the workers' compensation rating and inspection …€¦ · attached for your review is a copy...

THE WORKERS' COMPENSATIONRATING AND INSPECTION BUREAU OF MASSACHUSETTS

101 ARCH STREET - 5TH FLOOR, BOSTON, MA 02110VOICE: (617) 439-9030 FAX: (617) 439-6055

August 4, 2000

CIRCULAR LETTER NO. 1851

To All Members and Subscribers of the Bureau:

DATA QUALITY INCENTIVE PROGRAMS___________________________________________

The Commissioner of Insurance recently approved data quality incentiveprograms to encourage the accurate and timely reporting of unit statistical data andaggregate financial data.

Attached for your review is a copy of the Decision approving the data qualityincentive programs. It is important to note that the Decision changes the WCRB’sproposed data quality incentive programs in three significant areas.

1. The Decision includes an order that, effective June 30, 2000, theMassachusetts Workers Compensation Financial Data Call Package shallbecome a component of the Statistical Plan.

2. The Decision states that the incentive program for the unit statistical datashall apply to reports on policies with an effective date of January 1,2000, or later, and to all reports required to be submitted to the WCRB onor after September 1, 2001, regardless of policy effective date.

3. The Decision states that the data quality incentive program for unitstatistical data (program) shall apply only to insurers licensed to writeworkers’ compensation insurance in Massachusetts. The program will notapply to Self-Insurance Groups (“SIGs”).

Data Quality Incentive Programs Circular Letter No. 1851

Attached for your information and use are:

• Section XII, which contains the incentive program of the unit statistical data andshould be added to the Massachusetts Workers’ Compensation Statistical Plan;and

• Massachusetts Workers’ Compensation Data Quality Incentive Program ForAggregate Financial Data. In accordance with the Decision, we plan to make afiling to formally incorporate the Financial Data Call Package as a component ofthe Statistical Plan. After that filing is approved, we will distribute a revisedStatistical Plan.

If you have any questions, please contact the undersigned at ext. 567 orChristopher Yergeau at ext. 575 with any questions or comments.

SHEILA ANNISVice-President of Data Operations

SA/sf/98Attachments

Checklist of Changes to The Massachusetts Workers Compensation Unit Statistical Plan

Section Page(s) Reason for UpdateSection XII Pages 1-9 Adds the Data Quality Incentive Program to the Statistical

Plan, Section XII.Table ofContents

Page viii Adds Section XII – Data Quality Incentive Program

Table ofContents

Pages i-vii Repagination

Index Page 1 Added Appeal of Penalties Levied Under the Data QualityIncentive Program

Index Page2 Added Expected Unit ReportIndex Page 3 Added Final Report for Units Without Corresponding Policies

Added First Overdue Unit Fine ReportAdded Follow-up Fine Reports

Index Page 5 Added Overdue Unit ReportAdded Preliminary Error Fine ReportAdded Preliminary Report for Units Without CorrespondingPolicies

Index Page 6 Added Subsequent Monthly Unit Error Fine ReportIndex Page 7 Added Unit Error Reports

Added Units Without Corresponding Policies Report

Data Quality Incentive Program for Aggregate Financial Data

Page(s) Reason for UpdatePages 1-8 Data Quality Incentive Program for Aggregate Financial Data

MASSACHUSETTS WORKERS’ COMPENSATIONUNIT STATISTICAL PLAN

Effective: January 1, 2000Distributed: August, 2000 TABLE OF CONTENTS

i

TABLE OF CONTENTS

SECTION I – INTRODUCTION PAGE

Introduction .......................................................................................... I – 1

SECTION II – GENERAL INSTRUCTIONS

Scope of Report ................................................................................... II – 1Validity of the Unit Report..................................................................... II – 1Form of Report ..................................................................................... II – 2Retrospective Rated and Interstate Experience Rated Risks................ II – 3Date of Valuation and Filing ................................................................. II – 3

First Reports ............................................................................. II – 3Subsequent Reports ................................................................. II – 3Filings Due ............................................................................... II – 4Revision of Losses ................................................................... II – 4

Fraction of Dollars ................................................................................ II – 5Reinsurance......................................................................................... II – 5Uncollectible Premiums........................................................................ II – 5Group Claim Option ............................................................................. II – 5Method of Transmittal........................................................................... II – 6Forms Must be Typed .......................................................................... II – 6Three Year Fixed Rate Policies............................................................ II – 6

Unit Reporting Basis-Hard Copy of Electronic Submissions...... II – 6Summarized Basis.................................................................... II – 7

Other Multiple Year Policies ................................................................. II – 8Special Rules for Reporting Disease Experience ................................. II – 8Experience Under the National Defense Projects Rating Plan.............. II – 9Radiation Exposure-Government Agency Atomic Energy Projects....... II – 10Other Than Government Agency Atomic Energy Projects .................... II – 10Unemployment or Emergency Relief Employees.................................. II – 10

SECTION III – CORRECTIONS and RE-VALUATIONS

Corrections are to be submitted between valuations for only the following situations ............................................................................. III – 1

Errors........................................................................................ III – 1Non-Compensable Claims........................................................ III – 1Anticipation of Recovery from Second Injury Fund ................... III – 2Receipt of Subrogation Recovery from a Third Party ................ III – 2Aggravated Inequity.................................................................. III – 2Formerly Self-Insured Deposit Adjustments.............................. III – 2Completion or Change in the Audit ........................................... III – 3

Re-Valuation’s...................................................................................... III – 3Adjustment of Losses Between Valuations........................................... III – 3


TABLE OF CONTENTS Effective: January 1, 2000Distributed: August, 2000

ii

SECTION III – CORRECTIONS and RE-VALUATIONS continued… PAGE

Method of Reporting Corrections and Re-Valuation’s ........................... III – 3Examples of Link Data Corrections:

Information for examples (Exhibits 1, 2, 3 & 4) .............. III – 5 – 8Corrections of Policy ID Number for All Report Levels (Exhibits 5 & 6)................................................. III – 9, 10Corrections of Policy ID Number for One Report (Valuation Level) Only (Exhibits 7 & 8) ........................ III – 11, 12Correction of Correction Sequence Number (Exhibits 9, 10 & 11).................................................... III – 13, 14, 15Correction of Report Number (Exhibits 12 & 13)............ III – 16, 17Header Corrections (Non-Link Data Elements) ............. III – 18Examples of Header Corrections (Exhibits 14-18) ......... III – 19-23Header Correction for Multi-state Indicator (Exhibit 19) . III – 24Header Correction for Expiration Date (Exhibit 20)........ III – 25Update Type for Exposure, Loss and Expiration Modification Records................................................... III – 26Key Elements for Exposure and Loss Records ............. III – 28Update to Non-key Elements on Exposure, Loss and Modification for Total Records..................................... III – 29Examples of Exposure Record Corrections (Exhibits 21, 22, 23, 24 & 25) ...................................... III – 32-36Examples of Loss Correction (Exhibits 26, 27, 28 & 29) III – 37-40Examples of Multiple Corrections Including Change to Modification Factor (Exhibits 30, 31-1 & 31-2) ......... III – 41-43Miscellaneous Corrections (Exhibits 32 & 33) ............... III – 44-51Field Requirements for Corrections by Correction Type III – 52Replacement Reports ................................................... III – 54Offset or Deletions of Detail Loss or Exposure Records III – 55

SECTION IV – STATISTICAL CLASSES

Alphabetical List of Statistical Classes ................................................. IV – 1Adjustment to Premium Due from Flat Increases Code 0998 or Decreases Code 0994...................................... IV – 1Aircraft Operation-Passenger Seat – Code 0088 ...................... IV – 1All Risk Adjustment Program – Code 0277 ............................... IV – 1Construction Classification Premium Adjustment Program Code – 9046........................................................................... IV – 2Policies with Deductible-Class Codes 9784-9788, 9663 and 9664 ....................................................................................... IV – 2Premium Discount – Class Codes 0063-0064........................... IV – 3Disease Classes – Class Codes 0059, 0065, 0066, 0067 0133 and 0179........................................................................ IV – 4Employers’ Liability-Increased Limits – Class Codes 9845, 9803-9816, 9848, 9817-9822, 9840 and 9849 ........................ IV – 4



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SECTION IV – STATISTICAL CLASSES continued… PAGE

Expense Constant – Class Code 0900 ..................................... IV – 6Formerly Self-Insured’s Class Codes 9129 and 9136 ............... IV – 6Loss Constant Class Code 0032............................................... IV – 7Merit Rating – Class Codes 9885 and 9886.............................. IV – 7Minimum Premium – Class Code 0990..................................... IV – 7No Massachusetts Exposure – Class Code 1111 ..................... IV – 8Non-Ratable Elements – Class Codes 0770, 0773, 0774, 0775, 0776, 0779, 0799, 7445 and 7453 ................................ IV – 8Qualified Loss Management Program Premium Credit Class Code 9880 .................................................................... IV – 9Radiation Exposure Class Codes 9984 and 9985..................... IV – 9Rate Deviation Credit – Class Code 9037................................. IV – 10Short Rate Penalty Premium – Class Code 0931 ..................... IV – 10Strike Duty Premium Surcharge – Class Code 0111................. IV – 10Waiver of Subrogation – Class Code 0930 ............................... IV – 10

Numeric List of Statistical Classes........................................................ IV – 11-IV – 14

SECTION V – HEADER LINK DATA

Report Number..................................................................................... V – 1Previous Report Number...................................................................... V – 2Correction Number............................................................................... V – 3Previous Correction Number ................................................................ V – 4Correction Type.................................................................................... V – 5Replacement Report Indicator.............................................................. V – 6Carrier Code ........................................................................................ V – 6Previous Carrier Code.......................................................................... V – 7Policy Number...................................................................................... V – 7Previous Policy Number ....................................................................... V – 8Policy Effective Date ............................................................................ V – 9Previous Policy Effective Date.............................................................. V – 10Policy Expiration Date .......................................................................... V – 11Exposure State..................................................................................... V – 12Previous Exposure State...................................................................... V – 13State Effective Date ............................................................................. V – 13Certificate Number ............................................................................... V – 14Card Serial Number ............................................................................. V – 14Risk Identification Number ................................................................... V – 15Page Number....................................................................................... V – 15Last Page Number ............................................................................... V – 16Insured’s Name.................................................................................... V – 16Insured’s Address ................................................................................ V – 16Federal Employers’ Identification Number (FEIN)................................. V – 17Modification Effective Date................................................................... V – 17Rate Effective Date .............................................................................. V – 18



iv

SECTION V – HEADER LINK DATA continued… PAGE

Three Year Fixed Rate Indicator .......................................................... V – 18Multi-state Indicator.............................................................................. V – 19Interstate Indicator ............................................................................... V – 19Estimated Exposure Indicator............................................................... V – 19Retrospective Rating Indicator ............................................................. V – 20Canceled Indicator ............................................................................... V – 20Managed Care Organization Indicator.................................................. V – 21Policy Type Identification Code ............................................................ V – 22Deductible Type ................................................................................... V – 23Deductible Percent............................................................................... V – 24Deductible Amount Per Claim/Accident................................................ V – 24Deductible Amount Aggregate.............................................................. V – 24

SECTION VI – EXPOSURE RECORD

Update Type ........................................................................................ VI – 1Exposure Coverage Act ....................................................................... VI – 2Class Code .......................................................................................... VI – 2Exposure Amount................................................................................. VI – 3Manual Rate......................................................................................... VI – 5Premium Amount ................................................................................. VI – 5Total Subject Premium......................................................................... VI – 6Experience Modification Factor ............................................................ VI – 7Total Modified Premium ....................................................................... VI – 7Total Standard Exposure...................................................................... VI – 8Total Standard Premium ...................................................................... VI – 9Premium Discount Amount................................................................... VI – 10Expense Constant Amount................................................................... VI – 10

SECTION VII – LOSS DATA

Update Type ........................................................................................ VII – 1Claim Number ...................................................................................... VII – 2Accident Date....................................................................................... VII – 3Number of Claims ................................................................................ VII – 3Incurred Indemnity ............................................................................... VII – 4

Death and Permanent Total Claims .......................................... VII – 5Reporting of Reimbursement from a Special Fund ................... VII – 6Expenses Included in Losses ................................................... VII – 6Penalties for Delays in Making Compensation Payments ......... VII – 8Subrogation .............................................................................. VII – 8Lump Sum Claims .................................................................... VII – 8Vocational Rehabilitation .......................................................... VII – 8Expenses Excluded from Losses.............................................. VII – 9

Incurred Medical................................................................................... VII – 10



v

SECTION VII – LOSS DATA continued… PAGE

Loss Class Code .................................................................................. VII – 14Injury Code........................................................................................... VII – 14Kind of Injury Code............................................................................... VII – 15-16Status................................................................................................... VII – 17

Loss Condition Act Code...................................................................... VII – 17Loss Condition Type of Loss ................................................................ VII – 18Loss Condition Type of Recovery......................................................... VII – 19-20Loss Condition Coverage ..................................................................... VII – 21Loss Condition Settlement Code .......................................................... VII – 22Jurisdiction State.................................................................................. VII – 22Catastrophe Code ................................................................................ VII – 23Managed Care Organization Type Indicator ......................................... VII – 24Social Security Number........................................................................ VII – 25Injury Description Code Part/Nature/Cause.......................................... VII – 25-33Occupation Description ........................................................................ VII – 33Vocational Indicator.............................................................................. VII – 34Lump Sum Indicator ............................................................................. VII – 35Fraudulent Claim Indicator ................................................................... VII – 35Deductible Indicator – Loss .................................................................. VII – 36Paid Indemnity ..................................................................................... VII – 36Paid Medical ........................................................................................ VII – 37Claimant’s Attorneys Fees ................................................................... VII – 37Employer’s Attorneys Fees .................................................................. VII – 38Paid Allocated Loss Adjustment Expense ............................................ VII – 38Incurred Allocated Loss Adjustment Expense ...................................... VII – 41Total Claim Count ................................................................................ VII – 41Total Incurred Indemnity....................................................................... VII – 41Total Incurred Medical.......................................................................... VII – 41Total Paid Indemnity ............................................................................ VII – 41Total Paid Medical................................................................................ VII – 41Total Paid ALAE................................................................................... VII – 41Total Incurred Claimant’s Attorneys Fees............................................. VII – 41Total Incurred Employers’ Attorneys Fees............................................ VII – 41

SECTION VIII – INDIVIDUAL CASE REPORTS

Reporting Requirements ...................................................................... VIII – 1General Information ............................................................................. VIII – 1Individual Case Report – Data Elements.............................................. VIII – 4

Class Code............................................................................... VIII – 4Report Number ......................................................................... VIII – 5Transaction Type Code ............................................................ VIII – 6Type of Injury Code .................................................................. VIII – 6



vi

SECTION VIII – INDIVIDUAL CASE REPORTS continued… PAGE

Carrier Code............................................................................. VIII – 6Carrier Name............................................................................ VIII – 7Exposure State ......................................................................... VIII – 7Administrative File Number....................................................... VIII – 7Policy Number .......................................................................... VIII – 8Certificate Number.................................................................... VIII – 8Policy Effective Date................................................................. VIII – 8Claim Number........................................................................... VIII – 9Status Code.............................................................................. VIII – 9Date of Attorney Disclosure ...................................................... VIII – 9Loss Condition Act Code .......................................................... VIII – 10Loss Condition Type of Loss..................................................... VIII – 10Loss Condition Type of Recovery ............................................. VIII – 10Loss Condition Coverage ......................................................... VIII – 11Loss Condition Settlement Code............................................... VIII – 11Jurisdiction State Code............................................................. VIII – 11Managed Care Organization Type ............................................ VIII – 12Insured’s Name ........................................................................ VIII – 12Accident Date ........................................................................... VIII – 12Date of Death ........................................................................... VIII – 13Date Reported .......................................................................... VIII – 13Date of Birth ............................................................................. VIII – 13Surgery Code ........................................................................... VIII – 14Attorney Code........................................................................... VIII – 14Workers’ Last Name ................................................................. VIII – 14Average Weekly Wage ............................................................. VIII – 15Injury Description Code-Part/Nature/Cause .............................. VIII – 15Occupation ............................................................................... VIII – 15Date Closed.............................................................................. VIII – 16Reserve Type Code.................................................................. VIII – 17Lump Sum Indicator.................................................................. VIII – 18Fraudulent Claim Indicator........................................................ VIII – 18Social Security Number ............................................................ VIII – 18Date Single Sum Paid............................................................... VIII – 19Employment Status................................................................... VIII – 19Year Last Exposed ................................................................... VIII – 119Date of Hire .............................................................................. VIII – 20Temporary Indemnity – Number of Weeks................................ VIII – 20Temporary Indemnity Incurred.................................................. VIII – 21Scheduled Indemnity Percent of Disability ................................ VIII – 21Scheduled Indemnity Body Member Code................................ VIII – 22Scheduled Indemnity-Number of Weeks................................... VIII – 22Scheduled Indemnity Incurred .................................................. VIII – 23Non-scheduled Indemnity – Percent of Disability ...................... VIII – 23Non-scheduled Indemnity Incurred ........................................... VIII – 24



vii

SECTION VIII – INDIVIDUAL CASE REPORTS continued… PAGE

Employers’ Liability or Other Indemnity ................................................ VIII – 24Vocational Rehabilitation Total Incurred ............................................... VIII – 25Claimant Legal Expenses Incurred....................................................... VIII – 25Physicians Paid.................................................................................... VIII – 25Hospital Paid........................................................................................ VIII – 26Applicants Medical Evaluation Paid...................................................... VIII – 26Defense Medical Evaluation Paid......................................................... VIII – 26Independent Medical Evaluation Paid .................................................. VIII – 27Legal Expense Defense Incurred ......................................................... VIII – 27Annuity Purchased Amount .................................................................. VIII – 28Total Gross Incurred ............................................................................ VIII – 28Temporary Disability Paid .................................................................... VIII – 28Permanent Partial Paid ........................................................................ VIII – 29Permanent Total Paid........................................................................... VIII – 29Death Paid ........................................................................................... VIII – 29Single Sum Paid................................................................................... VIII – 30Vocational Rehabilitation Paid.............................................................. VIII – 30Vocational Rehabilitation Indemnity Incurred........................................ VIII – 30Vocational Rehabilitation Training Incurred .......................................... VIII – 31Vocational Rehabilitation Evaluation Incurred ...................................... VIII – 31Beneficiary Data................................................................................... VIII – 32Beneficiary Date of Birth....................................................................... VIII – 33Benefit Calculations ............................................................................. VIII – 33Pension Indemnity Paid to Valuation Date............................................ VIII – 34Pension Indemnity Previously Reserved – Not Paid............................. VIII – 34Present Value Future Indemnity Payment ............................................ VIII – 35Funeral Allowance................................................................................ VIII – 34Lump Sum Re-marriage ....................................................................... VIII – 36Total Incurred Indemnity....................................................................... VIII – 36Total Incurred Medical.......................................................................... VIII – 36Total Indemnity Paid to Valuation Date ................................................ VIII – 37Total Medical Paid to Valuation Date.................................................... VIII – 37Social Security or Other Offset ............................................................. VIII – 37

SECTION IX – PENSION TABLE & EXAMPLES OF PENSION CLAIM CALCULATIONS

Pension Table I, Surviving Spouse-Fatal Claims .................................. IX – 1-8Pension Table II, Other than Surviving Spouse, Fatal Claims............... IX – 9-13Pension Table III, Permanent Total claimants’...................................... IX – 14-18Example 1 – Fatal Claim – Spouse & One Child .................................. IX – 19Example 2 – Fatal Claim – Spouse & One Child .................................. IX – 20-21Example 3 – Fatal Claim – Spouse & One Child .................................. IX – 22-23Example 4 – Fatal Claim – Other than Surviving Spouse ..................... IX – 24-25Example 5 – Fatal Claim – Other than Surviving Spouse ..................... IX – 26-27Example 6 – Fatal Claim – Other than Surviving Spouse ..................... IX – 28-29



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SECTION IX – PENSION TABLE & EXAMPLES OF PENSION CLAIM CALCULATIONS continued… PAGE

Example 7 – Permanent Total Claim.................................................... IX – 30Example 8 – Permanent Total Claim.................................................... IX – 31-32Example 9 – Permanent Total Claim.................................................... IX – 33-34

SECTION X – MAGNETIC TAPE INSTRUCTIONS

Tape Specifications.............................................................................. X – 1General Record Specifications ............................................................. X – 2

Record Type Codes.................................................................. X – 3Record Requirements............................................................... X – 4Multiple Effective Dates ............................................................ X – 4

Carrier Transmittal Letter ..................................................................... X – 5General..................................................................................... X – 5Sample-Magnetic Tape Transmittal .......................................... X – 6

Massachusetts Unit Statistical Data Elements for Magnetic Tape Submissions....................................................................................... X – 7-18

SECTION XI – FORMS

Unit Statistical Report USR-ASWG Form AUnit Statistical Supplemental Loss Report USR-ASWG Form BHard Copy Transmittal MATL – 1Magnetic Tape Transmittal MATL – 2Individual Case Report ICR-ASWG FormThree Year Fixed Rate Summarized Reporting Form MA3Y - 1

SECTION XII – DATA QUALITY INCENTIVE PROGRAM

Introduction .................................................................................................. XII – 1Timeliness of Unit Statistical Data ................................................................ XII – 1-4Timeliness of Coverage Data......................................................................... XII – 4-6Accuracy of Unit Statistical Data .................................................................. XII – 6-9Appeal of Penalties Levied Under the Data Quality Incentive Program ...................................................................................................... XII - 9


Effective: January 1, 2000 Section XIIDistributed: August, 2000 DATA QUALITY INCENTIVE PROGRAM

Page 1

A. Introduction

The Data Quality Incentive Program was developed in response to an order of theCommissioner of Insurance to ensure that the unit statistical data is reported promptly andaccurately as required by this Plan. A committee of Bureau staff and several carrierrepresentatives worked to modify other jurisdictions’ existing plans to suit the needs ofMassachusetts.

The reports and tools described in this section will be available in electronic format after theimplementation of the Data Quality Incentive Program.

B. Timeliness of Unit Statistical Data

The promptness of unit statistical reporting is based on the policy effective date, so thereporting and penalty determination will also be based on the number of months past theeffective and due dates of the units.

1. Expected Unit Report

During the 14th month from the effective date of the policy, the Bureau will distributereports of the policies on our files to notify the carriers of the policy information, whereunit statistical reports are expected within the next 6 months. Carriers can minimizethe risk of fines by reviewing the Expected Unit Report to see that the policy number,effective date and carrier codes are accurate as well as submitting to the Bureau anypolicy, or coverage transactions that are absent from the report.

Although, there will be no obligation for carriers to respond to the Expected UnitReport, the Expected Unit Report can be treated as a turn around document. A turnaround document in either paper or electronic media is a report the Bureau makesavailable to the carriers and where the carriers can respond on the document withappropriate codes and information. The response will be recorded in the Bureau’sfiles. The appropriate response and corrective action may prevent an overdue unitreport and fines. However, coverage verification issues can only be corrected with theappropriate coverage transactions.

The response codes are as follows:

Response Code Description Corrective Action

DEE Bureau data entry error onpolicy information

Attach copy of policy orendorsement showing correctdata

PFC Policy flat canceled Attach copy of cancellationnotice

PNT Policy not taken Attach copy of cancellation ornon renewal notice


Section XII Effective: January 1, 2000DATA QUALITY INCENTIVE PROGRAM Distributed: August, 2000Page 2

Bureau will notify the carrier if the corrective action did not resolve the overdue unitreport issue.

Report Distribution Example: A policy effective any day during January, 2000 willappear on the Expected Unit Report distributed in March, 2001.

2. Overdue Unit Report

During the 21st month from the policy effective date the Bureau will distribute theOverdue Unit Report. Carriers must respond to the Overdue Unit Report within 30calendar days or be subject to fines. It is possible for policies to have missed theOverdue Unit Report distributed in the 21st month and to therefore appear on anOverdue Unit Report within any given month more than 21 months after the policyeffective date. For example if the policy is received during the 25th month after thepolicy effective date the policy would appear on a later Overdue Unit Report. Also ifcorrections remove a unit report from our files the policy might appear on a laterOverdue Unit Report.

The Overdue Unit Report can also be treated as a turn around document. Theappropriate response and corrective action may resolve the overdue unit reportsituation and prevent fines. However, coverage verification issues can only becorrected with the appropriate coverage transactions.



UPS Unit report previously sent Attach copy of unit reportDEE Bureau data entry error on

policy informationAttach copy of policy orendorsement showing correctdata



OTH Another situation notaccounted for above

Attach brief explanation ofthe circumstances

Bureau will notify the carrier if the corrective action will not resolve the overdue unitreport issue.

It is possible for items to appear for the first time on the Overdue Unit Report withoutappearing on the Expected Unit Report. Policies received after the 14th month will beon the Overdue Unit Report but not the Expected Unit Report. If between the 18th and21st months either the unit report was removed (offset) or the unit report’s link datawas changed, the policy may appear for the first time on the Overdue Unit Report. The



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unit report link data is policy id number, policy effective date, carrier code, andexposure state.

Report Distribution Example: A policy effective any day during January, 2000 withoutcorresponding statistical data will appear on the Overdue Unit Report distributed inOctober, 2001.

3. First Overdue Unit Fine Report

Thirty (30) calendar days after the distribution of the Overdue Unit Report, a FirstOverdue Unit Fine Report will be distributed and unit reports still overdue will besubject to a fine based on the risks rating status. Rated risks will be fined $100, andnon-rated risks will be fined $50. A rated risk, is a risk that has had any type of ratingat any time within the three years prior to the policy effective date of the missing unitreport. A rating could be intrastate merit or experience rated as well as interstaterated.

All policies on the First Overdue Unit Fine Report must have been on an Overdue UnitReport.

The First Overdue Unit Fine Report can also be used as a turn around document toprevent additional fines. The appropriate response and corrective action may resolvethe overdue unit report situation and prevent fines. However, coverage verificationissues can only be corrected with the appropriate coverage transactions. Also note thatcorrective action following distribution of the First Overdue Unit Fine Report mayprevent additional penalties but will not eliminate this first penalty charge.

Response codes are as follows:


UPS Unit report previously sent Attach copy of unit reportDEE Bureau data entry error on

policy informationAttach copy of policy orendorsement showing correctdata





If corrective action was taken based on a prior fine report and the carrier was notnotified of a problem with the correction, please contact the Bureau in accordance withthe appeals process outlined in Section E.



Report Distribution Example: A policy effective any day during January, 2000 withoutcorresponding statistical data will appear on the Overdue Unit Report distributed inOctober, 2001, and if the unit report or corrective action is not received in 30 days thepolicy will appear on the First Overdue Unit Fine Report distributed in November,2001.

4. Follow-up Fine Reports

Policies that appear on the First Overdue Unit Fine Report that are not resolved within30 calendar days of the distribution of the First Overdue Unit Fine Report will be finedeach month until the unit report is submitted or the issue is resolved. Rated risks will befined $100 per month, and non-rated risks will be fined $50 per month. A rated risk, isa risk that has had any type of rating at any time within the three years prior to thepolicy effective date of the missing unit report. A rating could be intrastate merit orexperience rated as well as interstate rated.

All policies on a Follow-up Fine Report must have appeared on the First Overdue UnitFine Report.

If a policy appears on a Follow-up Fine Report even though corrective action wastaken based on a prior fine report, and the carrier was not notified of a problem withthe correction, please contact the Bureau in accordance with the appeals processoutlined in Section E.

Payment of the additional monthly fines does not relieve the carrier of the obligation toreport the statistical data. If data is needed for either an experience rating or for ratemaking, Bureau staff will continue to pursue the data.

Report Distribution Example: A policy effective any day during January, 2000 withoutcorresponding statistical data, will appear on the Overdue Unit Report distributed inOctober, 2001, and the First Overdue Unit Fine Report which is distributed inNovember, 2001 and continue to appear monthly on the Follow-up Fine Reports untilthe unit report or corrective action is received.

C. Timeliness of Coverage Data

1. Units without Corresponding Policies Report

Reports of unit statistical data without previously submitted policy data will bedistributed to the carriers on a regular basis. These reports will provide carriers theopportunity to provide the missing policy and coverage information.

Fines are not implemented at this time. Charges will be levied if the reporting ofcoverage does not improve with the distribution reports described in this section.



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The Units without Corresponding Policies Report can be treated as a turn arounddocument. The appropriate response and corrective action will resolve missing data inthe statistical database. However, coverage verification issues can only be correctedwith the appropriate coverage transactions.



PRS Policy previously submitted Attach copy of PolicyDEE Bureau data entry error on

unit report informationAttach copy of unit report

EXP The unit report is a segmentof an extended or 3 yearpolicy

Note policy #, effective date,and policy period effectivedate on the fine report

MAE Endorsement or audit addingMassachusetts after policyeffective date

Attach copy of endorsementor audit along with originalpolicy declarations page



Bureau will notify the carrier if the corrective action did not resolve the issue.

2. Preliminary Report for Units without Corresponding Policies

Items on the Units without Corresponding Policies Report that remain unresolved formore than 60 days will appear on the Preliminary Report for Units withoutCorresponding Policies. All carriers will receive a Preliminary Report for Unitswithout Corresponding Policies to advise the carriers of the reporting situation.

The Preliminary Report for Units without Corresponding Policies can also be treatedas a turn around document. The appropriate response and corrective action willresolve the missing data in the statistical database. However, coverage verificationissues can only be corrected with the appropriate coverage transactions.





PRS Policy previously submitted Attach copy of PolicyDEE Bureau data entry error on

unit report informationAttach copy of unit report

EXP The unit is a segment of anextended or 3 year policy

Note policy #, effective date,and policy period effectivedate on the fine report

MAE Endorsement or audit addingMassachusetts after policyeffective date

Attach copy of endorsementor audit along with originalpolicy declarations page




3. Final Report for Units without Corresponding Policies

A Final Report for Units without Corresponding Policies will be issued which lists theunit reports that remain unmatched to a corresponding policy 60 days after thedistribution of the Preliminary Report for Units without Corresponding Policies.

All unit reports on the Final Report for Units without Corresponding Policies musthave been on the Preliminary Reports for Units without Corresponding Policies.

D. Accuracy of Unit Statistical Data

1. Unit Error Reports

a. Error reports, unit report criticisms, and correction requests will be distributedat least monthly to the reporting carriers. The following listed errors impacteither the experience rating or the rate making process and are subject to afine:

i. An invalid Exposure or Loss Class Code

ii. An invalid Policy Number such as all or imbedded blanks, or specialcharacters within the policy number

iii. An Accident Date which is outside of the Policy Term

iv. Either an invalid Plan Type or a Plan Type which is inconsistent withpolicy information



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v. A unit report term (policy effective to unit report expiration) which islonger than 1 year and 16 days

vi. An invalid Injury Kind

vii. Indemnity incurred loss amounts on fatal or permanent total claimsthat do not reflect the appropriate benefit calculation.

It should be noted that several data elements from the Individual CaseReport of the claim are needed to complete this edit. Average WeeklyWage, Beneficiary Codes, Pension Indemnity Paid to Valuation dateand Present value Future Indemnity Payment are examples of datarequired from the ICR.

Refer to Section VIII for ICR reporting definitions and instructions.Refer to Section IX for the appropriate pension table.

b. The error report can be treated as a turn around document with response codeswritten next to the applicable unit reports. The response codes are as follows:


CPS Correction previouslysubmitted

Attach copy of correction

DEE Bureau data entry error onunit report information

Attach copy of the unit report

BED The Bureau edit is incorrect Attach a brief explanation ofwhy the edit is incorrect

CAT Correction attached Attach hardcopy correctionreport

CED Correction will be sentelectronically

Place correction in nextelectronic submission. Notedate of submission andapplicable tape or submissionnumbers




2. Preliminary Error Fine Report

Unit report errors that remain unresolved for more than 30 days will appear on thePreliminary Error Fine Report. The Preliminary Error Fine Report is the lastopportunity for a carrier to correct finable errors prior to the penalty.



The Preliminary Error Fine Report can also be treated as a turn around documentwith response codes written next to the applicable unit reports.



CPS Correction previouslysubmitted

Attach copy of correction

DEE Bureau data entry error onunit report information

Attach copy of the unit report

BED The Bureau edit is incorrect Attach a brief explanation ofwhy the edit is incorrect

CAT Correction attached Attach hardcopy correctionreport

CED Correction will be sentelectronically

Place correction in nextelectronic submission. Notedate of submission andapplicable tape or submissionnumbers



All unit reports on the Preliminary Error Fine Report must have previously appearedon the Unit Error Reports.

Report Distribution Example: all unit reports processed into the Bureau’s files in July,2001 appear on the suitable error reports and unit report criticism letters by August 7,2001. Uncorrected unit errors will appear on the Preliminary Error Fine Reportbetween October 7, 2001 and October 14, 2001.

3. Subsequent Monthly Unit Error -Fine Report

Unit reports with the identified errors which remain uncorrected 30 days after thedistribution of the Preliminary Error Fine Report will appear on the SubsequentMonthly Unit Error Fine Report until the error is corrected. These uncorrected unitreport errors will be subject to a monthly fine of $50 for non-rated risks and $100 forrated risks. A rated risk, is a risk that has had any type of rating at any time within thethree years prior to the policy effective date of the missing unit report. A rating couldbe intrastate merit or experience rated as well as interstate rated.

All unit reports on the fine list must have been on the Preliminary Error Fine Report.

The Unit Error Fine Report can be used as a turn around document to correct errors,but corrective action following distribution of each Subsequent Monthly Unit ErrorFine Report will not prevent the penalty charge.



Page 9

If a unit report appears on Subsequent Monthly Unit Error Fine Report even thoughcorrective action was taken and the carrier was not notified of a problem with thecorrection, please contact the Bureau in accordance with the appeals process outlinedin Section E.

Payment of an error fine does not relieve the carrier of the obligation to correct thestatistical data. If data is needed for either an experience rating or for rate making,Bureau staff will continue to pursue the necessary correction.

Report Distribution Example: all unit reports processed into the Bureau’s files in July,2001 appear on the suitable error reports and unit report criticism letters by August 7,2001. Uncorrected unit report errors appear on the Preliminary Error Fine Reportbetween October 7, 2001 and October 14, 2001. Errors that remain uncorrected 30calendar days after distribution of the Unit Error Fine Report and are subject toadditional penalties and will appear on Subsequent Monthly Unit Error Fine Reportsuntil the error is corrected.

E. Appeal of Penalties Levied under the Data Quality Incentive Program

If an item appears on a fine report, which in the opinion of the carrier should not be subject toa fine, the carrier should contact the Data Quality Services Department to the attention of theunit appeal process.

Copies of all pertinent written communication and a brief explanation of the circumstancesshould be provided in a written request to waive the fine.

Examples of situations where fines may be waived are as follows:

1. The carrier corrected the situation prior to distribution of the fine report.

2. The Bureau has made an error in assigning the fine to the carrier.

3. The carrier was not provided proper notification that a penalty situation was pending.

4. The carrier cannot provide or correct statistical data due to circumstances beyond theircontrol such as fire or natural disaster.

If the carrier is not satisfied with the results of the appeal to the Bureau, then the carrier canmake a written request to put the appeal before the Bureau’s Governing Committee AppealsSubcommittee. Bureau staff will schedule a review at the next meeting of AppealsSubcommittee.

THE WORKERS’ COMPENSATION RATING & INSPECTION BUREAU OF MA

Effective: January 1, 2000 INDEXDistribute: August, 2000 Page 1

- A -

Accident Date .................................................................................................. VII - 3Accident Date (Individual Case Report) ........................................................... VIII - 10Adjustment of Losses Between Valuations ...................................................... III - 3Adjustment to Premium Due from Flat Increases............................................. IV - 1Administrative File Number.............................................................................. VIII - 7Aggravated Inequity......................................................................................... III - 2Aircraft Operations-Passenger Seat................................................................. IV - 1All Risk Adjustment Program ........................................................................... IV - 1Alphabetical List of Statistical Classes ............................................................. IV - 1Annuity Purchased Amount ............................................................................. VIII - 28Anticipation of Recovery from Second Injury Fund........................................... III - 2Appeal of Penalties Levied Under the Data Quality Incentive Program .................... XII - 9Applicants Medical Evaluation Paid ................................................................. VIII - 26Attorney Code (Individual Case Report)........................................................... VIII - 14Average Weekly Wage .................................................................................... VIII - 15

- B -

Benefit Calculations ......................................................................................... VIII - 33Beneficiary Data .............................................................................................. VIII - 32Beneficiary Date of Birth .................................................................................. VIII - 33

- C -

Card Serial Number ......................................................................................... V - 14Carrier Code .................................................................................................... V - 6Carrier Code (Individual Case Report) ............................................................. VIII - 6Carrier Name................................................................................................... VIII - 7Carrier Transmittal Letter ................................................................................. X - 5Canceled Indicator........................................................................................... V - 20Catastrophe Code............................................................................................ VII - 23Certificate Number (Individual Case Report).................................................... VIII - 8Certificate Number........................................................................................... V - 14Claim Number.................................................................................................. VII - 2Claim Number (Individual Case Report)........................................................... VIII - 9Claimant’s Attorney Fees................................................................................. VII - 37Claimant Legal Expenses Incurred .................................................................. VIII - 25Class Code...................................................................................................... VI - 2Class Code (Individual Case Report) ............................................................... VIII - 4Completion of Change in the Audit .................................................................. III - 2Construction Classification Premium Adjustment Program .............................. IV - 2Correction of Correction Sequence Number .................................................... III - 13, 14Correction Number .......................................................................................... V - 3Correction of Report Number........................................................................... III - 16, 17Correction Type ............................................................................................... V - 5Corrections of Policy ID Number for All Report Levels ..................................... III - 9, 10Corrections of Policy ID Number for One Report (Valuation Level) .................. III - 11, 12


INDEX Effective: January 1, 2000Page 2 Distributed: August, 2000

- D -

Date Closed..................................................................................................... VIII - 16Date of Attorney Disclosure ............................................................................. VIII - 9Date of Birth..................................................................................................... VIII - 13Date of Death .................................................................................................. VIII - 13Date of Hire ..................................................................................................... VIII - 20Date of Valuation and Filing............................................................................. II - 3Date Reported ................................................................................................. VIII - 13Date Single Sum Paid...................................................................................... VIII - 19Death and Permanent Total Claims ................................................................. VII - 5Death Paid....................................................................................................... VIII - 29Deductible Amount Aggregate ......................................................................... V - 24Deductible Amount Per Claim/Accident ........................................................... V - 24Deductible Indicator - Loss .............................................................................. VII - 36Defense Medical Evaluation Paid .................................................................... VIII - 26Deductible Percent .......................................................................................... V - 24Deductible Type............................................................................................... V - 23

- E -

Employer’s Attorneys Fees .............................................................................. VII - 38Employers’ Liability Increased Limits ............................................................... IV - 4Employers’ Liability or Other Indemnity............................................................ VIII - 24Employment Status.......................................................................................... VIII - 19Errors............................................................................................................... III - 1Estimated Exposure Indicator .......................................................................... V - 19Examples of Header Corrections ..................................................................... III - 19-23Example 1 - Fatal Claim - Spouse & One Child ............................................... IX - 19Example 2 - Fatal Claim - Spouse & One Child ............................................... IX - 20, 21Example 3 - Fatal Claim - Spouse & One Child ............................................... IX - 22, 23Example 4 - Fatal Claim - Other Than Surviving Spouse ................................. IX - 24, 25Example 5 - Fatal Claim - Other Than Surviving Spouse ................................. IX - 26, 27Example 6 - Fatal Claim - Other Than Surviving Spouse ................................. IX - 28, 29Example 7 - Permanent Total Claim ................................................................ IX - 30Example 8 - Permanent Total Claim ................................................................ IX - 31, 32Example 9 - Permanent Total Claim ................................................................ IX - 33, 34Expected Unit Report................................................................................................. XII - 1Expense Constant ........................................................................................... IV - 6Expense Constant Amount .............................................................................. VI - 10Expenses Excluded from Losses ..................................................................... VII - 9Expenses Included in Losses .......................................................................... VII - 6Experience Modification Factor........................................................................ VI - 7Experience Under the National Defense Projects Rating Plan ......................... II - 9Exposure Amount ............................................................................................ VI - 3Exposure Coverage Act ................................................................................... VI - 2Exposure State ................................................................................................ V - 12Exposure State (Individual Case Report) ......................................................... VIII - 7



- F -

Federal Employers’ Identification Number (FEIN) ............................................ V - 17Filings Due....................................................................................................... II - 4Final Report for Units Without Corresponding Policies ............................................ XII - 6First Overdue Unit Fine Report................................................................................. XII - 3First Reports .................................................................................................... II - 3Follow-up Fine Reports ............................................................................................. XII - 4Form of Report ................................................................................................ II - 2Forms Must be Typed...................................................................................... II - 6Formerly Self-Insured Deposit Adjustments..................................................... III - 2Fraction of Dollars............................................................................................ II - 5Fraudulent Claim Indicator............................................................................... VII - 35Funeral Allowance ........................................................................................... VIII - 35

- G -

General Information (Individual Case Report) .................................................. VIII - 1General Instructions......................................................................................... II - 1General Record Specifications......................................................................... X - 2Group Claim Option ......................................................................................... II - 5

- H -

Hard Copy Transmittal ..................................................................................... Section XIHeader Correction for Expiration Date ............................................................. III - 25Header Correction for Multi-state Indicator....................................................... III - 24Hospital Paid ................................................................................................... VIII - 26

- I -

Incurred Allocated Loss Adjustment Expense .................................................. VII - 41Incurred Indemnity ........................................................................................... VII - 4Incurred Medical .............................................................................................. VII - 10Independent Medical Evaluation Paid.............................................................. VIII - 27Individual Case Report .................................................................................... VIII - 4Individual Case Report (ICR-ASWG Form) ...................................................... Section XIInformation for Examples ................................................................................. III - 5-8Injury Code ...................................................................................................... VII - 14Injury Description Code Part/Nature/Cause ..................................................... VII - 25-33Insured’s Address............................................................................................ V - 16Insured’s Name ............................................................................................... V - 16Interstate Indicator ........................................................................................... V - 19Introduction...................................................................................................... I - I

- J -

Jurisdiction State ............................................................................................. VII - 22Jurisdiction State Code.................................................................................... VIII - 11


INDEX Effective: July 1, 1997Page 4 Distributed: August, 2000

- K -

Kind of Injury Codes ........................................................................................ VII - 15-16

- L -

Last Page Number........................................................................................... V - 16Legal Expense Defense................................................................................... VIII - 27Levels .............................................................................................................. III - 9, 10Loss Class Code.............................................................................................. VII - 14Loss Constant.................................................................................................. IV - 7Loss Condition Act Code ................................................................................. VII - 17Loss Condition Act Code (Individual Case Report) .......................................... VIII - 10Loss Condition Coverage................................................................................. VII - 21Loss Condition Coverage (Individual Case Report).......................................... VIII - 11Loss Condition Settlement Code...................................................................... VII - 22Loss Condition Settlement Code (Individual Case Report)............................... VIII - 11Loss Condition Type of Loss............................................................................ VII - 18Loss Condition Type of Loss (Individual Case Report)..................................... VIII - 10Loss Condition Type of Recovery .................................................................... VII - 19, 20Loss Condition Type of Recovery (Individual Case Report) ............................. VIII - 10Lump Sum Claims ........................................................................................... VII - 8Lump Sum Indicator......................................................................................... VII - 35Lump Sum Indicator (Individual Case Report).................................................. VIII - 18Lump Sum Re-marriage................................................................................... VIII - 35

- M -

Magnetic Tape Transmittal (ICR-ASWG Form)................................................ Section XIManaged Care Organization Indicator ............................................................. V - 21Managed Care Organization Type ................................................................... VIII - 12Managed Care Organization Type ................................................................... VII - 24Manual Rate .................................................................................................... VI - 5Massachusetts Unit Statistical Date Elements for Magnetic Tape Submissions .................................................................................................. X - 7-18Merit Rating ..................................................................................................... IV - 7Method of Reporting Corrections and Revaluation’s ........................................ III - 3Method of Transmittal ...................................................................................... II - 6Minimum Premium........................................................................................... IV - 7Modification Effective Date .............................................................................. V - 17Multi-state Indicator ......................................................................................... V - 19



- N -

Non-Compensable Claims ............................................................................... III - 1Non-Ratable Elements..................................................................................... IV - 8Non-Scheduled Indemnity Incurred.................................................................. VIII - 24Non-Scheduled Indemnity-Percent of Disability ............................................... VIII - 23Numeric List of Statistical Classes ................................................................... IV - 11-14Number of Claims ............................................................................................ VII - 3

- O -

Occupation Description.................................................................................... VII - 33Occupation ...................................................................................................... VIII - 15Other Multiple Year Policies............................................................................. II - 8Other Than Government Agency Atomic Energy Projects................................ II - 10Overdue Unit Report.................................................................................................. XII - 2

- P -

Page Number .................................................................................................. V - 15Paid Allocated Loss Adjustment Expense........................................................ VII - 38-40Paid Indemnity................................................................................................. VII - 36Paid Medical .................................................................................................... VII - 37Penalties for Delays in Making Compensation Payments ................................ VII - 8Pension Indemnity Paid to Valuation Date ....................................................... VIII - 34Pension Indemnity Previously Reserved - Not Paid ......................................... VIII - 34Pension Table I, Surviving Spouse-Fatal Claims.............................................. IX - 1-8Pension Table II, Other Than Surviving Spouse-Fatal Claim............................ IX - 9-13Pension Table III, Permanent total Claimants’ ................................................. IX - 14-18Permanent Partial Paid.................................................................................... VIII - 29Permanent Total Paid ...................................................................................... VIII - 29Physicians Paid ............................................................................................... VIII - 25Policy Effective Date........................................................................................ V - 9Policy Expiration Date...................................................................................... V - 11Policy Effective Date (Individual Case Report)................................................. VIII - 8Policy Number ................................................................................................. V - 7Policy Number (Individual Case Report) .......................................................... VIII - 8Policy Type Identification Code........................................................................ V - 22Preliminary Error Fine Report .................................................................................. XII - 7Preliminary Report for Units Without Corresponding Policies.................................. XII - 5Premium Amount ............................................................................................. VI - 5Premium Discount ........................................................................................... IV - 3Premium Discount Amount .............................................................................. VI - 10Previous Carrier Code ..................................................................................... V - 7Previous Correction Number............................................................................ V - 4Previous Exposure State ................................................................................. V - 13Previous Policy Effective Date ......................................................................... V - 10Previous Policy Number................................................................................... V - 8Previous Report Number ................................................................................. V - 2


INDEX Effective: January 1, 2000Page 6 Distributed: August, 2000

Present Value Future Indemnity Payment........................................................ VIII 32

- Q -

Qualified Loss Management Program Premium Credit .................................... IV - 9

- R -

Radiation Exposure ......................................................................................... IV - 9Radiation Exposure-Government Agency Atomic Energy Projects .................. II - 10Rate Deviation Credit....................................................................................... IV - 10Rate Effective Date.......................................................................................... V - 18Receipt of Subrogation Recovery from a Third Party ....................................... III - 2Record Requirements...................................................................................... X - 4Record Type Codes......................................................................................... X - 3Reinsurance .................................................................................................... II - 5Replacement Report Indicator ......................................................................... V - 6Report Number (Individual Case Reports) ....................................................... VIII - 5Report Number ................................................................................................ V - 1Reporting of Reimbursement from a Special Fund........................................... VII - 6Reporting Requirements.................................................................................. VIII - 1Retrospective Rated and Interstate Experience Rated Risks ........................... II - 3Retrospective Rating Indicator ......................................................................... V - 20Revaluation’s ................................................................................................... III - 3Revision of Losses........................................................................................... II - 4Reserve Type Code......................................................................................... VIII - 17Risk Identification Number ............................................................................... V - 15

- S -

Sample Magnetic Tape Transmittal.................................................................. X - 6Scope of Report............................................................................................... II - 1Scheduled Indemnity Body Member Code....................................................... VIII - 22Scheduled Indemnity Incurred ......................................................................... VIII - 23Scheduled Indemnity Number of Weeks .......................................................... VIII - 22Scheduled Indemnity Percent of Disability ....................................................... VIII - 21Short Rate Penalty Premium ........................................................................... IV - 10Single Sum Paid .............................................................................................. VIII - 30Social Security Number ................................................................................... VII - 25Social Security Number (Individual Case Reports)........................................... VIII - 16Social Security or Other Offset......................................................................... VIII - 37Special Rules for Reporting Disease Experience............................................. II - 8, 9Status .............................................................................................................. VII - 17Status Code..................................................................................................... VIII - 9State Effective Date ......................................................................................... V - 13Strike Duty Premium Surcharge....................................................................... IV - 10Subrogation ..................................................................................................... VII - 8Subsequent Monthly Unit Error Fine Report ............................................................ XII - 8Subsequent Reports ........................................................................................ II - 3



Summarized Basis........................................................................................... II - 7Surgery Code .................................................................................................. VIII - 14

- T -

Tape Specifications ......................................................................................... X - 1Temporary Indemnity - Number of Weeks........................................................ VIII - 20Temporary Disability Paid ................................................................................ VIII - 28Temporary Indemnity Incurred......................................................................... VIII - 21Three Year Fixed Rate Indicator ...................................................................... V - 18Three Year Fixed Rate Policies ....................................................................... II - 6Three Year Fixed Rate Summarized Reporting Form (MA3Y-1) ...................... Section XITotal Claim Count ............................................................................................ VII - 41Total Gross Incurred ........................................................................................ VIII - 28Total Incurred Indemnity .................................................................................. VII - 41Total Incurred Medical ..................................................................................... VII - 41Total Modified Premium................................................................................... VI - 7Total Paid ALAE .............................................................................................. VII - 41Total Paid Indemnity ........................................................................................ VII - 41Total Paid Medical ........................................................................................... VII - 41Total Standard Exposure ................................................................................. VI - 8Total Standard Premium.................................................................................. VI - 9Total Subject Premium..................................................................................... VI - 6Total Incurred Claimant’s Attorney Fees .......................................................... VII - 41Total Incurred Employers’ Attorney Fees ......................................................... VII - 41Total Incurred Indemnity (Individual Case Reports) ......................................... VIII - 36Total Incurred Medical (Individual Case Reports)............................................. VIII - 36Total Indemnity Paid to Valuation Date ............................................................ VIII - 3Total Medical Paid to Valuation Date ............................................................... VIII - 3Transaction Type Code.................................................................................... VIII - 37Type of Injury Code ......................................................................................... VIII - 37

- U -

Uncollectible Premiums ................................................................................... II - 5Unemployment or Emergency Relief Employees ............................................. II - 10Unit Error Reports..................................................................................................... XII - 6Unit Reporting Basis-Hard Copy of Electronic Submissions............................. II - 6Unit Statistical Report (USR-ASWG Form A) ................................................... Section XIUnit Statistical Supplemental Loss Report (USR-ASWG Form B) .................... Section XIUnits Without Corresponding Policies Report ........................................................... XII - 4Update Type (Exposure Record) ..................................................................... VI - 1Update Type (Loss Data)................................................................................. VII - 1


INDEX Effective: July 1, 1997Page 8 Distributed: August, 2000

- V -

Validity of the Unit Report ................................................................................ II - 1Vocational Indicator ......................................................................................... VII - 34Vocational Rehabilitation ................................................................................. VII - 8Vocational Rehabilitation Evaluation Incurred .................................................. VIII - 31Vocational Rehabilitation Indemnity Incurred ................................................... VIII - 30Vocational Rehabilitation Paid ......................................................................... VIII - 30Vocational Rehabilitation Total Incurred........................................................... VIII - 25Vocational Rehabilitation Training Incurred...................................................... VIII - 31

- W -

Waiver of Subrogation ..................................................................................... IV - 10Workers’ Last Name ........................................................................................ VIII - 14

- Y -

Year Last Exposed .......................................................................................... VIII - 19

MASSACHUSETTS WORKERS’ COMPENSATIONAGGREGATE FINANCIAL DATA CALL

Effective: January 1, 2000Distributed: August, 2000 DATA QUALITY INCENTIVE PROGRAM

Page 1

A. Introduction

Over the past several years there has been a significant decrease in the promptness andaccuracy of the data reported under the annual call for experience. The result is that theavailability of the compiled data is delayed or the final data contains errors or omissions,which must be acknowledged and explained in the rate filing.

The Data Quality Incentive Program is a means to encourage the prompt and accuratereporting of the year end data. The fines levied under the program will also direct a portion ofthe data correction costs to the carriers with reporting difficulties.

The Data Quality Incentive Program will be reviewed and may be revised in the future ascircumstances warrant. Edits will be added and revised as areas of improvement are identified.The penalty amounts will be adjusted as reporting options are improved and as incentives areneeded.

The Massachusetts Workers Compensation Financial Data Call Package (Annual Call)contains the data call forms, definitions of the data elements, and reporting instructionsreferred to in this program.

B. Calendar Year Bureau Standard Earned Premium

The Calendar Year Bureau Standard Earned Premium used in the program cap anddisciplinary fine is based on the prior calendar year data calls. For example the program capsand disciplinary fines levied on the data valued 12/2000 is based on the Bureau StandardEarned Premium reported on the data calls valued 12/1999. The Calendar Year BureauStandard Earned Premium is the sum of the Calendar Year Total (line Z) Bureau StandardPremium( first data column) from the Policy Year, Large Deductible by Policy Year and “F”Class calls. The sum of these amounts is also recorded on page 2 line 4 of the MassachusettsReconciliation report. Refer to the Policy Year Call (call #3) the “F” Class Call (call #14), andthe Reconciliation Report (call #15) in the Annual Call.

C. Program Penalty Cap

The penalty on each data call is limited to the lesser of $5000 or .001 (.1%) of the reportingcarrier or group’s Bureau Standard Earned Premium. The total fine for all calls is limited tothe smaller of $ 40,000 or .005 (.5%) of the Calendar Year Bureau Standard Earned Premium.The penalty cap applies to the sum of the timeliness and accuracy fines but does not apply tothe disciplinary fine.

D. Timeliness of Aggregate Financial Data

1. The Policy Year Call, the Accident Year Call, the Expense Call, the Direct WrittenPremium for Voluntary Direct Assigned Risk Experience, the Large DeductibleWritten Experience, the Assigned Risk United States Longshore and Harbor WorkersAct Data, and the Assigned Risk Large Claim Call are identified as the most important


Effective: January 1, 2000DATA QUALITY INCENTIVE PROGRAM Distributed: August, 2000Page 2

of the annual data calls. These essential calls are subject to a fine of $100 per daywhen more than 10 business days overdue. Refer to the Policy Year Call (call #3),Accident Year Call (call #10), Calendar Expense Data (call #16), Direct WrittenPremium for Voluntary Assigned Risk Experience (call #1), Large Deductible WrittenExperience (call #6), Assigned Risk United States Longshore and Harbor Workers Act(call #9), and Assigned Risk Large Claim Call (call #8).

2. The remaining 13 data calls in this call package are subject to a fine of $25 per daywhen more than 10 business days overdue.

3. Carriers will be notified of overdue submissions when the data is five, ten, and twentybusiness days overdue and again when the data is thirty business days overdue.

E. Accuracy of the Aggregate Financial Data

1. Each occurrence of the following basic errors on each data call is subject to a $100fine. Refer to the Annual Call, Section V for data element definitions.

a. Negative Totals

Negative amounts reported in policy year premium values, policy or accidentyear paid loss values, or policy or accident year case reserves. The edit appliesto each of the fields on the policy and accident year calls that require aggregatetotals. For example, since years prior to 1989 are optional on the residualmarket calls, policy year and accident year 1985 on the residual market datacalls would not be subject to the “Negative Total” edit.

Calendar year values are not subject to this edit.

Premium credits, bulk reserves, and incurred but not reported are not subjectto this edit.

b. Losses without Corresponding Premium

Paid loss or case reserves reported in any accident or policy year without acorresponding policy year premium.

Example a: Policy Year 1995 Indemnity Paid loss of $5,233 reported withPolicy Year 1995 Standard Premium at Company Level reported as $0 is anerror.

Example b: Accident Year 1995 Indemnity Paid loss of $2,344 reported withboth Policy Years 1994 and 1995 Standard Premium at Company Levelreported as $0 is an error.



Page 3

c. Incurred Loss Total Does Not Balance

An accident or policy year Total Incurred Loss that is not equal to the sum ofthe loss components. Total Incurred Losses not equal to Indemnity Paid +Indemnity Case + Indemnity Bulk + Indemnity Incurred But Not Reported +Medical Paid + Medical Case + Medical Bulk + Medical Incurred But NotReported is an error.

d. Column Total Does Not Balance

For any column that requires full aggregate reporting Line X total (aggregateto 12/31 of the year for which the call is being prepared) is not equal to the sumof Lines A through W.

e. Indemnity Loss Amount and Claim Count Conflict

Zero Indemnity Claim Count with non-zero indemnity paid or case reserves isan error. Also zero indemnity paid, and zero indemnity case with non-zeroIndemnity Claim Count is an error.

Example a: 1997 Policy Year Indemnity Claim Count of 0 reported with eithera non-zero 1997 Policy Year Indemnity Paid or a non-zero 1997 Policy YearIndemnity Case is an error.

Example b: 1995 Accident Year Indemnity Claim Count of 156 reported withzeros in both 1995 Accident Year Indemnity Paid and Indemnity Case is anerror.

2. The data calls are edited to ensure consistency between the calls, reasonableness in thechange between valuations and consistency of related data contained in the calls.These edits are generally termed “actuarial edits”. Edit failures do not necessarilyindicate incorrect data. If values fall outside of the expected parameters, furtherinvestigation is needed to verify the accuracy of the data, and to provide an explanationof why the data falls outside of the norm.

Since the Policy Year Data and Accident Year Data are extremely important to theData Quality Incentive Program, failure to respond to the Bureau’s notification of anactuarial edit failure within 20 business days will result in a daily fine of $100 until anadequate response is submitted.

An adequate response is a correction to the data that eliminates the actuarial editfailure or a written explanation of the situation. The explanation must describe thecircumstances that caused the anomaly and satisfy the Bureau’s actuarial staff of theaccuracy of the reported data. Explanations that simply identify the source of the errorwill not prevent the fine. Verification of the accuracy of the reported data without



sufficient written detail to allow for the Bureau’s evaluation will not prevent the fine.Refer to the Annual Call, Section V for data element definitions.

The actuarial edits pertinent to the Data Quality Incentive Program are as follows:

a. Compare Standard & Net Premium

i. Standard Premium at Bureau & Company levels should not equal theNet Premium.

ii. The ratio of the Standard Premium at Company Level to Net Premiumshould fall between 2.00 and .500.

iii. The ratio of the Standard Premium at Bureau Level to Net Premiumshould fall between 2.00 and .500.

b. Development of Premium – Policy Year Call

The ratio of the premium on the Current Policy Year Call for a specific policyyear to the premium on the Prior Policy Year Call for the same policy yearshould fall within the listed ranges, if the change exceeds $200,000. This editapplies to Standard Earned Premium at Company Level, Standard EarnedPremium at Bureau Level and Net Earned Premium.

Report Level on CurrentCalendar Year DataCall**

Lowest UsualChange Factor

Highest UsualChange Factor

5th & Prior Reports .93 1.073rd & 4th .80 1.252nd .75 1.331st 1.00 4.00** On 1999 Calendar Year Calls 98 effective is 1st report, 97 is 2nd, 96 is 3rd, 95 is4th and 94 - 78 is 5th & prior.

c. Development of Paid Plus Case - Policy Year Call

The ratio of the Paid + Case losses on the Current Policy Year Call for aspecific policy year to the Paid + Case losses on the Prior Policy Year Call tothe same policy year should fall within the listed ranges, if the change exceeds$ 200,000. This edit applies to Paid +Case Indemnity, Medical, GrossIndemnity, Gross Medical, Net Indemnity, and Net Medical.



Page 5




6th & Prior Reports .80 1.253rd 4th & 5th .80 1.402nd .75 1.701st 1.00 5.00** On 1999 calendar Year Calls 98 effective is 1st report, 97 is 2nd, 96 is 3rd, 95 is4th, 94 is 5th and 93 - 78 is 6th & prior.

d. Claim Count Development – Policy Year Call

The ratio of the Incurred Indemnity Claim Counts on the Current Policy YearCall for a specific policy year to the Incurred Indemnity Claim Counts on thePrior Policy Year Call to the same policy year should fall within the listedranges, if the compared claim counts exceeds 20.




6th & Prior Reports .99 1.014th & 5th .98 1.053rd .94 1.202nd .90 1.30** On 1999 calendar Year Calls 98 effective is 1st report, 97 is 2nd, 96 is 3rd, 95 is4th, 94 is 5th and 93-80 (claim counts are not required for 78 &79) is 6th & prior.

e. Decrease in Paid Loss Totals - Policy Year Call

Total (sum of all policy years) Indemnity Paid Losses, Total Medical PaidLosses, and Total Indemnity + Medical Paid can not decrease more than$200,000.

f. Loss Development - Accident Year Call

The ratio of the Paid + Case losses on the Current Accident Year Call for aspecific accident year to the Paid + Case losses on the Prior Accident Year Callto the same accident year should fall within the listed ranges, if the changeexceeds $200,000. This edit applies to Indemnity, Medical, Gross Indemnity,Gross Medical, Net Indemnity and Net Medical Paid + Case losses.






5th & Prior Reports .75 1.333rd & 4th .75 1.402nd .80 1.501st .90 2.30** On 1999 calendar Year Calls 98 accident is 1st report, 97 is 2nd, 96 is 3rd, 95 is4th and 94-78 is 5th & prior.

g. Claim Count Development – Accident Year Call

The ratio of the Incurred Indemnity Claim Counts on the Current AccidentYear Call for a specific accident year to the Incurred Indemnity Claim Countson the Prior Accident Year Call to the same accident year should fall within thelisted ranges, if the claim count exceeds 20.




5th & Prior Reports .99 1.024th .98 1.053rd .94 1.202nd .88 1.401st .88 2.50** On 1999 calendar Year Calls 98 effective is 1st report, 97 is 2nd, 96 is 3rd, 95 is4th, 94 is 5th and 94 -80 (claim counts are not required for 78 &79) is 6th & prior.

h. Decrease in Paid Loss Totals – Accident Year Call

Total (sum of all policy years) Indemnity Paid Losses, Total Medical PaidLosses, and Total Indemnity + Medical Paid can not decrease more than$200,000.

i. Check consistency between the Policy & Accident Year Losses.

i. Current Accident year losses should be greater than Current YearPolicy Year losses. For Calendar year 1999 this edit would comparethe ½ year 99 policy and accident year losses. Accident year 99 lossesCAN include claims from a 99 and 98 policy effective year while 99policy year losses only include losses from 99 effective policies. Thisedit applies to all loss subtotals. I.e. Paid, Case, Bulk, and IncurredBut Not Reported for both medical and indemnity.



Page 7

ii. The Accident Year losses should be less than or equal to thecorresponding policy year + the prior policy year. For example, 97(Accident Year) Paid Indemnity should be less than or equal to 96 + 97(Policy Years) Paid Indemnity. This edit applies to all loss subtotals.I.e. Paid, Case, Bulk, and Incurred But Not Reported for both medicaland indemnity.

iii. Prior to 78 (line A) policy year losses should be greater than Prior to 78accident year losses. Prior to 78 policy losses includes claims withpolicies with 77 effective dates and 78 accident dates, but prior to 78accident year losses do not include the 77 effective with 78 accidents.

F. Disciplinary Fine

If, in any filing the Workers Compensation Rating and Inspection Bureau of Massachusettsmakes with the Division of Insurance, it becomes necessary for the Bureau’s actuarial staff toadjust, correct, or make allowances for inaccuracies in the data supplied by a carrier or group,the reporting carrier or group shall be subject to a disciplinary fine. The disciplinary fine canalso be levied when a reporting carrier or group fails to work with Bureau staff to providereasonable clarification or correction. Written warning must be provided a reasonable timeprior to levying any disciplinary fine upon such entity. For each filing affected by such adeficiency, the disciplinary fine shall be the greater of $5000 or .05% of the reporting carrieror group’s Bureau Standard Earned Premium for every rate filing or potential rate filingimpacted by the error. This fine is in addition to any of the other fines accrued under the DataQuality Incentive Program, and not subject to the penalty cap.

In addition to any authority the Commissioner of Insurance already has, the Commissionermay, at his or her discretion, require the Workers Compensation Rating and InspectionBureau of Massachusetts to impose a fine upon a reporting carrier or group in the amount setforth in paragraph (1), above if, after written notice and a hearing, the Commissioner findsthat any reporting entity’s aggregate financial data is unreliable, incomplete, untimely orotherwise defective and that such defect has materially impacted a filing submitted to theCommissioner. The Commissioner may not, however, impose such a fine if the WorkersCompensation Rating and Inspection Bureau of Massachusetts has already imposed any finefor such defect under this data quality incentive program before the Commissioner issues anotice of hearing for this disciplinary fine. The Workers Compensation Rating and InspectionBureau of Massachusetts shall provide a list of the fines imposed under this data qualityincentive program when the Workers Compensation Rating and Inspection Bureau ofMassachusetts submits each calendar years aggregate financial data to the director of the StateRating Bureau.

G. Implementation

The Calendar Year 2000 (data valued as of 12/31/2000 and 6/30/2001) and reported in Marchthrough September 2001 will be subject to charges accrued in accordance with the DataQuality Incentive Program.



The provisions of the program will be applied to the Calendar Year 1999 data, for illustrativepurposes only, to provide each carrier with an estimate of the impact of this program.

H. Appeal of Penalties Levied under the Data Quality Incentive Program

If an item appears on a fine list, which in the opinion of the carrier should not be subject to afine, the carrier should contact the Data Quality Services Department to the attention of theincentive appeals process. Copies of all pertinent written communication and a briefexplanation of the circumstances should be provided in a written request to waive the fine.

Examples of situations where fines may be waived are as follows:

1. The error was not in the carrier’s submission.

2. The Bureau made an error in assigning the fine to the carrier.

3. The Bureau received the call before the data was subject to a fine.

4. The carrier was not provided proper notification that a penalty situation was pending.

5. The carrier cannot provide or correct data due to circumstances beyond their controlsuch as fire or natural disaster.

If the carrier is not satisfied with the results of the appeal to the Bureau, then the carrier canmake a written request to put the appeal before the Bureau’s Governing Committee AppealsSubcommittee. Bureau staff will schedule a review at the next meeting of AppealsSubcommittee.

the workers' compensation rating and inspection …€¦ · attached for your review is a copy...

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