BEFORE THE STATE COMPENSATION INSURANCE FUND
OF THE STATE OF MONTANA
In the matter of the amendment of ARM 2.55.320 and 2.55.502, pertaining to classifications of employments and the individual loss sensitive dividend distribution plan
NOTICE OF PROPOSED AMENDMENT
NO PUBLIC HEARING CONTEMPLATED
TO: All Concerned Persons
1. On January 31, 2014, the Montana State Fund proposes to amend the above-stated rules.
2. The Montana State Fund will make reasonable accommodations for persons with disabilities who wish to participate in the rulemaking process and need an alternative accessible format of this notice. If you require an accommodation, contact the Montana State Fund no later than 5:00 p.m. on December 20, 2013, to advise us of the nature of the accommodation that you need. Please contact Nancy Butler, Montana State Fund, P.O. Box 4759, 855 Front Street, Helena, Montana 59604-4759; telephone (406) 495-5138; fax (406) 495-5023; or e-mail email@example.com.
3. The rules proposed to be amended provide as follows, deleted matter interlined, new matter underlined:
2.55.320 METHOD FOR ASSIGNMENT OF CLASSIFICATIONS OF EMPLOYMENTS (1) and (2) remain the same.
(3) The State Fund staff shall assign its insureds to classifications contained in the classifications section of the State Compensation Insurance Fund Policy Services Underwriting Manual effective July 1,
2012 2013, and assign new or changed classifications as approved by the board. That section of the manual is incorporated by reference. Copies of the classification section of the manual may be obtained from the Insurance Operations Support Department of the State Fund, 855 Front Street, P.O. Box 4759, Helena, Montana 59604-4759.
AUTH: 39-71-2315, 39-71-2316, MCA
IMP: 39-71-2311, 39-71-2316, MCA
REASON: This amendment to ARM 2.55.320 is reasonably necessary at this time to reflect the updates to the State Fund's Underwriting Manual (manual), effective July 1, 2013.
Under 39-71-2316(1)(e), MCA, after rules have been adopted, the State Fund is not subject to the rulemaking provisions of the Montana Administrative Procedure Act when changing classifications and premium rates.
The underwriting manual is used by State Fund staff in their usual duties of assigning classifications to insured employers of the State Fund. Each of these classifications has a premium rate that is adopted by the State Fund board in accordance with the board's ratemaking authority. This amendment is made each year to adopt the current version of the manual, which includes new rates, values, and classification code updates effective July 1, 2013. The classification code updates may be those adopted by the Classification Review Committee established in Title 33, chapter 16, MCA, or by the State Fund board of directors. The entire underwriting manual is available on State Fund's web site at www.montanastatefund.com.
2.55.502 INDIVIDUAL LOSS SENSITIVE DIVIDEND DISTRIBUTION PLAN
(1) through (7) remain the same.
(8) A dividend will be issued as a warrant to a policyholder, unless (8)(a) through (8)(c) exist. The dividend will be applied to the account, unless an exception is made by the board of directors for a warrant to be issued, if the following situations exist:
the a current policy is pending forced cancellation for nonpayment of premium has a past-due premium or other debt pending;
(b) a canceled policy with an existing
debt obligation owed the State Fund, including a past-due premium or an outstanding payroll report; or
(c) a current policy when the dividend amount is above the minimum amount established pursuant to (7) but below an amount as established by the board.
(9) and (10) remain the same.
AUTH: 39-71-2315, 39-71-2323, MCA
IMP: 39-71-2323, MCA
REASON: This amendment to ARM 2.55.502 is reasonably necessary at this time to more accurately and completely reflect when a policy dividend should be applied to a policy, rather than paid out to the policyholder. Subsection (8)(a) concerns a policy that is in force and has an outstanding sum of money owing State Fund. This may be due to a past-due premium payment or a past-due promissory note payment given by a policyholder for a past-due premium. Subsection (8)(b) concerns a canceled policy, which may have not only unpaid premium amounts, but also outstanding payroll reports or audits that are required for a final premium calculation. In the past, State Fund was not readily able to extract and identify from its policy system all canceled policies with outstanding payroll reporting issues for which a dividend should be applied to the account, rather than paid to the policyholder. This system matter has been overcome. The proposed amendment to (8)(c) conforms the rule to State Fund practice and clarifies that a dividend is applied only to current policies when the dividend amount is between the minimum dividend amount and below the level at which a warrant is cut. A canceled policy with no outstanding obligation will receive a warrant.
4. Concerned persons may submit their data, views, or arguments concerning the proposed action in writing to Nancy Butler, Montana State Fund, P.O. Box 4759, 855 Front Street, Helena, Montana 59604-4759; telephone (406) 495-5138; fax (406) 495-5023; or e-mail firstname.lastname@example.org. Any comments must be received no later than 5:00 p.m., December 27, 2013.
5. If persons who are directly affected by the proposed action wish to express their data, views, or arguments, orally or in writing at a public hearing, they must make a written request for a hearing and submit this request along with any written comments to Nancy Butler at the above address no later than 5:00 p.m., December 27, 2013.
6. If the agency receives requests for a public hearing on the proposed action from either 10% or 25, whichever is less, of the persons who are directly affected by the proposed action; from the appropriate administrative rule review committee of the Legislature; from a governmental subdivision or agency; or from an association having not less than 25 members who will be directly affected, a hearing will be held at a later date. Notice of the hearing will be published in the Montana Administrative Register. Ten percent of those persons directly affected has been determined to be 2600 persons based on 26,000 policyholders.
7. The Montana State Fund maintains a list of interested persons who wish to receive notices of rulemaking actions proposed by this agency. Persons who wish to have their name added to the list shall make a written request which includes the name, e-mail, and mailing address of the person and specifies that the person wishes to receive notices regarding the Montana State Fund. If you prefer to receive notices by e-mail, please indicate this in your request. Such written request may be mailed or delivered to Nancy Butler, Montana State Fund, P.O. Box 4759, 855 Front Street, Helena, Montana 59604-4759; faxed to the office at (406) 495-5023; e-mail email@example.com; or may be made by completing a request form at any rules hearing held by the Montana State Fund.
8. An electronic copy of this notice of proposed amendment is available through the Secretary of State's web site at http://sos.mt.gov/ARM/Register. The Secretary of State strives to make the electronic copy of the notice conform to the official version of the notice, as printed in the Montana Administrative Register, but advises all concerned persons that if a discrepancy exists between the official printed text of the notice and the electronic version of the notice, only the official printed text will be considered. In addition, although the Secretary of State works to keep its web site accessible at all times, concerned persons should be aware that the web site may be unavailable during some periods, due to system maintenance or technical problems.
9. The bill sponsor contact requirements of 2-4-302, MCA, do not apply.
10. With regard to the requirements of 2-4-111, MCA, the Montana State Fund has determined that the amendment of the above-referenced rules will not significantly and directly impact small businesses.
/s/ Nancy Butler
Nancy Butler, General Counsel
/s/ Elizabeth Best
Chair of the Board
/s/ Michael P. Manion
Michael P. Manion, Chief Legal Counsel
and Rule Reviewer
Certified to the Secretary of State November 18, 2013.