Governing Rules

Summary of rules for governing class, governing state, and governing policy.

Governing Classification
"The Governing Classification at a specific job or location is the classification, other than a standard exception classification, that produces the greatest amount of payroll."
Basic Manual Rule 1.B.5., page R4

Assigned Risk Interstate Assignments
"When coverage is requested in several states, the application instructions and premium payment program for the Plan state generating the most payroll shall be used." Note: As of January 1, 2005 Indiana assigned risk policies are not combinable with any other state.
Basic Manual Assigned Risk Supplement Rule 4.A.8.

Anniversary Rating Date
Multiple policy risk with varying effective dates...
"The ARD is determined by the policy with the largest premium, unless otherwise established by the rating organization."
Basic Manual Rule 3.A.2., ARD Table 2.

LSRP Multistate Employer Note: Effective January 1, 2005 this rule does not apply in Indiana, as Indiana assigned risk policies can not be combined with any other state.
To determine if a multi-state employer qualifies for LSRP:
  1. Split LSRP states and non-LSRP states into two premium totals.
  2. Combine all annual standard premium for the LSRP states.
  3. Determine the LSRP state with the largest premium.
  4. Find this state's eligibility threshold for the LSRP.
  5. If the combined total of the LSRP states meets or exceeds this state's premium eligibility threshold, then the employer qualifies for the LSRP.

Note: actual rule located in The Basic Manual Indiana Assigned Risk Special Rules (green pages), Part Three, I.B. In calculating premium, you must split the LSRP states and non-LSRP states into two separate premium totals, and two separate policies. (It may not be possible for one carrier to provide coverage for all states, so more polices or carriers may be required.)

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