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Assigned Risk: Deposit

Deposits of 100%, 75%, 50%, or 25% required, based on estimated annual premium size; where to mail applications.;

Reference: Item Filing RM-02-IN-2010 - Revisions to Basic Manual Rule 3-A-6 Deposit Premium effective January 1, 2011, for new and renewal business, and RM-W-8042  Initial or Deposit Premium & Premium Installments, effective January 1, 2013.

 

Estimated Annual Premium

Payment Basis

Minimum Initial Percentage

Additional Payments

Under $2,500

One Pay

100%

None

At least $2,500

Two Pay

75%

One

At least $5,000

Four Pay

50%

Three

At least $25,000

Nine Pay

25%

Eight

 

Refer to Rule 4-I—Initial or Deposit Premium and Premium Installments, located in NCCI’s Basic Manual for Workers Compensation and Employers Liability Insurance (Basic Manual)

 

For purposes of this rule:

·        One Pay means the employer pays the total premium due prior to the policy inception date

·        Two Pay means the employer pays the remaining premium due in month six

·        Four Pay means the employer pays the remaining premium in three equal installments, due in months three, six, and nine

·        Nine Pay means the employer pays the remaining premium in 8 equal installments, due every month based on the policy effective date

Please take note of the “due in month” wording.  These installment payments are not semi-annual, quarterly and monthly in the traditional sense.  For example, a policy with an effective date of 1/31 with a Four Pay plan could have its first installment payment due 3/1, the policy’s third month. 

 

Short Term Policies
 
We still use the same payment schedule based on the policy premium to calculate the initial deposit even with short year policies.  The only difference is we use the policy expiration date and work backwards to establish the initial deposit and determine the due dates of any future installments.

A simple way to do the math is to take the policy expiration date less one year to establish your starting point to determine the installments due dates.  Then use this same date (expiration less one year) and compare it to the policy processing date to determine the number of installments to include in the initial deposit.  Any installment(s) with a due date that is prior to the policy processing date or within 30 days after the processing date get rolled up into the initial deposit.  Any remaining future installments will be billed at a later date (30 days prior to the due date).  

Here are some examples to assist you in understanding:

Example #1:  Policy with premium that qualifies for a 75% deposit and 1 semi annual installment
Date the policy is processed: 12/31/2016
Policy effective 1/1/17 with an expiration date of  9/1/17
Policy Premium  $4000
Initial deposit = $3000 (75% of premium)
Semiannual installment of $1000 due on 3/1/17.  (A billing notice will be sent on 2/1/2017.)

Example #1 Note: The installment due date of 3/1/2017 is the same installment due date that would apply for a full year policy effective 9/1/2016 to 9/1/2017.  Since it is due in the future it is not included in the initial deposit.

Example #2:  Policy with premium that qualifies for a 50% deposit and 3 quarterly installments
Date the policy is processed : 12/31/2016
Policy effective 1/1/17 with an expiration date of  9/1/17
Policy Premium $6000
Initial deposit = $4000  ($3000 deposit + 1000 for the first installment due 12/1/2016)
Future quarterly installments:  $1000 due 3/1/2017 and $1000 due 6/1/2017

Example #2 Note:  The first installment is included in the initial deposit because the established due date is prior to the policy processing date.

Example #3:  Policy with premium that qualifies for a 25% deposit and 8 monthly installments
Date the policy is processed : 12/31/2016
Policy effective 1/1/17 with an expiration date of  9/1/17
Premium $30,000
Initial deposit =  $18,752 ($7500 deposit + 4 installments of $2813)  The 4 installments are for months; Oct, Nov, Dec, and Jan.
Future monthly installments: $2813 due 2/1/2017 $2813 due 3/1/2017, $2813 due 4/1/2017, $2809 due 5/1/2017.

Example #3 Note: The first 4 installments are included in the initial deposit because 3 are prior to the policy processing date and 1(due 1/1/2017 is within 30 days of the processing date.
 

Premium Finance
If mailing the application, all checks, including premium financed checks, must be sent with the application.

General Information

The assigned risk surcharge of 25% applies to that portion of an assigned risk policy which exceeds $2,500, when the total modified premium is in excess of $2,500. The deposit premium calculation must include the surcharge amount.

 

If submitting ACORD forms, please send the application with deposit to one of these two addresses:

Effective February 1, 2017

 

Regular Mail
NCCI—Indiana
Attn: Treasury Department
PO Box 3045
Boca Raton, FL 33431
 
Overnight Delivery
NCCI—Indiana
Attn: Treasury Department
901 Peninsula Corporate Circle
Boca Raton, FL 33487-1362
 
Reference: NCCI Circular FYI-PLAN-IN-2016-02 dated December 7, 2016.


Refund

Deposits are refunded after 10 days from the deposit date to insure the funds cleared. Refunds are processed through the NCCI RMAP System about 3 times a week (Mon, Wed, Fri). The refund payment method is as follows:

  • by ACH - for amounts less than $10,000. Refund amount should be back into the account within 2 business days
  • by check - for amounts greater than $10,000
  • by check - if original deposit was made by money order, cashier's check, or finance company check.

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.