02-031 C.M.R. ch. 450, § 3 - Effective Date of Experience Modification Factor

A. Experience modification increase; policy effective date. An insurer shall not implement an increase in the experience modification factor after the effective date of the policy unless the policy (including any applicable endorsements) clearly specifies the terms under which the employer's experience rating may be subject to change.

B. Limitation. An insurer shall not implement an increase in the experience modification factor more than 90 days after the policy effective date. An insurer or advisory organization may appeal to the Superintendent for an extension of the 90-day limitation period if there are unusual circumstances which legitimately delay the availability of the experience modification factor. This Subsection does not apply to the periodic recalculation of the policyholder's experience modification factor, in accordance with the terms of the approved experience rating plan, if the policyholder has been notified in writing at or before the time the policy is issued or renewed that the effective date of the experience modification factor is different from the effective date of the policy.

C. Modification resulting in premium reduction. Any change in the experience modification factor that results in a premium reduction shall not be subject to the restrictions in Subsections A and B above, and shall apply retroactively to the entire policy period to the extent affected by the erroneous experience modification factor.

D. Lack of employer cooperation. The restrictions in Subsections A and B above shall not apply if the designated advisory organization is unable to calculate the modification factor for an employer solely because the employer has failed to cooperate in an audit affecting the modification calculation or solely due to the fault of the employer or an agent of the employer.

E. Changes in rating basis. This Section does not apply to changes in experience modification factors resulting from a change in the governing classification of a business or from a change in ownership or other transaction subject to Section7.

Notes

02-031 C.M.R. ch. 450, § 3