Approval of Pcrb Filing No. 311 Temporary Staffing Loss Cost Filing – Effective April 1, 2021
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August 13, 2020 PCRB CIRCULAR NO. 1744 To All Members of the PCRB: Re: APPROVAL OF PCRB FILING NO. 311 TEMPORARY STAFFING LOSS COST FILING – EFFECTIVE APRIL 1, 2021 The Pennsylvania Insurance Commissioner has approved PCRB Filing No. 311, which implements a revised methodology to calculate workers compensation loss costs and other rating values for all temporary staffing risks in Pennsylvania for policies effective 12:01 a.m., April 1, 2021 or later. The effective date of this revision aligns with the proposed effective date of the PCRB’s normal annual comprehensive loss cost revision filing, which will be filed with the Commissioner at a later date. This coordination will consolidate necessary changes that our members and other constituents must make to policies, forms and systems. Temporary staffing class codes are fully defined in the Pennsylvania Basic Manual (Manual); however they are essentially temporary staffing contractors that hire employees and assign those employees to an unrelated business for temporary work assignments varying in duration. Temporary staffing risks are not to be confused with Professional Employer Organizations (PEOs), which are defined under Rule XVIII in the Manual. The approved filing eliminates the current 37 temporary staffing class codes and creates 296 new temporary staffing class codes with each direct employment class mapping to one and only one temporary staffing class. Classifications are listed numerically in Section 2 (Classifications) of the Manual. The numeric assignment for a temporary staffing classification is a one-to-one match with a direct employment classification. Temporary staffing classifications are identified by a four-digit number that is 2,000 greater than the associated direct employment classification. For example, for direct employment classification 323, the corresponding temporary staffing classification is 2323. The modified methodology calculates loss costs for temporary staffing risks by applying factors to the associated direct employment class loss costs. The loss costs for the temporary staffing codes were calculated on a revenue-neutral basis relative to the temporary staffing loss costs approved in the April 1, 2020 annual loss cost filing. The primary reason for this change is to improve the overall consistency and accuracy of the loss costs between the direct employment class codes and the associated temporary staffing class codes. As temporary staffing data has been continually collected and monitored over the years, the experience has indicated that there is a meaningful and consistent difference between these exposures. The revised approach creates individual temporary staffing class codes to allow the experience of each temporary staffing class to be more directly considered when calculating their loss costs. PCRB Circular No. 1744 Page 2 For some historical information on Pennsylvania temporary staffing and the current methodology, you may also refer to the PCRB Filing No. 240 dated July 14, 2010 (pages 57- 69), available on the PCRB’s website (www.pcrb.com) under the “Filings” link. Changes to the Manual, as a result of this filing approval, are summarized below: Section 1 Underwriting Rules, Rule IV.B. Classifications: this has been amended to include clarifying language to further explain the difference between direct and temporary classifications. Also, rules related to subclassifications have been repositioned into this section so all the possible types of classifications can be presented together and in logical sequence. Section 1 Underwriting Rules, Rule IX.H.1 Pennsylvania Construction Classification Premium Adjustment Program (PCCPAP): this has been amended to include the temporary staffing construction classes (the 26xx codes) that are eligible for a PCCPAP credit. Section 2 Classifications: this has been amended to remove the previous classification titles and descriptions for temporary classifications. Additionally, for ease of reading, in the Underwriting Guide section has been expanded and the equivalent temporary classification code has been added to the listing of employer operations. The Manual changes associated with this Circular are provided below. The Manual changes will be updated on the PCRB’s website at a later date. For further reference on this filing, refer to the “Filings” link, to Filing No. 311 for the details and information on this revision. Please direct all questions to Brent Otto, Vice President of Actuarial Services and Chief Actuary, at [email protected] or to Kenneth Creighton, Director of Actuarial Services, at [email protected] for any questions regarding this Circular. Questions regarding the Manual should be directed to Delisa Fairley, Vice President of Underwriting Services, at [email protected]. William V. Taylor President dn Attachment Remember to visit our website at www.pcrb.com for more information about this and other topics. DIRECT EMPLOYMENT LOSS COSTS AND EXPECTED LOSS FACTORS FOR PENNSYLVANIA WORKERS COMPENSATION INSURANCE Proposed Effective Date: April 1, 2021 on New and Renewal Business EXPERIENCE RATING PLAN HAZARD CODE LOSS EXPECTED LOSS FACTORS TABLE * GROUP NO COST A-1 A-2 A-3 A - G 005 6.92 5.07 6.57 7.39 F 007 3.26 2.39 3.10 3.48 C 009 11.72 8.58 11.11 12.51 G 015 5.62 4.11 5.33 5.99 E 025 2.51 1.60 2.07 2.27 G 028 1.49 0.95 1.23 1.34 F 050 2.40 1.53 1.98 2.17 F 051 2.43 1.54 2.00 2.19 F 055 2.84 1.80 2.33 2.56 F 059 3.62 2.30 2.98 3.26 E 101 1.89 1.32 1.67 1.91 E 103 0.79 0.55 0.70 0.80 C 104 2.13 1.49 1.89 2.16 B 105 2.38 1.67 2.12 2.42 D 106 3.59 2.51 3.19 3.64 C 107 1.69 1.18 1.50 1.72 B 108 1.53 1.07 1.36 1.55 C 109 2.42 1.69 2.15 2.46 C 110 1.74 1.22 1.55 1.77 B 111 4.35 3.04 3.86 4.41 C 112 4.93 3.44 4.37 5.00 C 113 1.19 0.83 1.05 1.20 C 114 3.62 2.53 3.21 3.67 E 115 1.54 1.08 1.37 1.56 D 119 2.11 1.47 1.87 2.14 C 130 3.07 2.15 2.73 3.12 E 132 1.72 1.20 1.53 1.75 C 134 1.91 1.33 1.69 1.93 C 135 1.51 1.06 1.34 1.53 C 136 1.75 1.23 1.56 1.78 C 139 2.57 1.80 2.29 2.61 C 141 2.73 1.91 2.42 2.77 B 142 1.41 0.98 1.25 1.43 C 161 1.33 0.93 1.18 1.35 C 163 2.40 1.68 2.13 2.44 C * Table A-1 applies to the most current policy year, Table A-2 to the first prior policy year, and Table A-3 to the second prior policy year. DIRECT EMPLOYMENT LOSS COSTS AND EXPECTED LOSS FACTORS FOR PENNSYLVANIA WORKERS COMPENSATION INSURANCE Proposed Effective Date: April 1, 2021 on New and Renewal Business EXPERIENCE RATING PLAN HAZARD CODE LOSS EXPECTED LOSS FACTORS TABLE * GROUP NO COST A-1 A-2 A-3 A - G 165 3.73 2.61 3.31 3.79 B 166 1.91 1.33 1.69 1.93 C 201 2.43 1.70 2.16 2.47 D 204 1.87 1.30 1.66 1.89 B 205 1.75 1.23 1.56 1.78 B 221 1.29 0.90 1.14 1.31 C 222 1.52 1.06 1.35 1.54 C 225 1.60 1.12 1.42 1.63 C 227 1.96 1.37 1.74 1.99 C 255 1.48 1.03 1.31 1.50 E 257 1.53 1.07 1.36 1.55 C 261 1.79 1.25 1.59 1.82 C 263 1.20 0.84 1.06 1.21 C 265 1.49 1.04 1.32 1.51 C 281 1.48 1.03 1.31 1.50 B 282 3.11 2.18 2.76 3.16 D 285 1.18 0.82 1.04 1.19 B 301 3.49 2.44 3.10 3.54 F 305 2.62 1.83 2.32 2.65 D 306 2.09 1.46 1.85 2.12 B 311 1.75 1.23 1.56 1.78 C 319 2.53 1.77 2.25 2.57 A 323 2.08 1.45 1.85 2.11 C 327 1.52 1.06 1.35 1.54 C 402 2.16 1.51 1.92 2.19 E 403 1.72 1.20 1.53 1.75 C 404 1.67 1.17 1.49 1.70 E 406 1.81 1.27 1.61 1.84 E 407 1.99 1.39 1.76 2.02 C 411 2.82 1.97 2.50 2.86 E 413 3.02 2.11 2.68 3.07 E 415 1.94 1.35 1.72 1.96 E 416 1.25 0.87 1.11 1.27 C 421 4.25 2.97 3.77 4.31 E 425 4.37 3.05 3.88 4.43 E * Table A-1 applies to the most current policy year, Table A-2 to the first prior policy year, and Table A-3 to the second prior policy year. DIRECT EMPLOYMENT LOSS COSTS AND EXPECTED LOSS FACTORS FOR PENNSYLVANIA WORKERS COMPENSATION INSURANCE Proposed Effective Date: April 1, 2021 on New and Renewal Business EXPERIENCE RATING PLAN HAZARD CODE LOSS EXPECTED LOSS FACTORS TABLE * GROUP NO COST A-1 A-2 A-3 A - G 427 2.65 1.85 2.35 2.68 E 429 2.16 1.51 1.92 2.19 D 431 3.12 2.18 2.77 3.17 C 433 2.12 1.48 1.88 2.15 C 435 2.14 1.50 1.90 2.17 C 441 0.67 0.47 0.59 0.68 C 445 1.21 a 0.84 1.07 1.22 C 446 0.72 0.50 0.64 0.73 B 447 2.33 b 1.63 2.07 2.37 E 449 1.32 0.92 1.17 1.34 D 451 2.09 1.46 1.85 2.12 D 454 1.73 1.21 1.54 1.76 C 456 1.89 1.32 1.67 1.91 D 457 1.93 1.35 1.71 1.95 C 458 1.00 0.70 0.89 1.02 B 459 0.50 0.35 0.44 0.50 C 461 1.44 1.01 1.28 1.46 D 463 1.61 1.13 1.43 1.64 D 465 1.92 1.34 1.70 1.94 D 467 2.29 1.60 2.03 2.32 B 471 0.77 0.54 0.68 0.78 B 472 0.58 0.40 0.51 0.59 B 473 1.36 0.95 1.21 1.38 B 474 1.21 0.84 1.07 1.22 C 475 1.30 0.91 1.15 1.32 D 476 0.67 0.47 0.59 0.68 C 477 1.05 0.74 0.94 1.07 C 483 0.91 0.64 0.81 0.93 B 485 0.66 0.46 0.59 0.67 B 486 0.77 0.54 0.68 0.78 C 487 0.61 0.43 0.54 0.62 C 488 0.45 0.31 0.40 0.45 B 489 0.68 0.47 0.60 0.69 B 501 2.46 1.72 2.19 2.50 E 502 2.00 1.40 1.77 2.03 A * Table A-1 applies to the most current policy year, Table A-2 to the first prior policy year, and Table A-3 to the second prior policy year.