§ 515A.7 — Uniform rating plans and deviations

Iowa § 515A.7

• Jurisdiction: Iowa
• Title XIII: COMMERCE
• Ch. 515A: WORKERS’ COMPENSATION LIABILITY INSURANCE RATES

Text

1. a. Every insurer shall adhere to the filings made on its behalf by a rating organization
except that any such insurer may file a deviation from the class rates, schedules, rating
plans, or rules, or a combination thereof for approval by the commissioner. The deviation
filed shall specify the basis for the modification and a copy shall also be sent simultaneously
to such rating organization. In considering the deviation filed, the commissioner shall
give consideration to the available statistics and the principles for rate making as provided
in section 515A.3. The commissioner shall approve the deviation filed for such insurer
if the commissioner finds it to be justified and it shall thereupon become effective. The
commissioner shall disapprove the deviation filed if the commissioner finds that the deviation
does not meet the requirements of this chapter.
b. A deviation may be filed for approval by the commissioner as follows:
(1) An insurer may file for approval by the commissioner of a uniform percentage
rate deviation to be applied to the class rates of the rating organization’s filing subject to
limitations as set forth by the commissioner by rule. A rate deviation from the approved
class rates of a rating organization shall not cause the rate charged a policyholder to exceed
the approved assigned risk rates.
(2) A rating organization or insurer may offer retrospective plans in policies which
generate at least one hundred thousand dollars in annual countrywide premiums on workers’
compensation liability insurance.
(3) An insurer may offer large deductible programs on policies which generate at least
one hundred thousand dollars in annual countrywide premiums on workers’ compensation
liability insurance. The minimum large deductible which may be offered is twenty-five
thousand dollars, which may be applied to indemnity and medical losses.
(4) An insurer may offer small deductible programs with deductibles in a range of up to
ten thousand dollars and which apply only to medical losses. Losses shall be reported on a
net basis in accordance with the statistical plan filed by a rating organization.
(5) An insurer may adopt a schedule rating plan providing for credits or debits in an
amountnotexceedingthemaximummodificationallowedassetforthbythecommissionerby
rule. This amount shall be in addition to the permitted deviations set forth in subparagraphs
(1) through (4).
(6) The commissioner may authorize other types of deviations by rule when there is no
approved rate, schedule, rating plan, or rule applicable to the deviation filed, on file with the
insurance division for a rating organization.
2. The commissioner may adopt rules pursuant to chapter 17A to limit deviations and
maximum schedule or rating plan modifications.
3. All dividends shall be paid based upon loss sensitivity. Dividends are deemed a return
of profit to insureds. Accordingly, dividends shall not be guaranteed by an insurer without
regard to profits. Dividends may be offered in conjunction with deviated rates or with
scheduled rates or in combination therewith. For the purposes of this subsection, “loss
sensitivity” means the profitability of the policyholder individually or as a member of a
homogenous group.

Legislative History

[C50, 54, 58, 62, §515A.7, 515B.7; C66, 71, 73, 75, 77, 79, 81, §515A.7]