WC CIRCULARS 2004

______________________________________________________________

WC/1/2004                                     Date : 27-07-2004

Re:- Approval of Special Rating under the Workmen's Compensation Tariff

The Tariff Advisory Committee has revised the Special Rating Rules appearing on sheet No.10 of the Workmen's Compensation Tariff and has modified Tariff Regulation No.23 to read as under :

Rules for Special Rating

A risk or an individual contract for which a separate insurance is required, shall be eligible for Special Rating subject to the following rules :

1. Eligibility

A. Minimum estimated annual wages : Rs.5,00,000/-.

In respect of existing especially rated cases, the eligibility amount shall continue to be Rs.50,000/- until the claims ratio as computed under Rule 1(c) below is 35% or less. The risk shall not qualify for special rating once the claims ratio exceeds 35%. Thereafter, the eligibility amount to qualify again for special rating shall be Rs.5,00,000/-.

B. Risks should have generated premium and claim statistics for a minimum of 5 policy periods of not less than 4 years, immediately preceding the expiring policy period.

C. The claims ratio calculation as under for the said 5 policy periods immediately preceding the expiring policy period shall be 35% or less.

        Total Claims

Claims Ratio = --------------------- X 100

                                                                Premium

• Total claims for a given year shall mean claims paid during the policy period plus claims outstanding at the end of the policy period less the claims outstanding at the beginning of the policy period.

• Premium shall mean the premium actually received by the insurer and shall not include service tax.

  N.B.: The word 'risk' used above will mean one proprietorship/entity. However, it is not permissible to combine the wages of two or more works or premises falling under the same proprietorship/entity, unless such works or premises are carrying on the same trades or processes ancillary to such trades.

  2. Approval

  Corporate Offices of Insurers are authorised to approve Special Rates. For this purpose, relevant data shall be maintained as per the enclosed Information Sheet.

  3. Validity Period

  The validity period of the Special Rates shall coincide with the policy period.

  4. Discounts

  Subject to the Claims Ratio for the 5 policy periods as prescribed under Item 1 above, discounts on tariff rates shall be granted as follows :

  Claims Ratio	Discount not exceeding
  Not Exceeding 5%	50%
  Exceeding 5% but Not Exceeding 15%	40%
  Exceeding 15% but Not Exceeding 30%	30%
  Exceeding 30% but Not Exceeding 35%	20%

  5. Miscellaneous

  In case the annual wages declared at the beginning of the policy period turn out to be less than Rs.5 lakhs at the expiry of the policy period, the insurer shall be required to recover the discount granted by way of special rating within 3 months of the policy expiry date.

  In the event of the insured, transferring his insurance from one insurer to another insurer, the transferee insurer may allow special rate on renewal as per norms. Evidence of the insured's special rating entitlement either in the form of renewal notice or letter confirming the special rating entitlement from the previous insurer will be required for this purpose.

  Where the insured is unable to produce such evidence of special rating entitlement from the previous insurer, special rate as per the norms outlined above, may be permitted after obtaining from the insured a declaration as per the following wording and after the insurer satisfies himself about the eligibility :

  "I/We declare that the premium and the claims data furnished by me/us are correct for the previous policy periods (copies of the policies enclosed.) I/We further undertake that if this declaration is found to be incorrect, all benefits under the policy will stand forfeited".

  Notwithstanding the above declaration, the insurer allowing the special rating will be obliged to write to the policy issuing office of the previous insurer by recorded delivery calling for confirmation of the entitlement and details of special rating of the insured and the previous insurer shall be obliged to provide the information sought within 30 days of receipt of the letter of enquiry, failing which the matter will be treated as a breach of tariff on the part of the previous insurer. Failure of the insurer granting the special rating to write to the previous insurer within 21 days after granting the cover will also constitute a breach of tariff.

  6. Clarification

  For any clarification in respect of these rules, Corporate Office of insurer shall make reference to the TAC, Head Office.

  In view of the above, applications if any, pending with the Regional Offices of the TAC shall be returned to the corporate office of the respective insurers, if required by them.

Insurers are requested to take note of the above and advise their operating offices suitably.

Secretary

Encl : Information sheet for special rating

ANNEXURE

WORKMEN'S COMPENSATION TARIFF

INFORMATION SHEET FOR SPECIAL RATING

( See Special Rating Rules )

Commencement or Renewal Date of Policy-----------------------------

1. Full Name of Employer/Insured _____________________________________________________________________

2. Address or Addresses at which the Business is carried on _________________________________________________

3. Full description of the work carried on for which Special Rating is required

_______________________________________________________________________________________________

4. Full address/addresses of locations of above work

_______________________________________________________________________________________________

5. The type of cover _________________________________________________________________________________

6. Address of Insurer's Operating Office _________________________________________________________________

7. (A) Has the risk been previously insured and if yes, with which Insurer ?

(i) Previous insurance history a) Name of the Insurer ______________________________________

b) Policy period ______________________________________

(B) Details of previous Special Rating Application : _________________________________________________

________________________________________________________________________________________________

PARTICULARS OF EMPLOYEES			Book Rates Rs. Per mille	Classification No.	Book Rates Rs. Per mille	Classification No.
Description of occupation	Estimated Number of Employees	Estimated total annual wages, salaries and other earnings
(a) Clerical Staff		Rs.	(a) (b) (c) (d) (e)		(f) (g) (h) (i)
(b) Commercial Travellers		Rs.	EXISTING SPECIAL RATES (If any) (a) (f) (b) (g) (c) (h) (d) (i) (e) Date when above Special Rates fixed :
(c) Common Law Liability only		Rs.
(d) Employees engaged with woodworking machinery Specify other main classes of Employees (e) (f) (g) (h) (i) If Sub-contractors are to be included, state amount of Contracts and nature of work		Rs.
Total	0	Rs.

SUGGESTED SPECIAL RATES

(a) (f)

(b) (g)

(c) (h)

(d) (i)

(e)

INFORMATION SHEET FOR SPECIAL RATING (Contd.)

 

CLAIMS

FATALS

PERMANENT DISABLEMENT

TEMPORARY DISABLEMENT

Policy period

Number

O/s at the Begining

Paid during the period

O/s at the end.

Total Claims

O/s at the Begining

Paid during the period

O/s at the end.

Total Claims

O/s at the Begining

Paid during the period

O/s at the end.

Total Claims

(Rs.)

(Rs.)

(Rs.)

(Rs.) (D1)

(Rs.)

(Rs.)

(Rs.)

(Rs.) (D2)

(Rs.)

(Rs.)

(Rs.)

(Rs.) (D3)

(A1)

(A2)

(A3)

(D1=A2+A3-A1)

(B1)

(B2)

(B3)

D2=B2+B3-B1)

(C1)

(C2)

(C3)

D3=C2+C3-C1)

Total

PREMIUM

 

Policy Period	Premium Received (Rs.)
Total

                                    TOTAL CLAIMS (D1+D2+D3)

CLAIMS RATIO = ---------------------------------------- X 100

                                    TOTAL PREMIUM RECEIVED

PARTICULARS OF ALL OUTSTANDING CLAIMS

WC/2/2004                                                                                             Date 01-12-2004

It has been decided to replace the existing tariff entry relating to "Radium" appearing on sheet No. 50 of the Workmen’s Compensation Tariff by a revised entry as under:

Sheet No. 50 :

Consequently, the N.B. under the tariff entry ‘Hospitals’ on sheet No. 39 of W.C. Tariff shall also stand revised as under:

Insurers are requested to take note of the above and advise their operating offices suitably.

Secretary

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