The experience rating plan filed by the designated advisory
organization shall provide for the submission of corrected incurred loss
reports for the purpose of recalculating the employer's experience modification
factor. If the correction results in a decrease, it shall apply retroactively
to the current policy from its date of inception and to all affected policies
in force at any time during the two-year period preceding the current policy's
effective date, or such longer period as may be specified in the plan. Valid
reasons for filing a corrected loss report must include, at a minimum:
A.
Erroneous information.
If the original loss report did not accurately report the insurer's paid loss
and reserve, or if the employer can demonstrate that the information used by
the insurer in paying a loss or estimating an incurred loss was incorrect and
that the insurer knew or should have known at the time of the payment date or
required valuation date that the information was incorrect.
B.
Third-party recovery. If
the insurer receives a payment in satisfaction or compromise of a claim against
a third party arising out of the same occurrence as a claim against the
employer, the amount of the recovery, net of reasonable equitably apportioned
litigation costs, shall be deducted from the incurred loss to the extent that
the anticipated recovery was not previously recognized in calculating the
incurred loss. For revisions made under this Subsection, the minimum required
period of retroactivity for corrections shall be extended from two years to
four years preceding the current policy's effective date.
C.
Change in governing
classification. When an employer's operations are reclassified and the
reclassification is not based on a change in operations, the employer's
experience modification factor shall be recalculated, effective the same day as
the reclassification becomes effective, on the basis of expected loss figures
for the experience period that are consistent with the new
classification.
