Workers' compensation classifications in New York State are assigned in accord with the rules of the Compensation Insurance Rating Board (CIRB). Subject to certain exceptions, it is the basic business of the policyholder which is classified rather than the various occupations of individual workers.
The wording of the basic or 'governing' classification describes the general type of business insured under the policy. In cases where there is no existing classification which describes the business, the wording of the assigned classification will describe a type of business which is considered to have similar workers' compensation exposure.
Payroll is the most common form of remuneration and the basis upon which most workers’ compensation premiums are based. Remuneration consists of gross wages, or other compensation, before withholding taxes or other deductions. The specifics of what constitutes remuneration can be found on our website under components of workers’ compensation premium.
The rate for each classification code is determined by the
NY Compensation Insurance Rating Board computing the portion of the loss cost relating to losses. Each individual insurer applies its own expense factor (a loss cost multiplier) to the applicable loss cost to determine the complete rate.
Where the loss cost for a given classification is based on payroll exposure, the SIF manual rate premium is computed by multiplying the estimated annual payroll by the rate (expressed in dollars and cents per $100 per payroll), which is arrived at by multiplying the approved loss cost by the SIF loss cost multiplier and dividing the result by 100.
The Experience Rating Plan recognizes that similar employers may not be similar with respect to safety and losses. The Experience Rating Plan adjusts for those differences by modifying the overall premium paid by the employer. The Experience Rating Plan is administered by the New York Compensation Insurance Rating Board (NYCIRB), which promulgates an experience modification for all qualified employers. The experience modification is determined by comparing an employer’s actual losses to the expected losses for an employer of similar size in the same industry. This statistical comparison results in the calculation of the experience modification, which is a percentage credit or debit applied to the employer's manual premium.
The Expense Constant is a premium charge which applies to every policy. It covers expenses such as those for issuing, recording and auditing, which are common to all workers compensation policies regardless of premium size.
Changes to endorsements regarding the Terrorism Risk Insurance Program Reauthorization Act (TRIPRA) have been approved by the New York State Insurance Department. These endorsement form changes are effective for policy effective dates on and after September 1, 2008.
This charge derives from charging premium to cover the losses that may occur in the event of a Catastrophe (other than Certified Acts of Terrorism) as defined: any single event, resulting from an earthquake, noncertified act of terrorism, or catastrophic industrial accident, which results in aggregate workers' compensation losses in excess of $50 million. Your policy provides coverage for workers' compensation losses caused by a Catastrophe (other than Certified Acts of Terrorism).
NYSIF may apply its own modification of rates by means of a surcharge (differential) or credit (discount), in an attempt to tailor the workers’ compensation premium to suit the individual character of each employer. NYSIF’s modification of rates may be based upon criteria such as: your prior loss experience; your prior premium payment history; the nature and hazards of your business; adherence to safe practices in the workplace; and compliance with all obligations imposed upon you by the Workers’ Compensation Law, including cooperation on claims matters and premium audits.
The New York Compensation Insurance Rating Board (NYCIRB) determines the assessment percentage and may change each time there is a general rate revision. This charge covers the costs of operating the Workers’ Compensation Board and special funds such as the Reopened Case Fund, Special Disability Fund and the Special Funds Conservation Committee, as prescribed by law. Effective October 1, 2008, the assessment charge is 5.5% for workers' compensation policies.