Skip Ribbon Commands
Skip to main content
Home


Assigned Risk: Binder Date

We can bind coverage the day after postmark or proof of courier pickup. If no proof, then we bind the day after bank deposits check.;

Conditions to bind:
The Bureau can only bind coverage after:
  • all application information is complete, and
  • correct deposit premium is deposited in the bank.

Once these conditions are met, the Indiana WCIP rules permit us to bind coverage the day after the U.S. Postal Service (USPS) postmark. To meet today's business practice of using overnight delivery service, we also will bind coverage the day after the courier pick-up date. However, we must have proof of the pick-up date from the courier. Most overnight envelopes do not provide sufficient proof so you need to get a log statement from the courier. Our experience seems to show fewer problems if you use the U.S. Postal Service postmark.


If no postmark or proof of pick-up
If an envelope has no postmark (remember, metered mail does not have a postmark!), or the postmark is unreadable, or if there is no proof of an overnight delivery pick-up date, then we will bind coverage the day after the bank processes the deposit check. Under this scenario, the binder date is dependent upon the days that could pass while the courier is delivering the envelope and the days that could pass for the bank to open its mail, enter application header information, and deposit the check. This could easily reach 5-10 days.


If deposit check bounces
If the check does not clear the bank due to insufficient funds (NSF), then coverage is not bound because an NSF check is equivalent to no payment at all. However there is an opportunity to keep the original binding date.

Here's the ICRB's procedure:

If the ICRB has an application in process (not yet bound), and we learn that the initial check is NSF, then we send an AR2 letter stating that since the check is NSF the only way to keep the original binding date is to OVERNIGHT a replacement check to the bank with a copy of our letter. The check must be CERTIFIED or CASHIERS. We normally allow 5 days for the check to show up.

Here are the rules that support our procedure:

Refer to The Basic Manual Indiana Assigned Risk Special Rules (green pages), Article II, 2.09, Binding of Coverage:

The effective date on the binder will be the secured effective date determined in section 2.05...only if all of the following occur:
  • The Plan Administrator is in receipt of complete signed application within the established time frame;
  • the applicant is deemed eligible; and
  • the total initial or deposit premium has been received by the Plan Administrator within the established time frame
The flexibility is based on the Basic Manual Assigned Risk Supplement Rule II.A.6. that provides:

"If a deposit premium payment is rejected for insufficient funds, replacement funds must be provided in the form of a certified or cashier's check."

Although Plan rules do not specifically cover the scenario in which the bounced check is not discovered until after the ICRB issues the binder, the servicing carrier, at its option, could:
    • request a certified or cashier's check and maintain the effective date;
    • request a certified or cashier's check with new effective date as of receipt of new check;
    • rescind the binder and thus, no coverage.

The servicing carrier would not need permission to cancel the binder from the ICRB, whatever option it took. The thought is that since technically, no deposit was received due to insufficient funds, and a deposit is necessary to bind coverage, there would be nothing to cancel, so no permission would be necessary.

In summary, a dishonered check is not a premium payment.

Who is the servicing carrier?
We use several insurance companies to actually write the assigned risk policies. They are called the servicing carriers. We will know which carrier is assigned to an employer once the binder is issued, not before. So, if there is missing information on the application or the deposit amount is wrong, we cannot bind coverage and we will not know which servicing carrier will be picked by our assignment system.

For mailed applications, it can take a 7-10 days before we receive the app from the bank to process. So, if you are anxiously waiting to issue a certificate of insurance, it could take that long after you mail the app before we know who the carrier will be.

Quick Summary
Do we have...
YES
NO
Postmark or
Proof of Pick-up?
Bind day after postmark or proof
Bind day after
bank deposits check

 

 

Certificate of Insurance
Assigned Carrier Performance Standards and the Basic Manual Assigned Risk Supplement permit a producer to issue a certificate of insurance on behalf of servicing carriers under certain conditions.
 
Assigned Carrier Performance Standards (excerpt)
F. CERTIFICATE OF INSURANCE Effective 01 Jan 2009
(Exceptions: NC, NJ)
1. On request, the assigned carrier must issue certificates of insurance. If the request is consistent with the terms and conditions of the policy, the certificate must be issued within five business days after receipt of
the request.
2. Producers are authorized to issue certificates of workers compensation insurance, in accordance with Section 1-A-4-a of the Assigned Risk Supplement – 2006 Edition
3. Assigned carriers may permit producers to issue certificates of insurance on the assigned carrier’s own forms; however, such certificates may only be issued subject to the same terms and conditions under which
certificates on the standard ACORD® form may be issued. If the assigned carrier authorizes the use of such a form, the assigned carrier must instruct producers in the use of that particular form.
4. The “Special Items” section of the certificate may be modified by the assigned carrier, or by the employer/producer if authorized by the assigned carrier, to include clauses required by contract. This is the only basis for modification and must be authorized by the assigned carrier. An example of such modification is the addition of the special cancellation and notification clause required by many government contracts.
 
 
Assigned Risk Supplement—2010 Edition (excerpt)
Effective 01 Jan 2010 12:00:01
 
Supplement 8—Certificates of Insurance
a)  Certificates of insurance must not be issued until the Plan Administrator has issued a binder listing an assigned carrier. The Plan Administrator does not issue certificates of insurance.
b)  On request, the assigned carrier must issue certificates of insurance. If the request is consistent with the terms and conditions of the policy, the certificate must be issued within five business days after receipt of the request.
c)  Producers are authorized to issue certificates of workers compensation insurance when all of the following conditions exist:
              The coverage is bound by the Plan Administrator using the standard ACORD® 130 and ACORD® 133 forms for operations listed in Part 3.A. of the Information Page
              The binder or policy has not been cancelled
              The policy terms are unchanged (e.g., additional locations and/or exposures have not been added to the policy)
              The certificate holder is not extended any greater rights than the insured
              The assigned carrier is provided with a copy of each certificate issued
 
d)  The certificates must not be issued prior to the producer’s receipt of the binder listing the name and address of the assigned carrier and coverage effective date.
e)  The assigned carrier must maintain a copy of all certificates of insurance issued by the producer on behalf of the employer on file.
f)   The assigned carrier may reject any certificate not issued according to the requirements listed in Supplement 8-c) above, and that certificate is considered invalid.
g)  Assigned carriers may permit producers to issue certificates of insurance on the assigned carrier’s own forms; however, such certificates may only be issued subject to the same terms and conditions under which certificates on the standard ACORD® form may be issued. If the assigned carrier authorizes the use of such a form, the assigned carrier must instruct producers in the use of that particular form.
h)  The “Special Items” section of the certificate may be modified by the assigned carrier, or by the employer/producer if authorized by the assigned carrier, to include clauses required by contract. This is the only basis for modification and must be authorized by the assigned carrier. An example of such modification is the addition of the special cancellation and notification clause required by many government contracts.
i)    If there is an urgent need for binding of coverage in order to obtain a certificate of insurance, contact the Plan Administrator for assistance.
 
 

 


 

Related Files

The material in this document has been prepared and shared for informational purposes only and should not be relied upon as legal advice on any particular situation.