1. Forms
  2. WC
  3. WC-00-05-03

What it does

WC 00 05 03 D (Ed. 1-19) is added to Part Five because the insured chose a retrospective rating plan. For a one-year rating plan period, the retrospective premium for this policy and any listed policies is calculated from five standard elements and up to two elective ones:

  • Standard premium: what guaranteed-cost premium would have been, excluding premium discount, expense constant, nonratable elements, federal mine act occupational disease premium and catastrophe-provision premium.
  • Basic premium: standard premium times a basic premium factor covering carrier administration, loss control and the net aggregate loss charge, shown in the Schedule for a range of standard premium sizes.
  • Incurred losses: paid and reserved losses, interest on judgments, recovery expenses and employers liability loss adjustment expense (plus allocated loss adjustment expense if that option is elected).
  • Converted losses: incurred losses times the loss conversion factor.
  • Taxes: a tax multiplier applied by state.
  • Elective: a per-accident and per-disease loss limitation with an excess loss premium, and a retrospective development premium.

Key provisions

The Schedule shows the loss limitation, loss conversion factor, minimum and maximum retrospective premium factors, and basic premium factors at 50%, 100% and 150% of estimated standard premium. Other policies combined in the plan are endorsed with the short form (WC 00 05 11). Related editions cover three-year plans (WC 00 05 04), wrap-up construction projects (WC 00 05 05) and multiple-line plans (WC 00 05 12 to 00 05 14).

Quoting and selling notes

  • Premium is recalculated after expiration as incurred losses develop, so the insured must be able to absorb later adjustments; with WC 00 04 19 attached, they are due when billed.
  • Premium subject to retrospective rating does not receive premium discount.
  • Negotiate minimum and maximum factors, the loss limitation and whether ALAE is included; these set the range of outcomes.

Related forms

Premium discount WC 00 04 06; premium due date WC 00 04 19; benefits deductible WC 00 06 03.