, the rating value including coverage for the USL&HW Compensation Act is $9.38 x 1.508 x 1.580 = $22.35. Refer to Section I, Rule XII of the Delaware Manual of Rules, Classifications and Rating Values for Workers Compensation and Employers Liability Insurance for further instructions concerning the USL&HW Compensation Act.
Refer to Example 10a for Individual Case Report.
10Example 10a – Individual Case Report; Permanent Total Claim with Survivorship Benefits
Use Tables USL&HW III-M-C (Male) and USL&HW IV-B
Type – USL&HW-Trauma
Claimant’s Birth Date – 05/01/66
Average Weekly Wage – $500
Spouse’s Birth Date – 07/01/68
Date of Accident – 02/01/14
Date of Valuation – 01/01/15
Effective Date – 07/01/13
Claimants Age at Valuation – 49 (sex – M)
Maximum Benefit – 200% NAWW = $1,325.18
Spouse’s Age at Valuation – 47
Present Value of Future Payments
Claimants – .6667 x ($500) = $333.35 wk
Present Value of $1 = 32.459
Future Payments – $333.35 x 32.459 x 52 = $562,651
Survivorship Benefits – .5 x ($500) = $250
Present Value of Benefits = 9.942
Future Payout = 250 x 9.942 x 52 = $129,246
Indemnity to Valuation Date Benefits Paid from 02/01/14 to 01/01/15 – 334 days / 7 = 47.714 Wks $333.35 x 47.714 = $15,905
10aExample 11 – Correction of Header Information Only
In the following example the only information that needs correcting is the policy number. Since the policy number field has two lines, the previous reported policy number (incorrect number) goes on the first line and the revised policy number (correct number) goes on the second line.
If a header field needs to be corrected and the field only has one line, report the revised information only.
When reporting a header correction only the Report Number, Correction Number, Correction Type, Carrier Code, Policy Number, Policy Effective Date, Exposure State and Insured’s Name need to be filled in, along with any other policy information that is changing.
11Example 12 – Correction of Loss Totals Only
In the following example the only information that needs correcting is the loss totals. Because there is only one line per field for the loss totals, only the revised totals are shown. The key policy information must also be shown (Report Number, Correction Number, Correction Type, Carrier Code, Policy Number, Policy Effective Date, Exposure State and Insured’s Name)
Note: The exposure, premium and loss totals must all be provided when submitting 1st level total corrections.
12Example 13 – Correction of Old Form Information on New Form
The following example shows the information reported on the old form prior to the adoption of the ASWG form.
Refer to Example 13a showing the correction on the ASWG form.
13Example 13a – Correction of Old Form Information on New Form
The following example is a correction of exposure and loss information on the ASWG form. Please note that only the information that was reported on the original unit is transferred to the new form (new fields do not need to be filled in).
Also note the claim 56789 is being added as a new claim, therefore there is an Update Type “P” with all fields left blank because there was no previously reported information. Update Type “R” has all the new claim information.
13aExample 14 – First Report Requiring an ICR, Widow with 2 Children
Claim 68235 is a death claim.
Refer to Example 14a for the Individual Case Report with a Widow and 2 Children.
14Example 14a – Individual Case Report; Death Claim, Widow with 2 Children
Use Table I-A & Table II-A
Type – State Act-Trauma
Widow’s Date of Birth – 09/01/74
Average Weekly Wage – $395
Age at Widowhood – 39
Effective Date – 07/01/13
Age at Valuation – 40
Date at Valuation – 01/01/15
1st Level Report – Open
Date of Accident – 11/01/13
Date of Death – 11/01/13
Present Value of Future Payments
- Widow’s Benefit plus child #1 BenefitsWeekly Benefit = .6667 x ($395) = $263.35
Present Value of $1 = 18.261 – Widowhood at age 39, ª[x] + 1 Value$263.35 x 52 x 18.261 = $250,070
- Child #2 Benefits – Payable until child is 18 years old.Weekly Benefit = .0333 x ($395) = $13.15
No. of Weeks Payable = 01/01/15 to 12/01/15 + 334 days / 7 = 47.714 wks.$13.15 x 47.714 = $627
- Remarriage DowryWeekly Benefit – $263.35
Present Value of Remarriage Dowry = .1648No. of Weeks Payable = 104 weeks
Value of Payments = $263.35 x 104 x .1648 = $4,514
- Indemnity Paid to Valuation DateWeekly Benefit = .70 x ($395) = $276.50
No. of Weeks Payable = 11/01/13 to 01/01/15 – 426 days / 7 = 60.857 Wks$276.50 x 60.857 = $16,827
- Funeral Allowance = $3,500
Example 15 – Merit Rating
Merit rating adjustments are applicable below line C and are calculated as a percentage of the earned premium. Each insured who does not qualify for an experience mod is reviewed to determine if a merit rating adjustment applies.
There are three types of merit rating adjustments based upon an insured’s occurrence of lost time (indemnity) losses: Code 9884 (no credit/no debit), Code 9885 (5% credit), Code 9886 (5% debit).
15Example 16 – Assigned Risk Surcharge
Assigned risk surcharges are applicable below Line C and are calculated as a percentage after the application of any schedule rating debit/credit. See Algorithm Section X for specific premium calculation sequence.
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