Questions about FWCJUA Underwriting Practices

1. How does the FWCJUA calculate my premium?
   
   
2. What is “experience modification”?
   
   
3. Who do I contact if I have questions about my bill?
   
   
4. What if company officers want to exclude themselves from coverage?
   
   
5. Assume an Employer owns a construction business and all of the construction work is done by subcontractors. If the Employer only has one employee who performs clerical work, why does the Employer’s policy have to include a construction code, and why does the Employer have to pay the higher minimum premium for the construction code?
   
   
6. What are an Employer’s payment options?
   
   
7. Will an Employer with an assessable policy be assessed even if it has incurred no losses?
   
   
8. Would a bankruptcy preclude an employer from obtaining coverage with the FWCJUA?

[top] 1. How does the FWCJUA calculate my premium?

Your premium is calculated by assigning a business classification code (or combination of codes) that best describes your business operations. Each code represents a rate per $100 of payroll that is multiplied by your total estimated annual payroll for that code. Other factors may affect the calculation, such as your business’s “experience modification” and applicable tier surcharges.

[top] 2. What is “experience modification”?

An experience modification allows for an adjustment to your organization's premium rate. It reflects your claims history compared to other businesses in your classification. Premiums are adversely affected if losses are worse than average; premiums are positively impacted if the experience is better than average.

[top] 3. Who do I contact if I have questions about my bill?

Our policy administration Service Provider is Travelers, who is available at 1-800-247-7218 to explain your bill, give you a balance, and/or help you with any other billing question you may have.

[top] 4. What if company officers want to exclude themselves from coverage?

Corporate officers of a corporation shall automatically be covered under a FWCJUA policy unless the officer files the proper exemption of coverage form with the Bureau of Compliance.  Corporate officers of corporations in the construction industry are permitted to elect exemptions, only if they maintain at least 10 percent stock ownership in the corporation; however, no more than three corporate officers within the corporation are permitted to be exempt.  Corporate officers of corporations in non-construction industries are also permitted to elect exemptions; however, without either of the above-referenced restrictions applicable within the construction industry.  Partners and sole-proprietors of non-construction industries are automatically excluded from coverage and do not need to file an exempt of coverage form with the Bureau of Compliance.

[top] 5. Assume an Employer owns a construction business and all of the construction work is done by subcontractors. If the Employer only has one employee who performs clerical work, why does the Employer’s policy have to include a construction code, and why does the Employer have to pay the higher minimum premium for the construction code?

The FWCJUA’s position is consistent with the classification system utilized in Florida. It is the business of the employer within Florida that is classified and not the separate employments, occupations or operations of individual employees within the business. Several reasons for this are:

1. A workers’ compensation insurance policy agrees to pay all compensation and other benefits required of the insured by the workers compensation law. Although the injured worker is the beneficiary of the policy, it is the business which is actually insured.

2. Workers’ compensation laws hold the employer responsible for compensation benefits to workers injured on the job without any regard to fault. The law places the liability with the employer, and the insurance contract, in consideration of payment of premium, obliges the insurer to pay all compensation-related costs established by law. Because the employer’s liability is covered, employers are classified by the business undertaken rather than by the duties of individual workers.

In summary, a classification system based upon the business of the employer has the advantage of reflecting the liability which has been insured. The FWCJUA minimum premium rule requires that the one basic classification that best describes the business of the employer within Florida appear on the policy. This reflects the general liability that the FWCJUA is insuring. Regardless of whether an employer develops payroll under the one basic classification that best describes its business, a liability associated with the employer’s line of business exists for the FWCJUA. Given that the FWCJUA is to be self-funded, it is reasonable for the FWCJUA to charge employers at a minimum for the liability exposure.

[top] 6. What are an Employer’s payment options?                          

• Advance Premium:
  The amount of advance premium is dependent upon the total estimated annual premium.  If the total estimated annual premium is less than or equal to $1,000, the amount of advance premium payable shall be equal to the total estimated annual premium.  If the total estimated annual premium exceeds $1,000, the amount of advance premium payable shall be at least 50% of total estimated annual premium, but not less than $1,000.  In addition, payments equal to the remaining balance in three equal payments rounded upward to the nearest dollar are payable three (3) months, six (6) months and nine (9) months from the policy inception.
• Deposit Premium:
  A deposit premium is required to secure or renew coverage in the FWCJUA.  At final audit, the deposit shall be applied to any earned premium due or to the renewal premium (not to the renewal deposit).  A similar deposit shall be required at renewal.  The amount of deposit premium is dependent upon the total estimated annual premium.  If the total estimated annual premium is less than or equal to $4,500, the amount of deposit premium payable shall be equal to 50% of the total estimated annual premium.  If the total estimated annual premium is greater than $4,500, ad deposit premium shall not be required.  However, there are exceptions:  (1)  Any person who has been delinquent in the payment of premium, assessments, penalties, fees or surcharges owed tot he FWCJUA on previous insurance may be required to send funds sufficient to establish a deposit premium equal to 50% of the total estimated annual premium, and (2) Any person delinquent in the payment of premium, assessments, penalties, fees or surcharges owed to the FWCJUA will be required to pay the debt in full prior to obtaining additional insurance through the FWCJUA and may be required to send funds sufficient to establish a deposit premium equal to 50% of the total estimated annual premium.
• Optional Payroll Service with Premium Withholding Program:
  This program is optional and available only to eligible Employers with payroll, as it requires an Employer to execute an application agreement and, within 15 calendar days of coverage being bound for the Employer, the required service agreement(s) with an FWCJUA authorized Payroll Services Partner.  The Employer shall be responsible for the payment of all the Payroll Service Partner's fees under the required service agreement(s), and the Employer must maintain his or her agreement(s) with the Payroll Service Partner in good stadning throughout the policy period.  An Employer, who chooses to participate in this program by completing the required application agreement, for the Employer's selected FWCJUA authorized Payroll Service Partner, shall be required to submit an advance premium equal to 1/6 of his or her total estimated annual premium plus the $475 application fee, regardless of the Employer's total estimated annual premium.  The Employer shall not be required to submit a deposit premium, regardless of the Employer's total estimated annual premium.

[top] 7. Will an Employer with an assessable policy be assessed even if it has incurred no losses?

Yes, an Employer with an assessable policy may be assessed regardless of the Employer’s individual performance. Such an Employer shall be required to contribute, on a pro-rata-earned-premium basis, the money necessary to meet any assessment levied, to cover any deficit attributable to the assessable tier. Additionally, such an Employer may be assessed more than once, and any assessment may be made either while the assessable policy is in effect or at any time after the termination, expiration, or cancellation of the assessable policy.

[top] 8. Would a bankruptcy preclude an employer from obtaining coverage with the FWCJUA?

No, as long as the employer is eligible for the coverage. However, the FWCJUA will require a copy of their bankruptcy filing and 100% of the premium must be collected prior to coverage being bound. Acceptable forms of payment are cashier's check, money order, producer check, premium finance check, or a wire transfer from the employer's bank. For Chapter 7, premium will be based on the most recent 4 quarters of payroll from their UCT-6's unless the most recent quarter shows reduced payroll due to downsizing/termination of employees. For Chapter 11, premium will be based on the most recent 4 quarters of payroll from their UCT-6's. If a trustee has been appointed, a copy of the most recent monthly operating report must be provided prior to binding coverage. Monthly reports are due within 5 days of filing with the bankruptcy court.

For more information, please contact our Underwriting Department at 1-941-378-7400 or e-mail underwriting@fwcjua.com.

Committing FRAUD is a crime!