Alaska Assigned Risk
Below are some commonly asked questions regarding the Alaska Workers Compensation Assigned Risk Pool.
What is the Assigned Risk Pool?
In Alaska, each employer is required to obtain workers compensation insurance that will provide their employees with medical benefits and compensation for lost wages due to injury, occupational disease, or death arising from work-related injuries.
Workers compensation insurance is usually purchased from a company that voluntarily agrees to provide this coverage. However, for those employers unable to find an insurance company to write workers compensation insurance on a voluntary basis, the State of Alaska has established the Assigned Risk Pool.
Why is my policy in the Pool?
Your insurance broker was unable to find an insurance company to write your policy on a voluntary basis. The reasons that companies may be unwilling to write a policy vary and include: the type of work performed is considered hazardous; the business seeking insurance is small or newly formed; or the past claims and loss experience of the business is not acceptable.
Who sets the rates charged for coverage in the Assigned Risk Pool?
The Director of the Alaska Division of Insurance has designated the National Council on Compensation Insurance (NCCI) located in Boca Raton, Florida as the administrator of the Alaska Assigned Risk Pool. NCCI files rates with the Director, who must approve the rates before they can be used to determine premiums for Assigned Risk customers. These rates are based upon the cost of the losses for a class of workers as compared to the payroll for that class.
What is the Assigned Risk Surcharge?
The surcharge is a premium charge to pay for the higher level of losses experienced by the entire Assigned Risk Pool. All premium on each policy that is in excess of $3000 is surcharged 25%. The amount of the surcharge has been established by the Alaska Legislature.
How do I get out of the Pool?
You should review your workers compensation policy with your broker on a regular basis. As changes occur in your business status, your claims and loss experience improve, or insurance market conditions fluctuate, your broker may be able to replace your Assigned Risk Pool Policy with a policy written by an insurance company on a voluntary basis.
Why did Alaska National issue my policy?
Alaska National performs policy issue and loss adjusting services for the Alaska Assigned Risk Pool. As an agent for the Pool, Alaska National must follow the rules established by the Pool and the Alaska Division of Insurance.
What type of business changes should be reported to Alaska National during the term of the policy?
To ensure that claims, premium payments and other policy transactions are handled as efficiently and accurately as possible, it is important to advise Alaska National when key changes take place in your business.
Important changes that should be reported to Alaska National include:
- Change of mailing address
- Change of physical location(s) of the business
- Change in legal name of the business
- Change in legal status of the business, eg., LLC to a Corporation
- Significant increases or decreases in payroll for the business
- Wind-up or other closing of business operations
What is an Experience Modification and how will it affect my workers compensation premium?
An experience modification recognizes the differences between individual policyholders. It does this by comparing your loss experience with the average loss experience of other insureds in the same type of business or trade. The experience modification may increase or decrease your premium depending upon whether your losses are above or below the average.
You are eligible for an experience modification when your premium in the latest year was at least $5000; or if over the prior two years, your premium averaged at least $2500.
Can I get help with my safety efforts?
All Alaska National policyholders have access to the Loss Control Resource Center located on our web site. The resource center contains training topics, safety posters, model safety programs, incident tracking tools, and a variety of other self-help information and materials. Additionally, Alaska National Loss Control Consultants are available to assist you with specific safety needs.