agent handbook - sif · 2019. 9. 15. · agent handbook july 2019. po box 83720 •boise, id...

A G E N T H A N D B O O KJ U LY 2 0 1 9

2PO Box 83720 • Boise, ID 83720-0044 • 208-332-2100 • www.idahosif.org

AGENT HANDBOOK | 2019

To our agent partners:

We understand and appreciate all the time and effort that goes into delivering excellent service to your clients. To make your partnership with SIF as easy as possible, we’ve compiled everything you need to know in this helpful handbook. In here, you’ll learn about:

Our application process

Our required information — both from you and your client

What to expect throughout the policy period and renewal process

Broker of record letters and certificates of insurance

Reporting policy changes

Our other on-site services available to you

Have a question that isn’t covered here? Please contact us and we’ll be happy to get that information to you as quickly as possible.

(208) 332-2100 | idahosif.org

welcome

http://www.idahosif.org

http://idahosif.org



Application Information 4

Payment Plans 5

Deposits 5

Applicants with Multiple Agents 6

Managing the Account 7

Active Policies 7

Changes During the Policy Year 8

Renewal Process 9

Policy Cancellation 9

Agent of Record Letters 10

Certificates of Insurance 10

ACORD Certificates 10

Other Services 11

Frequently Asked Questions 12

contents




SIF carefully evaluates each application in order to charge an appropriate amount of premium to adequately cover our risk. To do this, we need to know the following items about an applicant:

Ownership: Accurate and specific information about the ownership of the entity is important to:

• Identify who is and is not covered under the policy.

• Determine who has the legal right to request changes in coverage.

• Establish who is responsible for paying the premium.

Combinable or Related Businesses: To identify our potential exposure, we need information about any business that may be combinable with or related to the business owners. The premium and loss information for combinable or related businesses may also be included for experience-rating purposes.

Previous Loss and Payment History: We use this information to assess what payment plan and services will be needed to best accommodate the policyholder’s situation. While we write the majority of the business submitted to us, we need to be aware of special challenges so we can work with you to implement appropriate solutions.

Accurate Description of the Business Conducted: A complete and accurate description of the business activities is crucial to determining the proper classification code(s) for a policy, which is very important during the application process. If we discover that a risk has been misclassified when a claim is filed or during a year-end audit, the policyholder may be required to pay additional premium.

APPLICATION INFORMATION

When applying for coverage, please note the following tips to avoid delays in the process:

» For applicants with multiple entities, submit a separate application for each entity (note: all entities will be included on one policy).

» Provide a detailed description of the applicant’s business operations.

» Provide three years of loss information.

» Provide contact information for individuals responsible for safety and claims.

» Respond promptly to requests for additional information (requests are sent to the agent).

» Payments cannot and will not be applied until the application is quoted, so please do not send any form of payment with the application.

» Ensure the applicant’s owner signs the application (office managers, accountants and other representatives do not qualify).

» Ensure you sign the application, indicating you have reviewed it with the applicant.

» Carefully review the application to ensure all information is complete and accurate.

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Payment Plans

After reviewing the application, our underwriting team will determine the plan and reporting option best suited to the applicant.

Deposits

On a payroll reporting plan, our underwriting team will determine if a monthly or quarterly reporting period is appropriate. The reporting period helps determine the required deposit amount. Since premium is collected in arrears, deposits should be sufficient to cover all premium due during the period in arrears. Deposits also need to cover any future period, including the period from default to the date of the actual cancellation of the policy.

Installment, or “level-pay” plans, are best suited for businesses with:• A predictable payroll.• A low rate per $100 of payroll.• No plans for expansion or change.• An established history.

Monthly reporting is best suited for:• New, unpredictable business.• Fluctuating payroll with a high rate per

$100 of payroll.• Policyholders with previous payment

problems.

Payroll reporting plans are best suited for businesses with:• No established history.• Unpredictable or seasonal payrolls.• A high rate per $100 of payroll.• A desire for a pay-as-you-go plan and no

surprises at the end of the policy year.• A poor or questionable payment history.

Quarterly reporting is best suited for:• Policyholders with stable, predictable

payroll and a good payment history.• Businesses with low to moderate rates per

$100 of payroll.

INSTALLMENT PLAN

MONTHLY REPORTING

PAYROLL REPORTING PLAN

QUARTERLY REPORTING

Deposits may be decreased from the standard percentages if the business:

» Is well-established and has agood payment history.

» Has a history of stable,predictable payroll.

Deposits may be increased from the standard percentages if the business:

» Is a new business with little orno history.

» Has an unpredictable payroll witha high rate per $100 of payroll.

» Has had previous payment problems.

» Has had past audits that have resultedin a large balance due.

The standard deposit percentages are:

» 25% deposit for monthlyreporting.

» 50% deposit for quarterlyreporting.

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Applicants with Multiple Agents

SIF accepts applications from multiple agents for the same applicant. When this occurs, we take the following measures to ensure a smooth application process:

• We call each agent involved, informing them of the multiple applications.

• If we receive conflicting information, we will coordinate with all agents to resolve the conflicts sothat all quotes are based on the same information.

• We provide quotes with identical amounts to each agent who submitted an application.Each individual quote will show the name of the agent that the quote is issued for.

• Accept the most recent agent of record letter received prior to our receipt of the deposit.

• Send the applicant a denial for each agent who submitted an application, if the applicationis denied.

Applications are valid for 30 days. If another agent submits an application after the 30-day period, we will not notify the original agent(s) of the new application.

Please note:

If one agent sends us additional information with a request to reconsider the original denial and we subsequently decide to accept the application, we will not issue a quote to all agents who originally submitted the application. The quote will be issued for the agent who continued to work with the applicant to help them become insurable.




Active Policies

SIF considers the agent the primary contact for all agent policies.

We will contact you if:

• We need additional information, including ownership forms and other documents (these requestsare sent directly to the agent and not to the policyholder).

• We need to relay information about rates or the experience-modification factor for the renewal year.

• We have any questions about a policy or just want to check in to see how things are going.

SIF is a direct-bill company, so all financial-transaction documents are mailed directly to the policyholder.

These include:

» Payroll reports» Renewal payroll reports (voluntary audits)» Statements and invoices» Physical audit arrangements» Application quotes

MANAGING THE ACCOUNT

Please note:

All financial-transaction documents show the agent as the primary contact for questions concerning the document.

We will send you copies of:

» All statements and invoices

» Renewal information pages

» Endorsements

» Any miscellaneous correspondence sentdirectly to the policyholder




Changes During the Policy Year

Please keep us informed of any business changes throughout the policy year, including the following:

The renewal process for a policy depends on the type of payment plan the policyholder is using.

INSTALLMENT (LEVEL-PAY) PLAN RENEWAL• The policy renewal information is mailed 30 days prior to the policy renewal date.

• The estimated annual premium for the renewal year is calculated by using the best availableaudited yearly payroll, multiplied by the rates in effect for the renewal year and any other ratingfactors that apply.

• The first installment amount for the renewal year will be billed on the policy invoice date after therenewal date and must be paid to avoid cancellation.

• A renewal payroll report form will be mailed to the policyholder shortly after the renewal date.The renewal payroll report is a request for the total yearly payroll information for the endingpolicy year. The report needs to be completed and returned to SIF by the noted due date toavoid cancellation.

• If the information received on the renewal payroll report results in a balance due for the previousyear, an invoice will be sent for the balance. Based on the balance due amount, we may adjust theamount and/or number of scheduled payments for the renewal policy year.

• The underwriter will review each policy after the renewal payroll report is billed to identifypossible changes and to determine if the payment amounts set for the renewal year areappropriate. The underwriter may call the producer if there are any questions or to verifyinformation related to the policy.

• Payroll reports that showsignificantly more payroll thanthe original estimated payrollmay indicate a need to increasethe deposit.

• Payroll reports with largeupward variances are carefullyreviewed by the underwriter.The underwriter may contactyou to discuss the increase inpayroll to determine if we havean accurate deposit on hand.

• If the underwriter decides it isnecessary to increase thedeposit, an invoice for theadditional deposit amount willbe sent to the policyholder alongwith a letter explaining thereason for the increased deposit.A copy of the invoice and theletter will also be sent to you.

• If there are any ownershipchanges, please contact us withthe new owner’s information.

• We will send you forms todocument the change, whichwill need to be signed by thepolicyholder.

• We will not make any changesto the policy until we receivewritten documentation.

Contact your underwriter when there is:• A change in the policyholder’s

mailing address.

• A change in accountant orbilling address.

• A new location. We will alsoneed the address, the businessconducted at the new locationand the DBA (doing business as)name, if applicable. If theadditional business location isa new entity, we will require anew application.

Please note:

Address and location changes can usually be made over the telephone and without written documentation.

PAYROLL OWNERSHIP ADDRESS

Renewal Process




PAYROLL REPORTING PLAN RENEWAL• The policyholder will receive payroll reports throughout the year based on the type of reporting

plan assigned. The payroll information provided on these reports will be used for interim billingand for policy year-end reconciliation. The reports need to be completed and returned to our officeby the noted due date to avoid cancellation.

• When the final interim report is completed and we have received it, the underwriter will review thepolicy to identify any necessary changes. The annual payroll information will be used to determinethe actual annual premium due for the ending policy year. The renewal deposit will be adjustedbased on the reported annual payroll. An invoice will be mailed to the policyholder for anyremaining balance due from the previous year and for the deposit adjustment required for thecoming year.

• In some situations, a mail audit may also be sent for completion.

• The estimated annual premium for the coming year is based on the previous year’s payrollmultiplied by the current year’s rates. The deposit is determined as a percentage of the estimatedannual premium. The deposit percentage may be adjusted at renewal.

• The underwriter may call the producer to ask questions or verify additional information receivedduring the renewal process or to discuss the status of the account.

CANCELLATION BY POLICYHOLDERAll policies issued by SIF are continuous and renew automatically unless canceled by written request from the policyholder or for cause by SIF.

A policyholder may cancel their policy at any time. To process a cancellation, we require a written cancellation request stating when the cancellation will take effect and including the following information:

CANCELLATION BY SIFWhen canceling a policy, SIF follows the cancellation criteria outlined in Idaho Code:

• At least a 10-day advance written notice will be sent to a policyholder whose policy is beingcanceled for failure to pay premium (includes failure to report payroll), for material misrepresentationor unforeseen changes in the risk assumed, or for “substantial breaches of contractual duties.”

• A 60-day notice of cancellation will be sent if SIF decides not to renew the policy expiration date orinitiates a mid-term cancellation for cause.

Policy Cancellation

Please note:

Mid-term cancellations may be subject to short-rate penalties.

• Policy number

• Reason for cancellation

• Signature of a named owner of thebusiness insured on the policy(SIF will not accept signatures from abookkeeper, accountant or spouse of asole proprietor).

• For policies with agent representation, a signed ACORD 36-Cancellation Request Form will also be accepted with the above required information.




Regardless of who initiates the cancellation process or why, SIF always issues a cancellation notice via certified mail. The Certified Notice of Cancellation states the date and time the policy will be canceled and the reason for the cancellation. The cancel date printed on the notice of cancellation complies with the notice requirements outlined in Idaho Code.

When we receive an Agent of Record letter, we will:

• Honor requests submitted on the policyholder’s letterhead orACORD 36 form, provided it contains the policy number, effectivedate and is signed by a named owner of the business insured onthe policy.

• Honor a request to change a policy from one agent to another orfrom a direct policy to an agent on the policy renewal date.

• Honor a mid-policy term request; however, commissions paid to thenew agent will begin on the renewal date following the change.The new agent will be the servicing agent from the date of the change.

• Only honor Agent of Record letters that are signed by a namedowner of the business insured on the policy. We cannot honorAgent of Record letters signed by office managers or accountantsor spouses of sole proprietors.

• Notify the existing agent when we are making a change from oneagent to another when an Agent of Record letter is received.

As an agent, you can request a Certificate of Insurance (proof of insurance) to be issued on behalf of your client.

To request a certificate, please email the following information to [email protected]:

• Policy number

• Policyholder’s name (name of the insured business)

• Your name

• Name and address of the person or business to receivethe certificate

• If the request is urgent, the fax number of the person or businessto receive the certificate

• Name or number of any special job reference that needs to beincluded on the certificate

Agent of Record Letters

Certificates of Insurance

ACORD CERTIFICATESIf you carry multiple lines of insurance and prefer to issue an ACORD certificate at your office, please note the following guidelines:

• Always verify policystatus with SIF beforeissuing the certificate.

• If there is an additionalinsured endorsementshown for the other linesof insurance, be sure toindicate that it does notapply to workers’compensation coverage.

Please note:

A mailing address is required even if you request the certificate be faxed.


mailto:certificate%40idahosif.org?subject=



Agent Education & Assistance

Our Agent Relations Coordinator and underwriters are available to assist you with general questions about SIF and our workers’ compensation policy. If you or anyone in your agency have questions regarding our services, please contact us at (208) 332-2100.

Agent Assistance

Our field service representatives are available to assist you with the following types of client visits:• New policy reviews:

A review of the general provisions of a policy including class codes, rates, experience modifiers, payroll reports, payment plans, due dates and certificates of insurance can be a valuable educational experience for a client who is new to workers’ compensation.

• Policy Renewal Visits: We can provide you with policy-specific renewal information (new rates, e-mod, payment plan, loss history, etc.) and inform you of any changes that will occur when the policy renews.

Loss-Control ServicesOur Loss Control Consultants are available to assist with reducing injuries and controlling losses through our consultation services.

We can assist you with:• Developing a written management safety policy.

• Establishing a claims management program to monitor claims progress and return injured workers to light duty, modified duty or regular work as soon as possible.

• Safety training for your managers, supervisors and employees.

• On-site visits to help identify and correct physical hazards.

• Work observations to analyze work processes and help develop safe work procedures.

• Developing loss-prevention surveys to evaluate a policyholder’s current loss-prevention effort and identify loss-prevention activities or actions the policyholder can take to help reduce or eliminate potential injuries.

• Creating a supervisor safety training program, designed to teach supervisors how to conduct loss prevention activities, reduce losses and improve performance and productivity.

• Training for supervisors to help them understand how to complete an accident investigation report, determine root causes and take corrective action.

• Review the company’s loss experience and how it impacts their workers’ compensation costs and business expenses. Based on that analysis, we will recommend loss prevention activities that can help reduce those costs.

OTHER SERVICES




What do I need to do if my client buys a second business entity?

First, please complete and send a new application for the new business. We will need to know the nature of business, the payroll amount and ownership information. Also, please let us know if the new business is combinable with or related to an existing SIF policy.

If your client’s current business is experience-rated, be sure to let them know the history of the new business could impact their experience-modification rate if the ownership makes the businesses combinable. NCCI rules state that the experience of a business transfers to the new owners. Remind your client that each entity will stand alone for classification and exemption purposes.

What is an Experience Rating Manual-14 form and why is it important?

The ERM-14 (Confidential Request for Ownership Information) form is an NCCI form used to determine the combinability of businesses. We will request a completed ERM-14 if: • The ownership of a business changes.• A business is sold.• There are other questions related to the combinability of entities.

We will submit the completed ERM-14 to NCCI for a ruling on combinability. If the two entities are ruled to be combinable, they will share the same experience modification rate and the same NCCI risk ID number.

Why do you make a distinction between the entity and the DBA?

It is important for us to know exactly what the legal status of a business is because multiple policies cannot be written for the same legal entity. An entity is the legal status the ownership has selected for their business (sole proprietor, partnership, corporation, LLC, etc.) while the DBA is a name of a business being operated by the entity. One entity may conduct multiple businesses with multiple DBAs.

How can my client get an exemption for his non-household family members?

SIF cannot exempt a non-household family member of a sole proprietor without the approval of the Idaho Industrial Commission. To apply for exemption, the non-household family member wishing to be exempt must apply to the Idaho Industrial Commission. If approved, the Idaho Industrial Commission will issue a written approval to the applicant, which will need to be shared with SIF to place the exemption on the policy.

What are some of the common misunderstandings about exemptions?

Idaho Code 72-212 outlines the exemptions included in workers’ compensation law.

Common Ownership Exemptions:• Sole proprietors• Employment of members of an employer’s family dwelling in their household.• Partners of a partnership• Members of an LLC or LLP• Corporate officers owning 10% or more of the voting stock and who are also directors

(if the corporation has directors).

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Ownership Examples:• Employment of members of an employer’s family dwelling in their household refers

only to household family members of sole proprietors or a single-member, limited- liability company that is taxed as a sole proprietorship. Family members of partners, corporate officers or members of an LLC or LLP are not exempt, and payroll must be reported for them.

• Owners who are partners, members or corporate officers of an entity that has ownership in any other entity are not exempt from coverage in the entity owned by the entity of which they are a partner, member, or corporate officer unless they are personally listed as an owner, partner or member of the owned entity.

» For example: John Jones is an exempt corporate officer in ABC Corporation. ABC Corporation owns 50% of XYZ Partnership and John Jones actively works in and is paid by XYZ Partnership. John Jones is not personally listed as a partner in XYZ Partnership and, therefore, he is not exempt, and any payroll paid to him by XYZ Partnership is reportable.

• Corporate officers must meet all three of the conditions set by Idaho Code section 72-212(6) to be exempt. They must be a corporate office, own at least 10% of the voting stock and be a director of the corporation, if the corporation has directors.

» A corporate officer is not exempt if they own less than 10% of the voting stock and they are not also a director, if the corporation has directors.

Shares of voting stock issued as “joint tenancy” are split evenly between the two parties specified and the rules are applied based on the stock each party would own separately. For example, if a husband and wife hold 15% of the corporate voting stock in joint tenancy, rules are applied based on each owning 7.5% of the voting stock, and neither of them are exempt.

Casual EmploymentCasual employment is defined in the Idaho Supreme Court’s Larson v. Bonneville Pacific Services Co., 117 Idaho 988 (1990) decision as: “employment that arises only occasionally or incidentally and is not part of the usual trade or business of the employer.”

What is the purpose of an experience modification (e-mod)?

According to the NCCI Experience Rating Plan Manual, “Experience rating recognizes the differences among individual insureds with respect to safety and loss prevention. It does this by comparing the experience of individual insureds with the average insured in the same classification.”

Why would the e-mod increase when there has been no change in premium or losses?

If the dollar amount of the total losses are the same, the type of loss may be causing an increase in the e-mod. In the e-mod calculation, losses for medical-only claims are discounted by 70% while losses associated with time-loss claims are reported at 100% of their value. So, even if the total loss dollars are the same from one year to the next, the makeup of the loss dollars can have a significant impact on the e-mod.

If the dollar amount and the type of losses have remained the same from one year to the next, the e-mod could still go up if the loss history of similar businesses with the same class code has improved. The e-mod calculation compares the insured’s losses to the average losses in the same classification group. If the losses of the classification group, as a whole, improved during the rating period, and your client’s losses remained the same, your client could see an increase in their e-mod.

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Why does the premium and loss experience of a newly purchased business apply to the new owner?

NCCI Experience Rating Plan Manual Rule 3.E.1 states that the experience of the business purchased will follow to the new owners unless there has been a change in the business operation significant enough to change the “nature of the business.” NCCI reasons that the newly purchased business will have many of the same employees and supervisors it had prior to the purchase, and thus the same safety culture.

How does coverage apply for out-of-state workers?

SIF is authorized to operate as an insurer only in Idaho and can insure only Idaho workers temporarily working out of state. Employees working outside Idaho on a regular basis are not Idaho workers and are not covered under a SIF policy. If an employer occasionally has employees that work temporarily outside Idaho, they may be covered under a SIF-issued policy if the employee’s employment is principally localized in Idaho.

While an employee temporarily working in another state may be covered under a SIF policy, the coverage may not satisfy the workers compensation laws of that state. If an employer is held to be out of compliance in the other state, the employer could be heavily fined for not having valid coverage required by that state. It is not unusual to see penalties and fines $10,000 and above.

Workers’ compensation laws are state-specific, and no state’s laws are the same as Idaho’s. If an employee is injured while working in another state, that worker may file for benefits in Idaho, or in the other state, or in both. If a claim is filed in another state, that state could award benefits that exceed the benefits payable under Idaho law. In that event, SIF policy would pay only the benefits due under Idaho law, and the employer would be required to pay any benefits in excess of that required by Idaho law. Some state’s benefits greatly exceed the benefits payable under Idaho law.

Reciprocity agreements and extraterritoriality certificatesIf an employer needs to have employees temporarily work in a nearby state, the employer should file a request for extraterritorial coverage with the Idaho Industrial Commission (IIC) to ensure it is in compliance with the other state’s workers’ compensation laws. The IIC has entered into reciprocity agreements with certain surrounding states that allow those states to temporarily accept coverage under a SIF policy as compliant. Currently, the IIC has reciprocity agreements with Montana, Nevada, North Dakota, Oregon, Utah, Washington and Wyoming, but this is subject to change and not controlled by SIF. Always check with the IIC for up-to-date information regarding reciprocity agreements.

Most reciprocity agreements limit extraterritorial coverage for employees temporarily working in their states for up to six months. Montana and Nevada do not allow reciprocity for construction work. States without reciprocity agreements in force do not recognize a SIF policy as being compliant with their workers’ compensation laws.

To take advantage of reciprocity agreements, the employer is responsible for obtaining an extraterritoriality certificate from the IIC. Any time an employer considers working across state lines, the employer should check with the workers’ compensation regulatory authority of the state where an employee will be working to ensure that a SIF policy meets the requirements of that other state’s laws.

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agent handbook - sif · 2019. 9. 15. · agent handbook july 2019. po box 83720 •boise, id...

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