Catastrophe: How Treated in WC Rules

Rules that deal with catastrophe.

Statistical Plan - 2008 Edition 
Rule 4-E-2-a Catastrophe Number

Nonextraordinary Loss Event Claims

A Nonextraordinary Loss Event catastrophe is defined as any accident (one occurrence) resulting in two or more reportable claims. If there is more than one catastrophe under the policy, each succeeding catastrophe number must be increased by one. A separate series of catastrophe numbers (01–10) must be used for each state under a policy on which a catastrophe occurred.

(2) Extraordinary Loss Event Claims

An Extraordinary Loss Event (ELE) catastrophe is a significant loss event from a workers compensation (WC) perspective, which is determined by NCCI on a case-by-case basis. When an ELE catastrophe code has been established and identified by NCCI, report the specific catastrophe number for each claim. The series of ELE catastrophe numbers are 11–99.

Refer to NCCI’s Unit Statistical Reporting Guidebook for additional information.
Then, for experience rating purposes, a catastrophe would be subject to the Experience Rating Plan rule that addresses accidents involving two or more persons. To be specific, here's the rule that applies:

Experience Rating Plan Manual, Rule Part Two
D. Payroll and Losses
3. Limitation on Total Losses Employed in a Rating
b. Accidents Involving Two or More Persons
"Accidents involving injuries to two or more persons shall be limited to the multiple claim accident limitation in the Tables of Weighting and Ballast Values, which is twice the normal accident limitation. The actual primary loss for such accidents is limited to $10,000 - twice the normal maximum primary value."

In Indiana, the current (1/1/19 rates) state per claim accident limitation is $192,000. Double that amount for state multiple claim accident limitation at $384,000.

Item B-1383—Catastrophe Provision—Certified Terrorism Losses
On Friday, December 20, 2002, the ICRB emailed to the Indiana DOI, Item Filing B-1383 "Catastrophe Provision-Certified Terrorism Losses (as defined in Terrorism Risk Insurance Act of 2002)."

This filing is effective for new and renewal business at 12:01 a.m. on
    • December 20, 2002 for voluntary policies, and
    • January 1, 2003 for assigned risk policies.

The filing includes these components:
    • loss cost ($0.01) and rate ($0.02) for a "certified" terrorism acts catastrophe loading
    • terrorism endorsement with premium disclosure statement
    • stat code 9740 for reporting losses
    • updated premium algorithm

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