IIAA, NCCI Reach Agreement to Delay Application Surcharge

September 25, 2000

The Independent Insurance Agents of America (IIAA) and the National Council of Compensation Insurers (NCCI) have reached an agreement that will delay for at least one year implementation of a non-electronic filing fee for workers compensation residual market applications. NCCI had proposed requiring agents to pay a $45 fee for all assigned-risk applications submitted via mail or telephone after Sept. 18. This hard-copy surcharge had been proposed as a way to encourage agents to use NCCI’s new online Residual Market Application Processing Service (RMAPS) system.

“Many of our agents turn to the residual markets to obtain workers compensation coverage for their clients,” said IIAA CEO Paul A. Equale. “A $45 surcharge on each workers compensation account written by a small agent could quickly erode an agent’s bottom line and threaten the agency’s ability to stay in business.”

In addition, this plan could have potentially affected the access of small business insurance consumers to coverage, because agents would have been reluctant to utilize the market on behalf of their clients, knowing that their commissions may not be adequate to even pay the fee. Under the agreement reached last week, IIAA and NCCI will work together to inform and educate agents about the RMAPS system.

RMAPS is a free, online service for agents submitting business in the residual market under NCCI’s state-approved Workers Compensation Insurance Plan. Currently, NCCI receives only 14 percent of residual market applications online.

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