Underwriting Guidelines

  1. Review audits for the previous four (4) years. ("DEC" sheet for the current policy.)

    • premium for each year

  2. Review loss runs for the previous four (4) years, notably:

    • loss ratios for each year (loss ratio = losses / premium)

    • aggregate loss ratio for all four (4) years

    • loss frequency - upward or downward trend

  3. The E-Mod will be calculated with the information from numbers one (1) & two (2) above.

    • An E-Mod of 1.50 or higher requires special acceptance from the Fund's Excess Carrier

  4. Review statement of net worth and/or financial statement (Per KRS Chapter 304.50).

  5. Any prospective member who uses a restricted classification (see below), will be subject to approval by the Fund's Excess Carrier.

  6. Prospective member has 30 days after policy inception date to provide proof of membership to one (1) of the Fund's seven (7) participating Trade Associations. Membership in a Trade Association must be maintained for the duration of membership in the Fund.

  7. Soliciting Agent to the Fund is required to have proof of membership to one (1) of the participating Trade Associations.

  8. Prospective Members may be subject to a safety inspection by the Fund's Safety Engineer prior to admittance to the Fund.

  9. The following payroll class codes are RESTRICTED and can only be used if specifically accepted by the Fund's Excess Carrier:

    • 106 - Tree Pruning, Spraying, Repairing - All Operations & Dr.

    • 1164 - Mining NOC - Not Coal - Underground & Drivers

    • 1710 - Stone Crushing & Drivers

    • 1624 - Quarry NOC & Drivers

    • 1803 - Stone Cutting or Polishing NOC & Dr.

    • 3726 - Boiler Installation or Repair - Steam

    • 5037 - Painting - Metal Structures - Over Two Stories in Height & Drivers

    • 5040 - Iron/Steel Erection - Frame Structures

    • 5057 - Iron/Steel Erection - NOC

    • 5059 - Iron/Steel Erection - Frame Structures Not Over Two Stories in Height

    • 5160 - Elevator Erection or Repair

    • 5222 - Concrete Construction in Connection with Bridges or Culverts

    • 5551 - Roofing - All Kinds & Drivers

    • 5610 - Cleaners - Debris Removal

    • 6003 - Pile Driving

    • 6204 - Drilling NOC & Drivers

    • 7421 - Aviation - Transportation of Personnel - In Conduct of Employer's Business - Flying Crew

    • 7538 - Electric Light or Power Line Construction & Drivers

    • 7600 - Telecommunications Co. - Cable TV or Satellite - All Other Employees & Drivers

  10. Miscellaneous Membership Requirements:

    • No prospective member accepted with an annual normal premium under $1,000.00.

    • 25% deposit up front of normal annual premium (modified/discounted) to be held in escrow for duration of membership in the Fund.

    • A $100.00 surcharge must be tendered up front and paid once a year. This processing fee is an annual expense and defrays the cost associated with annual membership expenses (i.e. annual premium audit).

    • If the member is a monthly payor, the first month's premium is due within 30 days of acceptance.

    • If the member is an annual payor, the premium is due upon renewal date.

  11. Quarterly Agent's commission - 10.0% on all new and renewal business.

  12. All members are subject to a final annual premium audit.

    • All premiums will be adjusted accordingly by way of a refund or additional billing.

  13. Current AGC/SIF "(aggregate/assessment) tax".

    • This is subject to change by resolution of the Kentucky Workers' Compensation Funding Commission.

  14. Additional general underwriting criteria reviewed for membership consideration:

    • Own, operate or lease an aircraft/watercraft?

    • Exposure to flammables, explosives, caustics or fumes?

    • Exposure to radioactive materials?

    • Work performed underground or above 15 feet?

    • Work performed on barges, vessels or docks?

    • Engagement in any other type of business?

    • Use of ANY sub-contractors? (Certificates of Insurance required)

    • Subletting without CI's?

    • Formal safety program in operation?

    • Is group/individual transportation provided?

    • Employees under 16 or over 60 years of age?

    • Part-time employees or seasonal help?

    • Employees with physical handicaps?

    • Work out of state? (The AGC/SIF provides out of state workers' compensation coverage for regularly employed Kentucky employees ONLY. No coverage in the states of Florida, Illinois, New Jersey or New York.)

    • Sponsorship of athletic teams, etc?

    • Requirement of pre-employment physicals?

    • Previous declination, cancellation or non-renewal prior to application to the AGC/SIF? If so, what was the reason?

    • Any previous OSHA violations and subsequent fines?

    • Any exposure to asbestos? (The Fund does not cover asbestos-related exposures.)

    • Any exposure to coal? (The Fund does not cover coal-related operations such as hauling or mining.)

  15. If a prospective member has NEVER carried workers' compensation insurance before, or if the company has less than four (4) years of workers' compensation insurance experience, the Underwriting Department will need to review the following information before it will consider offering a quote:

    • The exact date the company started business. If workers' compensation insurance was carried, please identify the years.

    • Work experience of the officers of the company (i.e. 23 years of work experience as a Mason).

    • A statement from the owner or officer stating the following: The owner, nor any of his/her employees, have ever filed a workers' compensation claim or passed one on to another party. This statement must be signed and dated.

    • Are sub-contractors used? If so, how much of the total payroll can be attributed to sub-contract labor? Are any uninsured sub-contractors hired? If so, have any claims been filed by these uninsured sub-contractors? (A prospective member with less than one (1) full year of workers' compensation experience whose estimated payroll is attributable to subcontract, contract, casual or 1099 labor, is not eligible for Fund membership.)

    • Prospective members may be subject to a pre-enrollment safety inspection.

    • It is important to note that additional information may be requested depending on each individual risk.

  16. Please be advised that reapplication for membership to the Fund does not constitute a reinstatement of any previous policies with the Fund.

    All FORMER Fund Members REAPPLYING for membership to the Fund will be subject to identical underwriting criteria reserved for new applicants. Additionally, any premium disputes arising from a previous policy must be resolved in order to proceed with a quote. Finally, all former Fund members cancelled for continuous adverse claims experience must wait a minimum of two (2) years before reapplying.

  17. It is important that the Trustees, Administrators, Staff, Agents and Members understand, to the best of their ability, the Fund's WC & EL Policy and the Kentucky insurance laws and regulations which govern self-insured groups (KRS Chapter 304.50 and 342).

Sponsoring Trade Associations