Posted: 9/10/2012

Division of Insurance Workers' Compensation Information Request on Capped, Uncapped Payroll

The Nevada Division of Insurance has requested that insurers that write workers' compensation insurance in Nevada respond to the following information request no later than Oct. 5, 2012.

For the purpose of rating workers' compensation premium, Nevada employer payroll is capped at $36,000 per employee per policy year. Currently, the National Council on Compensation Insurance, Inc. collects only capped payroll for Nevada exposures. The Nevada Division of Insurance has been exploring whether it is feasible to also collect uncapped payroll.

Collecting both capped and uncapped payroll would facilitate an analysis of the impact of changing or removing the payroll cap and would permit class rates to be appropriately adjusted in the event the payroll cap is ultimately changed or removed. Note that changing or eliminating the payroll cap would require legislation. To the best of our knowledge, no such legislation is in the pipeline.

The DOI would like your company's opinion as to the feasibility of having insurers report both capped and uncapped payroll to the NCCI. Please respond to the following questions:

• Does the insurer currently collect both capped and uncapped payroll for its Nevada exposures? If so, does it do so at the time of application/renewal, at audit, or at both times?
• If not, do the company's premium auditors, in the course of their audits, collect both capped and uncapped payroll for the Nevada exposures?
• Please indicate whether the insurer would be willing to collect both capped and uncapped payroll at the time of application/renewal, at audit, or at both times.
• If you do not currently collect both capped and uncapped payroll, please indicate how long, in months, you estimate that it will take your company to update its systems and procedures to collect both capped and uncapped payroll.

If you have any questions, please contact Elena Ahrens, Acting Chief, Property & Casualty Section Nevada Division of Insurance, at eahrens@doi.nv.gov or by phone at (775) 687-0764.

Contact:
Christian J. Rataj
State Affairs Manager
crataj@namic.org
303.907.0587