In late March 2014, Texas Insurance Commissioner Julia Rathgeber approved a staff petition to adopt the National Council on Compensation Insurance (NCCI) Basic Manual, with Texas exceptions, as well as the national and Texas-specific endorsements and forms in the NCCI Forms Manual.

The petition allows NCCI to take over certain workers comp system administrative functions in Texas that TDI is not statutorily required to perform.

The effective date of adoption of the NCCI manual as proposed in the staff petition filed Dec. 30, 2013, was June 1, 2014.

Most comments received by TDI regarding adoption of the NCCI Texas-specific manual requested an effective date of Oct, 1, 2014, however, rather than a June 1 effective date, according to the commissioner’s order.

In response, the order sets a permissive effective date of June 1, 2014, and a mandatory effective date of Oct. 1, 2014.

“The delayed implementation date will allow workers compensation insurers to have adequate time to change their underwriting systems so that they can be in compliance with the new rate and forms manuals on Oct. 1, 2014,” said Steve Nichols, manager of workers compensation services for the Insurance Council of Texas.

Statistical Reporting Plan

Now, the department is working on a plan to transition from the current Texas statistical reporting plan to one developed by the NCCI.

TDI staff has filed a petition asking Rathgeber to adopt the National Council on Compensation Insurance Statistical Plan for Workers Compensation and Employers Liability Insurance (NCCI Stat Plan) and the Texas exceptions.

The TDI staff petition asserts that reporting requirements in the Texas Stat Plan are outdated and minimal, while the NCCI plan requires carriers to submit more detailed information. It noted that most carriers are reporting more information than is currently required.

“The Texas Stat Plan contains minimum statistical reporting requirements for exposure, premium and loss data for each workers compensation policy a carrier issues,” according to the petition. But “most carriers are voluntarily reporting their Texas statistical data in an expanded format, which satisfies the NCCI Stat Plan statistical reporting requirements in other states.”

In addition to requiring more detailed information from workers comp carriers, the NCCI plan with Texas exceptions requires reporting of fraudulent claims, while the current Texas Stat Plan does not, the petition states.

“The NCCI Stat Plan defines a fraudulent claim as a claim that a court has determined to be fraudulent. The proposed Texas exception for this rule describes how to report a fraudulent claim on the statistical reports, depending on when the claim was determined to be fraudulent or whether only a portion of a claim was determined to be fraudulent,” the petition states.

TDI is requesting comments and will hold a public hearing on the adoption of the NCCI plan on June 25.

A copy of the petition and notice is available on the TDI website at www.tdi.texas.gov/rules/2014/exrules.html.

While TDI is adopting various NCCI manuals with Texas exceptions and allowing NCCI to take over the administration of certain functions in the state’s workers comp system, statutorily state regulators are required to continue performing tasks with regard to workers comp. According to the staff petition, those functions include:

• Prescribing standard policy forms and a uniform policy.
• Approving nonstandard forms and endorsements.
• Determining hazards by classifications.
• Requiring carriers to use the classifications determined for Texas.
• Establishing classification relativities.
• Adopting a uniform experience rating plan.
• Developing and updating statistical plans, as necessary.