What it does
WC 00 04 12 (Ed. 1-90) states that the premium will be adjusted by the factor in its Schedule, which is a Contingent Experience Rating Modification Factor based on the experience data available, and that it replaces any prior factor. The insurer will endorse a revised factor if appropriate additional data becomes available; the contingent factor applies unless a revised factor is issued.
Who needs it
Accounts whose bureau modification was issued as contingent, typically because a prior carrier's unit statistical data was missing or late. North Carolina's bureau instructions note the carrier may make an Information Page entry instead of attaching the form.
Key provisions
- Unlike WC 00 04 03 (no factor yet), this form puts a real factor on the policy now, subject to later revision.
- When revised data arrives, the new factor is applied by endorsement and premium is recalculated.
Quoting and selling notes
- Find out which policy period's data is missing and push the prior carrier to report it. A contingent factor can be higher than the final one when favorable data is absent.
- Explain to the insured that premium may change mid-term or at audit when the final factor is issued.
Related forms
Experience modification WC 00 04 03; revision WC 00 04 25.
