02-031 C.M.R. ch. 470
AND ADJUSTMENT
The purpose of this chapter is to require insurers to complete final premium audits within 120 days of the termination of a workers' compensation insurance policy so that the insured receives reasonably prompt notice of his obligations under the policy.
For the purposes of this chapter 'final premium' shall mean the premium determined using payroll or other appropriate premium basis and the rates, rules, and classifications approved for use during the policy period.
An insurer may determine the final premium after the policy expiration date using the actual premium basis, proper classifications, and approved rates and rating rules that apply during the period of coverage.
Except for policies issued subject to retrospective rating, the final premium shall be established not later than 120 days after the policy ends.
If the insurer has not established the final premium 120 days after the policy period ends, or any extension pursuant to Section 7 below, the insurer is prohibited from billing or collecting any additional premium exceeding the latest billed premium immediately prior to the 120-day time limit. However, if the insurer has failed to perform a final premium audit within the 120-day time limit, the insured, upon written request to the insurer, is entitled to a final premium audit for the purpose of determining if the insured has been overcharged.
For policies subject to retrospective rating, the final premium shall be established
upon agreement between the carrier and the insured or in accordance with conditions established within the policy, and adjustment of the final retrospective premium shall be permitted only if there is a clerical error.
If the carrier is unable to examine and audit the records of the insured that relate to the calculation of the final premium and the inability is solely due to the failure of the insured to cooperate in the audit, then the 120-day limitation in Section 4 above shall begin when the carrier is able to complete the examination and audit of the insured's records. The insurer must notify the insured in writing prior to 120 days from the end of the policy period of the reasons for the inability to establish the final premium.
This chapter shall apply to all policies in both the voluntary market and the residual market. This chapter applies to: (1) all policies issued or renewed on or after May 1, 1988; and (2) all policies in effect on the effective date of this chapter, in which cases the 120-day limitation in sections 4 and 5 shall run from May 1, 1988.
History. -- Effective. 3-21-88.
History. -- Statutory Authority.--24-A M.R.S.A. §§ 212, 2363.
EFFECTIVE DATE (ELECTRONIC CONVERSION): January 14, 1997