RULE VII – PREMIUM DISCOUNT

Item 4 of the Information Page.

Premium Discount (if any) is determined by an individual carriers’ rating values. It recognizes that the relative expense of issuing and servicing larger premium policies is less than for smaller premium policies.

1. Combination Permitted Two or more policies issued to the same insured by one or more insurance carriers under the same management may be combined for the purpose of computing the premium discount for that insured.
2. Combination Procedure If such separate policies have different expiration dates, the combination for the purpose of 1. above is subject to the following:

   a. The PCRB shall determine the effective date for the application of premium discount.

   b. All such policies in force prior to such effective date shall be cancelled and rewritten as of the effective date.c. All policies effective after the effective date of the combination shall be written to expire concurrently with other policies in the combination.

The first step in setting up a “wrap-up” program requires the carrier to request approval from: Compensation Actuary, Bureau of Regulation of Rates and Policies, Pennsylvania Insurance Department, 1311 Strawberry Square, Harrisburg, PA 17120.

The following application of the premium discount is optional for wrap up construction projects which are not under a retrospective rating plan:

Policies issued to two or more legal entities engaged in a construction, erection or demolition project may be combined for the purpose of computing premium discount, subject to the following conditions:

1. Insurance Carrier All such policies must be issued by one or more insurance carriers under the same management.
2. Policy LimitationThe policies shall be limited to insurance on such large construction projects.
3. Eligible Entities Entities eligible for combination shall be limited to the general contractor (including any owner or principal acting as a general contractor) and subcontractors performing work under contracts let on an ex-insurance basis. In addition, if the contract between the owner or principal and such general contractor is on an ex-insurance basis, the owner or principal shall be an eligible entity under this rule.
4. Carrier Coverage ResponsibilityThe carrier’s coverage responsibility in a wrap-up project is for the duration of that project. Cancellation of such coverage is prohibited except for non-payment of premium.
5. PCRB NotificationThe PCRB must be notified of the method by which the wrap-up policies will be identified.
6. Separate Policy RequirementA separate policy is required for each entity included in the wrap-up plan and each policy is subject to that entity’s own experience rating modification.
   
7. Experience Modifications The experience developed by each entity in the combinations will be used in calculating the future experience modifications for the entity. There will be no experience rating for the project as a unit.