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24.29.956    COMPUTATION AND COLLECTION OF THE ADMINISTRATION FUND ASSESSMENT PREMIUM SURCHARGE RATE FOR PLAN NO. 2 AND NO. 3

(1) The department will compute the premium surcharge to be paid by all employers insured by plan No. 2 insurers and by the plan No. 3 insurer in the manner provided by 39-71-201, MCA.

(a) In calculating the total administration fund assessment premium surcharge rate, the department will use premium reported to the insurance commissioner pursuant to 33-2-705, MCA, and premium reported by the plan No. 3 insurer.

(b) If premium has not been reported to the insurance commissioner by the date the surcharge is computed, the department will use the premiums reported on the quarterly surcharge forms in computing the surcharge rate.

(c) A plan No. 2 insurer who has failed to report premium earned to the insurance commissioner, pursuant to 33-2-705, MCA, as of the date the surcharge is computed must pay an assessment of $500.00 and the department will use an estimated premium amount for purposes of the surcharge calculation.

(d) The resulting single premium surcharge rate will apply to all employers being insured by plan No. 2 insurers and the plan No. 3 insurer.

(2) In determining the premium surcharge for the coming fiscal year, the department shall compare the total amount of premium surcharge remitted by all plan No. 2 insurers and the plan No. 3 insurer for the most recently completed fiscal year to the amount of the administration fund assessment that the premium surcharge was calculated to fund.

(a) If the amount actually collected in premium surcharge is greater than the calculated assessment on paid losses from the preceding year, the department shall subtract the excess amount from the next assessment. If the amount actually collected in premium surcharge is less than the calculated assessment on paid losses from the preceding year, the department shall add the underfunded amount to the next assessment.

(b) For the purpose of calculating the surcharge, late payments and remittances will not be considered if received after the new surcharge rate has been calculated. Instead, the payments and remittances will be considered for the purpose of surcharge calculation as if made for the fiscal year in which they were received.

(3) The administration fund assessment premium surcharge rate is effective for policies written or renewed on or after July 1 of each year. For policies written or renewed during the fiscal year, the current surcharge rate will apply to all payments made during the policy year regardless of any changes in the surcharge rate effective as of the next fiscal year.

(4) Insurers may address over-collections or overpayments in the following manner:

(a) Any over-collection of the administration fund assessment premium surcharge from a policyholder by the insurer may be refunded by the insurer, or applied to premium or future surcharge payments due from the policyholder to the insurer. An accounting of the payment shall be provided by the insurer to the policyholder.

(b) If a surcharge remittance from an insurer to the department is later determined to include an overpayment, the insurer may deduct the amount overpaid from the next surcharge remittance due from the insurer to the department. The insurer shall maintain records documenting any surcharge amounts refunded to its policyholders.

(5) If an insurer uses a deposit placed by a policyholder for payment of premium, the deposit must also be used for payment of the administration fund assessment premium surcharge. If the amount of the deposit is insufficient to cover both the cost of the premium and the surcharge, the deposit must first be applied to the surcharge and the remaining amount to the premium due.

(6) Each plan No. 2 insurer and the plan No. 3 insurer is responsible for correctly calculating the amount of the authorized premium surcharge for the administration fund assessment that the insurer is to collect from each of its insured employers using the rate established by the department. Because the insurer, not the department, calculates the amount of premium due from the employer, disputes between the insurer and the insured regarding the amount of the premium surcharge are not disputes over which the department has jurisdiction.

(7) Each plan No. 2 insurer and the plan No. 3 insurer shall maintain reasonable records showing the total amount of premium surcharge billed for each policyholder and the total amount of premium surcharge actually collected from each policyholder. The department may inspect those records.

(8) All uninsured employers may be assessed a penalty surcharge based on what would have been charged had the employer been enrolled by the plan No. 3 insurer.

History: 39-71-203, MCA; IMP, 39-71-201, 39-71-203, 39-71-2352, MCA; NEW, 2000 MAR p. 844, Eff. 3/30/00; AMD, 2004 MAR p. 645, Eff. 3/26/04; AMD, 2012 MAR p. 1666, Eff. 8/24/12.

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