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POLICYHOLDER NOTICE <br />CALIFORNIA WORKERS' COMPENSATION <br />mmill,wk iiime3Ai <br />Pursuant to Section 11752.8 of the California Insurance <br />Code, we are providing you with an explanation of the <br />California workers' compensation rating laws. <br />We establish our own rates for workers' <br />compensation. Our rates, rating plans, and related <br />information are filed with the insurance <br />commissioner and are open for public inspection. <br />2. The insurance commissioner can disapprove our <br />rates, rating plans, or classifications only if he or she <br />has determined after public hearing that our rates <br />might jeopardize our ability to pay claims or create a <br />monopoly in the market. A monopoly is defined by <br />law as a market where one insurer writes 20% or <br />more of that part of the California workers' <br />compensation insurance that is not written by the <br />State Compensation Insurance Fund. If the <br />insurance commissioner disapproves our rates, <br />rating plans, or classifications, he or she may order <br />an increase in the rates applicable to outstanding <br />policies. <br />3. Rating organizations may develop pure premium <br />rates that are subject to the insurance <br />commissioner's approval. A pure premium rate <br />reflects the anticipated cost and expenses of claims <br />per $100 of payroll for a given classification. Pure <br />premium rates are advisory only, as we are not <br />required to use the pure premium rates developed by <br />any rating organization in establishing our own rates. <br />4. We must adhere to a single, uniform experience <br />rating plan. If you are eligible for experience rating <br />under the plan, we will be required to adjust your <br />Form PN 04 99 02 B (Ed. 5-02) Printed in U.S.A. <br />premium to reflect your claim history. A better claim <br />history generally results in a lower experience rating <br />modification; more claims, or more expensive <br />claims, generally result in a higher experience rating <br />modification. The uniform experience rating plan, <br />which is developed by the insurance rating <br />organization designated by the insurance <br />commissioner, is subject to approval by the <br />insurance commissioner. <br />5. A standard classification system, developed by the <br />insurance rating organization designated by the <br />insurance commissioner, is subject to approval by <br />the insurance commissioner. The standard <br />classification system is a method of recognizing and <br />separating policyholders into industry or <br />occupational groups according to their similarities <br />and/or differences. We can adopt and apply the <br />standard classification system or develop and apply <br />our own classification system, provided we can <br />report the payroll, expenses, and other costs of <br />claims in a way that is consistent with the uniform <br />statistical plan or the standard classification system. <br />6. Our rates and classifications may not violate the <br />Unruh Civil Rights Act or be unfairly discriminatory. <br />7. We will provide an appeal process for you to appeal <br />the way we rate your insurance policy. The process <br />requires us to respond to your written appeal within <br />30 days. If you are not satisfied with the result of <br />your appeal, you may appeal our decision to the <br />insurance commissioner. <br />Rime Management DMsian <br />REVIEWED&APPROVED BY: <br />'� Risk Management Analyst <br />