Questions about FWCJUA Underwriting Practices
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[top] 1. How does the FWCJUA calculate my premium?
Your premium is calculated by assigning a business classification code (or combination of codes) that best describes your business operations. Each code represents a rate per $100 of payroll that is multiplied by your total estimated annual payroll for that code. Other factors may affect the calculation, such as your business’s “experience modification” and applicable tier surcharges.
[top] 2. What is “experience modification”?
An experience modification allows for an adjustment to your organization's premium rate. It reflects your claims history compared to other businesses in your classification. Premiums are adversely affected if losses are worse than average; premiums are positively impacted if the experience is better than average.
[top] 3. Who do I contact if I have questions about my bill?
Our policy administration Service Provider is Travelers, who is available at 1-800-247-7218 to explain your bill, give you a balance, and/or help you with any other billing question you may have.
[top] 4. What if company officers want to exclude themselves from coverage?
Corporate officers of a corporation shall automatically be covered under a FWCJUA policy unless the officer files the proper exemption of coverage form with the Bureau of Compliance. Corporate officers of corporations in the construction industry are permitted to elect exemptions, only if they maintain at least 10 percent stock ownership in the corporation; however, no more than three corporate officers within the corporation are permitted to be exempt. Corporate officers of corporations in non-construction industries are also permitted to elect exemptions; however, without either of the above-referenced restrictions applicable within the construction industry.
[top] 5. Assume an Employer owns a construction business and all of the construction work is done by subcontractors. If the Employer only has one employee who performs clerical work, why does the Employer’s policy have to include a construction code, and why does the Employer have to pay the higher minimum premium for the construction code?
The FWCJUA’s position is consistent with the classification system utilized in Florida. It is the business of the employer within Florida that is classified and not the separate employments, occupations or operations of individual employees within the business. Several reasons for this are:
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A workers’ compensation insurance policy agrees to pay all compensation and other benefits required of the insured by the workers compensation law. Although the injured worker is the beneficiary of the policy, it is the business which is actually insured.
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Workers’ compensation laws hold the employer responsible for compensation benefits to workers injured on the job without any regard to fault. The law places the liability with the employer, and the insurance contract, in consideration of payment of premium, obliges the insurer to pay all compensation-related costs established by law. Because the employer’s liability is covered, employers are classified by the business undertaken rather than by the duties of individual workers.
In summary, a classification system based upon the business of the employer has the advantage of reflecting the liability which has been insured. The FWCJUA minimum premium rule requires that the one basic classification that best describes the business of the employer within Florida appear on the policy. This reflects the general liability that the FWCJUA is insuring. Regardless of whether an employer develops payroll under the one basic classification that best describes its business, a liability associated with the employer’s line of business exists for the FWCJUA. Given that the FWCJUA is to be self-funded, it is reasonable for the FWCJUA to charge employers at a minimum for the liability exposure.
[top] 6. What are an Employer’s payment options?
The advance premium for an Employer shall be at least 50% of the estimated annual premium or $1,000, whichever is greater. An Employer may chose to submit the minimum advance premium required. If so, the remaining balance is billed three (3) months, six (6) months and nine (9) months from the policy inception date.
[top] 7. Will an Employer with an assessable policy be assessed even if it has incurred no losses?
Yes, an Employer with an assessable policy may be assessed regardless of the Employer’s individual performance. Such an Employer shall be required to contribute, on a pro-rata-earned-premium basis, the money necessary to meet any assessment levied, to cover any deficit attributable to the assessable tier. Additionally, such an Employer may be assessed more than once, and any assessment may be made either while the assessable policy is in effect or at any time after the termination, expiration, or cancellation of the assessable policy.
[top] 8. Would a bankruptcy preclude an employer from obtaining coverage with the FWCJUA?
No, as long as the employer is eligible for the coverage. However, the FWCJUA will require a copy of their bankruptcy filing and 100% of the premium must be collected prior to coverage being bound. Acceptable forms of payment are cashier's check, money order, producer check, premium finance check, or a wire transfer from the employer's bank. For Chapter 7, premium will be based on the most recent 4 quarters of payroll from their UCT-6's unless the most recent quarter shows reduced payroll due to downsizing/termination of employees. For Chapter 11, premium will be based on the most recent 4 quarters of payroll from their UCT-6's. If a trustee has been appointed, a copy of the most recent monthly operating report must be provided prior to binding coverage. Monthly reports are due within 5 days of filing with the bankruptcy court.
For more information, please contact our Underwriting Department at 1-941-378-7400 or e-mail underwriting@fwcjua.com. |