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(1)

STATE OF NEW JERSEY

DEPARTMENT OF BANKING AND INSURANCE

60 PARK PLACE, NEWARK, NJ 07102

(973) 622-6014

GROVER E. CZECH, ESQ.

FREDERICK A. HUBER

Executive Director

Associate Executive Director

June 13, 2005

MANUAL AMENDMENT BULLETIN #427

To All Bureau Members and Subscribers:

Re:

Changes to Manual Rules

The Commissioner of Banking and Insurance has approved the following changes to the New

Jersey Workers Compensation and Employers Liability Insurance Manual (Manual). The changes are

effective July 1, 2005 on a new and renewal basis.

FORMS

Amend 3:2 to include an amended New Jersey Limited Other States Insurance Endorsement

(WC 29 03 09 A). This endorsement, which is attached as Exhibit I, is amended to clarify wording in

the previous version of this endorsement that was deemed to be confusing or not sufficiently clear as to

its intent.

The “Index – Policy Forms and Endorsements” has been revised to include the amended

endorsement. The revised Index is attached as Exhibit II.

With respect to policy forms, your attention is called to 3:2-1 of the Manual wherein it is

stipulated that they must be filed in duplicate with the Rating Bureau before being placed in use.

PREPARATION AND AUDITING OF POLICIES

Amend 3:3-40.1 as follows:

PRESENT

40.1 Spouse of Individual Proprietor or

Partner

. The payroll of a spouse of an

individual proprietor or spouse of a partner in a

partnership employed to perform work in

connection with the business operations of the

insured shall be included in the statement of

payroll and a premium charged thereon subject

to a maximum average individual payroll of one

thousand eight hundred fifty ($1,850) per week

and a minimum average of four hundred sixty

($460) per week. The maximum average and

minimum average payroll required by this rule

shall be subject to pro rata adjustment where the

spouse does not devote full time to the risk

subject to audit.

PROPOSED

40.1 Spouse of Individual Proprietor or

Partner.

The payroll of a spouse of an

individual proprietor

, a spouse of a partner in

a partnership or a spouse of a principal owner

of a Limited Liability Company

employed to

perform work in connection with the business

operations of the insured shall be included in

the statement of payroll and a premium

charged thereon subject to a maximum

average individual payroll of one thousand

eight hundred fifty ($1,850) per week and a

minimum average of four hundred sixty

($460) per week. The maximum average and

minimum average payroll required by this rule

shall be subject to pro rata adjustment where

the spouse does not devote full time to the risk

subject to audit.

(2)

Manual Amendment Bulletin #427

Similar to an individual proprietor or a partner in a partnership, owners of Limited Liability

Companies have the option of including or excluding themselves from the policy coverage. Presently,

the Manual rule in 3:3-40.1 provides for inclusion of payroll, subject to the payroll limitations applying

to Executive Officers of corporations, of an actively working spouse of an individual proprietor or

partner for premium determination purposes. The Manual rule in 3:3-40.1 must be amended to provide

for the inclusion of payroll of an actively working spouse of a principal owner of a Limited Liability

Company for premium determination, subject to the payroll limitations to Executive Officers of

corporations.

APPROVED MANAGED CARE PROGRAM

Amend 3:10B as follows:

PRESENT

4. Notification in Writing.

A member carrier

utilizing an approved managed care program

shall notify the Rating Bureau in writing on the

form prescribed for that purpose if it intends to

apply a premium reduction. A copy of the form

is shown in 8. below. The form and attachments

stipulated therein, where applicable, must be

completed and signed.

8. Forms Required

APPLICATION

FOR AN

APPROVED MANAGED CARE PROGRAM

PREMIUM REDUCTION

(Application Form not shown)

PROPOSED

4. Notification in Writing.

A member carrier

utilizing an approved managed care program

shall notify the Rating Bureau in writing on the

form prescribed for that purpose if it intends to

apply a premium reduction. A copy of the form

is shown in

9.

below. The form and attachments

stipulated therein, where applicable, must be

completed and signed.

8. New Jersey Workers Compensation

Insurance Plan.

An Approved Managed Care

Program Premium Reduction shall not be

offered or available to any risk written through

the New Jersey Workers Compensation

Insurance Plan.

9. Forms Required

APPLICATION

FOR AN

APPROVED MANAGED CARE PROGRAM

PREMIUM REDUCTION

(

See Exhibit III

)

This section of the Manual has been amended to provide for a new rule and revisions to

two current rules. The new rule is included in 3:10B-8. This rule prohibits the use of an Approved

Managed Care Program Premium Reduction in policies written through the New Jersey Workers

Compensation Insurance Plan (Plan). The “Application for an Approved Managed Care Program

Premium Reduction” form, that was previously included in 3:10B-8, has been revised and is now

included in 3:10B-9. The Application form, filed with the Bureau by insurers that opt to offer Approved

(3)

Managed Care Program Premium Reductions, was revised to include a statement indicating that an

Approved Managed Care Premium Reduction is not applicable to policies written through the Plan.

Finally, the rule in 3:10B-4 has been revised to account for the renumbering of the Application form.

Grover E. Czech, Esq.

Executive Director

GEC:njl

Att.

(4)

Manual Amendment Bulletin #427

Exhibit I

WORKERS COMPENSATION AND EMPLOYERS LIABILITY INSURANCE POLICY WC 29 03 09 A

NEW JERSEY LIMITED OTHER STATES INSURANCE ENDORSEMENT

Part Three - Other States Insurance

is amended to read:

A.

How This Insurance Applies

1. We will pay promptly, when due, the benefits required of you by the workers' compensation law

of any state not listed in Item 3.A. of the Information Page, if all of the following conditions are

met:

a.

The employee claiming benefits was employed under a contract of hire made in a state listed

in Item 3.A. of the Information Page and was, at the time of injury, principally employed in

a state listed in Item 3.A. of the Information Page; and

b.

The employee claiming benefits is not claiming benefits in a state where, at the time of

injury, (i) you have other workers' compensation coverage, or (ii) you were, by virtue of the

nature of your operations in that state, required by that state's law to have obtained separate

workers' compensation insurance coverage, or (iii) you are an authorized self-insurer or

participant in a self-insured group plan; and

c. The duration of the work being performed by the employee claiming benefits in a state other

than those listed in item 3.A. of the Information Page is temporary.

2. If we are not permitted to pay the benefits directly to persons entitled to them under

circumstances described in item 1 above, we will reimburse you for the benefits required to be

paid.

3. This insurance does not apply to fines or penalties arising out of your failure to comply with the

requirements of the workers' compensation law.

IMPORTANT NOTICE!

If you hire any employees outside of New Jersey to work principally outside of New Jersey or you begin operations in

any state other than New Jersey, you must obtain insurance coverage in that state and do whatever else may be

required under that state’s law, as this Limited Other States Endorsement does not satisfy the requirements of that

state’s workers’ compensation law.

This endorsement changes the policy to which it is attached and is effective on the date issued unless otherwise stated.

(The information below is required only when this endorsement is issued subsequent to preparation of the policy.)

Endorsement Effective

Policy No.

Endorsement No.

Insured

Premium $

Insurance Company

Countersigned by

Notes:

1.

Servicing carriers and direct assignment carriers must attach this endorsement to all policies issued through the New

Jersey Workers’ Compensation Insurance Plan. Voluntary carriers may, as an option, elect to attach this endorsement to

any policy showing New Jersey in Item 3.A. of the Information Page.

2.

Enter “See Endorsement WC 29 03 09 A” in Item 3.C. of the Information Page.

(5)

EXHIBIT II

INDEX

POLICY FORMS AND ENDORSEMENTS APPLICABLE IN NEW JERSEY

STANDARD VERSION IDENTIFIER IDENTIFIER± Workers Compensation and Employers Liability Insurance Policy... WC 00 00 00 A Information Page (With New Jersey Requirements)... WC 00 00 01 B

FEDERAL COVERAGES AND EXCLUSIONS

Defense Base Act Coverage Endorsement ... WC 00 01 01 A Federal Employers' Liability Act Coverage Endorsement ... WC 00 01 04

Longshore and Harbor Workers' Compensation Act Coverage Endorsement ... WC 00 01 06 A Outer Continental Shelf Lands Act Coverage Endorsement ... WC 00 01 09 A Notification Endorsement of Pending Law Change to Terrorism Risk Insurance Act of 2002... WC 00 01 12

New Jersey Voluntary Compensation Federal Employers' Liability Act Coverage Endorsement ... WC 29 01 01

MARITIME COVERAGES AND EXCLUSIONS

Maritime Coverage Endorsement ... WC 00 02 01 A Voluntary Compensation Maritime Coverage Endorsement ... WC 00 02 03

OTHER COVERAGE AND EXCLUSIONS

Alternate Employer Endorsement... WC 00 03 01 A Designated Workplaces Exclusion Endorsement ... WC 00 03 02

Insurance Company as Insured Endorsement... WC 00 03 04 Joint Venture as Insured Endorsement ... WC 00 03 05

Rural Electrification Administration Endorsement ... WC 00 03 09 A New Jersey Workers Compensation and Employers Liability Coverage for Residence Employees Endorsement ... WC 29 03 02 A New Jersey Employee Leasing Labor Contractor Endorsement ... WC 29 03 03

New Jersey Employee Leasing Client Exclusion Endorsement... WC 29 03 04 New Jersey Employee Leasing Labor Contractor Exclusion Endorsement... WC 29 03 05

New Jersey Part Two Employers Liability Endorsement... WC 29 03 06 A New Jersey Sole Proprietor and Partners Coverage Endorsement ... WC 29 03 07

New Jersey Limited Other States Insurance Endorsement... WC 29 03 09 AÌ

New Jersey Workers Compensation Insurance Plan Eligibility Endorsement... WC 29 03 10

PREMIUM

Anniversary Rating Date Endorsement ... WC 00 04 02 Experience Rating Modification Factor Endorsement ... WC 00 04 03 Pending Rate Change Endorsement... WC 00 04 04 Policy Period Endorsement... WC 00 04 05 Rate Change Endorsement... WC 00 04 07 Premium Due Date Endorsement ... WC 00 04 19

Terrorism Risk Insurance Act Endorsement... WC 00 04 20 A New Jersey Premium Discount Endorsement: Schedule Y...±±WC 29 04 06 R New Jersey Premium Discount Endorsement: Schedule X...±±WC 29 04 07

New Jersey Approved Managed Care Program Endorsement ... WC 29 04 09 A New Jersey Construction Classification Premium Adjustment Endorsement ... WC 29 04 10

RETROSPECTIVE PREMIUM

Retrospective Premium Endorsement - One Year Plan... WC 00 05 03 A Retrospective Premium Endorsement - Three Year Plan... WC 00 05 04 A Retrospective Premium Endorsement Aviation Exclusion ... WC 00 05 08

Retrospective Premium Endorsement Changes... WC 00 05 09 A Retrospective Premium Endorsement Non-Ratable Catastrophe Element or Surcharge... WC 00 05 10

Retrospective Premium Endorsement Short Form ... WC 00 05 11

New Jersey Retrospective Premium Endorsement Part Two Employers Liability Insurance Excess Exclusion... WC 29 05 09 C New Jersey Retrospective Premium Endorsement - Long Term Construction Project ... WC 29 05 12 A New Jersey Retrospective Premium Endorsement - Large Risk Alternative Rating Option - One Year Rating Period... WC 29 05 13 C New Jersey Retrospective Premium Endorsement - Large Risk Alternative Rating Option - Three Year Rating Period ... WC 29 05 14 C New Jersey Retrospective Premium Endorsement - Large Risk Alternative Rating Option Long Term Construction Project ... WC 29 05 15 C New Jersey Large Risk - Large Deductible Endorsement... WC 29 06 01 A New Jersey Large Risk - Large Deductible Retrospective Adjustment Endorsement... WC 29 06 02 B New Jersey Large Risk – Large Deductible Aggregate Limit Endorsement ... WC 29 06 04

New Jersey Large Risk - Large Deductible Retrospective – Per Person Basis... WC 29 06 05

OTHER

Policy Information Page Endorsement ... WC 89 06 00 B New Jersey Participating Provisions Endorsement ... WC 29 06 03

NEW JERSEY NOTICES

New Jersey Notice of Cancellation... Form 116-B New Jersey Notice of Reinstatement ... Form 117-A

New Jersey Posting Notice ... Form 16NJ A New Jersey Posting Notice (Spanish)... Form 17NJ

New Jersey Notice of Election – Proprietors and Partners Workers Compensation and Employers Liability Insurance... Form PP-1 A ± Absence of a version identifier denotes original printing

±± The version identifier for these endorsements will be governed by revisions in verbiage or change in the Discount Percentages/Table of Rating Values forming a part of the endorsements

(6)

© Compensation Rating and Inspection Bureau

9.

Form Required.

APPLICATION

FOR AN

APPROVED MANAGED CARE PROGRAM

PREMIUM REDUCTION

The ____________________________________________________________________ has

Name of Insurer

entered into a written agreement with

the______________________________________________________________

Approved Managed Care Organization

to process claims under policies providing New Jersey workers compensation

coverage. The managed care organization has been approved by the Commissioner

of Insurance and a copy of the written agreement with the managed care

organization together with the approval document of the managed care

organization are enclosed.

received approval by the Commissioner of Insurance for its in-house managed

care program for processing claims under policies providing New Jersey workers

compensation coverage. Copy of the approval document is enclosed.

A specimen copy of the written agreement which will be executed by the insured is

enclosed. Such agreement contains the stipulation that the use of the managed care program

is an exercise of the insured’s right of choice of medical provider under the New Jersey Workers’

Compensation Law.

Premium reductions will be applied uniformly to each insured at a percentage rate of ______%.

The effective date of the program is ______________________

The program will be applicable to individual policies on a:

new and renewal basis only

new, renewal and outstanding basis

other

If “Other” is stipulated, a complete explanation by separate attachment is required.

An Approved Managed Care Program Premium Reduction is not applicable to policies

written through the New Jersey Workers Compensation Insurance Plan.

A copy of the New Jersey Approved Managed Care Program Endorsement WC 29 04 09A

is enclosed.

The program and procedures included in this form and any accompanying attachments have

been reviewed by the management of the insurer and have been found to provide fair and

equitable treatment to workers compensation insurance policyholders of the insurer.

__________________________ __________________

Signature

Date

Form #Req 11:6-2.3(d)

Manual Amendment Bulletin #427

Exhibit III

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