Massachusetts General Laws
Chapter 152 - Workers' Compensation
Section 53a - Classification of Risks and Premiums; Distribution of Premiums Among Employers

Section 53A. (1) Any insurance company authorized to transact business in this commonwealth under subclause (b) or (e) of clause Sixth of section forty-seven of chapter one hundred and seventy-five may, except as provided in clause (c) of section fifty-four of said chapter one hundred and seventy-five, insure the payment of the compensation provided for by this chapter, and when any such company insures such payment, it shall file with the commissioner of insurance, or, if it is a member of or subscriber to a rating organization under section fifty-two C, authorize such rating organization to file with the commissioner on its behalf, its classification of risks and premiums relating thereto and subsequent proposed classifications of premiums.
(2) Such classifications of risks and premiums shall be filed at least every two years and on any additional date that the commissioner of insurance may designate. Within sixty days after any filing the commissioner shall conduct a hearing to determine whether the classifications and rates are not excessive, inadequate or unfairly discriminatory for the risks to which they respectively apply and that they fall within a range of reasonableness.
(3) When a filing is not accompanied by the information upon which the insurer supports such filing, and the commissioner of the department of insurance does not have sufficient information to determine whether such filing meets the requirements of this section, he may require such insurer to furnish the information upon which it supports such filing. Any filing may be supported by the experience or judgment of the insurer or rating organization making the filing, the experience of other insurers or rating organizations, and any other factors which the insurer or rating organization deems relevant.
(4) Where a claim against an insured that has affected such insured's experience rating has been found non-compensable, or where an insurer recovers previously paid workers' compensation benefits from a negligent third party, or where an insurer has been reimbursed by the insured or the Workers' Compensation Trust Fund for payments made pursuant to subsection two of section sixty-five, the insurer shall submit a revised statistical unit report to the appropriate rating bureau within sixty days of such finding, recovery or reimbursement. The commissioner shall establish a procedure for reviewing and adjusting the premium of any insured subject to experience rating whose premium is adversely affected by changes in claim valuation by its insurer after those claims are removed from the experience rating calculation. A pattern or practice of making such changes shall be an unfair or deceptive act or practice under chapter one hundred and seventy-six D.
(5) The commissioner of insurance shall, by the use of experience rating credits, the institution of a payroll cap on premium computation, or other method, provide for equitable distribution of premiums among employers paying higher than average wages and those paying lower than average wages.
(6) (a) The advisory council, established pursuant to section fifteen of chapter twenty-three E may request without limitation any loss data, from any insurance company or rating organization. Any insurance company or rating organization which is the recipient of such a request may, if it believes that the request is unduly burdensome or unreasonable, file a motion to be heard by the commissioner of insurance concerning whether all or part of the request requires response. The commissioner of insurance may, if he finds the request is unduly burdensome or unreasonable, deny the request in whole or in part.
(b) At any hearing conducted pursuant to this section, the advisory council may present a written statement and oral testimony relating to any issues which may arise during the course of the hearing. Said advisory council may not cross-examine witnesses produced by other parties, or appeal any decision of the commissioner.
(7) No proposed classifications or premiums shall take effect until approved by the commissioner of insurance as not excessive, inadequate, or unfairly discriminatory for the risks to which they respectively apply, and as within a range of reasonableness. If the commissioner does not approve or disapprove proposed classifications or premiums within six months after a filing made pursuant to subsection (2), such classifications and premiums shall be deemed approved and shall be immediately effective. If said commissioner disapproves proposed premiums and classifications, stating his reasons for disapproval, any insurance company or rating organization may file new proposed classifications and premiums.
(8) If, after the conclusion of a hearing on classification and premiums pursuant to subsection (2), the commissioner of insurance determines that any already effective premium is excessive, he shall order a specific decrease in that premium to be effective six months from the date of the insurance company or rating organization filing under consideration. He shall order a specific decrease irrespective or whether any insurance company or rating organization has filed for a decrease in any premium rate.
(9) Any insurance company may make written application to the commissioner of insurance for permission to use, in place of premium rates approved pursuant to subsections (7) and (8), a percentage decrease from said premium rates which shall be uniform within any classification of risk in the commonwealth. The commissioner shall issue an order permitting the decrease for such insurance company unless he finds that the resulting premium would be inadequate or unfairly discriminatory.
(10) Upon petition of an insurance company, rating organization, or other aggrieved party, any order or decision of the commissioner of insurance under this chapter shall be subject to review by the supreme judicial court.
(11) The commissioner shall establish a procedure for the identification and separate annual reporting by each insurer of any penalty payments and legal fees which this chapter requires to be excluded from any formula utilized to establish premium rates for workers' compensation insurance. Said commissioner may compare said reports by insurers to records of such penalty payments and legal fees maintained by the division of industrial accidents in order to judge the accuracy of said reports.
(12) Notwithstanding the provisions of section fifty-two C, the commissioner of insurance shall not approve any classifications or rates that contain provisions for any dividends, unabsorbed premium deposits, savings, or other payments allowed or returned by insurers to their policyholders, members, subscribers, or stockholders, or that contain provisions for expenses that exceed the expense need of the insurance company filing classifications or rates under this section or that exceed the average expense need of the members and subscribers authorizing the rating organization to file classifications or rates under this section, or that contain provisions for the agent or broker commission allowance that are not demonstrated both to be reasonable and to reflect the actual cost to agents or brokers of the services they provide.
(13) The commissioner shall make a finding on the basis of information submitted in any filing made pursuant to this section that the insurer or insurers employ cost control programs and techniques acceptable to the commissioner which have had or are expected to have a substantial impact on fraudulent claim costs, unnecessary health care costs, and any other unreasonable costs and expenses, as well as on the collection of the appropriate premium charges owed to the insurer or insurers. If the commissioner does not so find, the commissioner may disapprove such filing. The commissioner shall also have authority to make findings, after a hearing on any filing made pursuant to this section, that the proposed rates or classifications are excessive and that the excess is due to the failure of the insurer or insurers to utilize adequate programs to control costs or expenses or to collect the appropriate premium charges. If the commissioner so finds, he shall disapprove such a filing or, in the alternative, shall limit in any manner he determines to be appropriate the amount of any adjustment in premium charges based upon changes in costs, expenses, and premium collections. The commissioner may issue regulations designed to further achievement by insurers of adequate controls on costs and expenses and of adequate collection of the appropriate premium charges owed to the insurers.
(14) Unless otherwise authorized by the commissioner, classifications or rates approved under this section shall remain in effect for a period of not less than twelve months.
(15) Notwithstanding the provisions of section fifty-two C the commissioner of insurance shall, prior to April first, nineteen hundred and ninety-two, and at such later times as the commissioner authorizes, establish after a hearing the amounts of all agent or broker commission fees paid to licensed insurance agents or brokers in connection with workers' compensation insurance policies written through the reinsurance pool. The amounts of the fees must be reasonable and must consider the actual cost to agents or brokers of the services they provide. When the commissioner sets the commission fees for the reinsurance pool established pursuant to section sixty-five C, the commissioner may also consider incentives to agents and brokers to place such insurance policies through their customary markets when that is practicable. The commissioner shall set commission fees paid on original issue of coverage and on each renewal or reissue thereof.
(16) The commissioner of insurance shall establish loss control standards for insureds that meet criteria designed to identify those insureds that would significantly benefit from the adoption of a program to control workers' compensation costs. Such criteria shall be established by the commissioner and may include the number of persons employed by the insured, the amount of the insured's annual payroll, the amount of the insured's workers' compensation insurance premium, the experience modifier of the insured, the class code of the insured, the injury and illness lost workday rate of the insured, and any other relevant criteria as the commissioner may determine. Said loss control standards may require that an insured, in cooperation with its insurer, establish and maintain a safety committee, prepare and maintain a plan for medical evaluation and treatment, including immediate post-injury offsite care, establish and maintain a written plan for providing reasonable accommodation for injured workers to return to work, and implement other cost control measures acceptable to the commissioner. The loss control standards may also require that an insured have all employees engaged in construction work certified as having successfully completed a course in construction safety and health approved by the United States Occupational Safety and Health Administration that is at least ten hours in duration. The commissioner shall have the authority to establish a rating plan to effectuate compliance with the loss control standards established pursuant to this subsection. In establishing any such rating plan, the commissioner may create financial incentives to employees of insureds to encourage said employees to assist in controlling workers' compensation costs.
(17) The commissioner may promulgate rules and regulations as necessary to carry out the provisions of this section.

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