This bill adds a new legislative findings section promoting transparency in the annual proposed premium rates for Washington’s workers’ compensation program and amends RCW 51.16.035. The amendment requires the department to classify occupations and industries by degree of hazard and to set basic premium rates that are the lowest necessary to maintain actuarial solvency of the accident and medical aid funds under recognized insurance principles and that are designed to attempt to limit premium rate fluctuations. It directs the department to adopt rules for premium calculation, collection, and a rating system, and allows annual or as-needed rate readjustments on dates the department designates. The workers’ compensation advisory committee must review the state auditor’s reports under RCW 51.44.115 and may recommend appropriate contingency reserve levels and circumstances for premium dividends or temporary rate reductions, including notification practices. The department may treat each individual retrospective rating group as a single employing entity for purposes of dividends or premium discounts under RCW 51.18.010. The bill imposes transparency and reporting requirements: the department must publish the actuarially indicated rate for each risk classification as part of its proposed premium rates for the upcoming year. If the director limits a maximum premium increase for any classification below the actuarially indicated rate, the department must publish and submit information showing which classifications were limited and the proposed rates, what the rates would have been under actuarial principles without the limitation, and the premium increase imposed on other risk classes as a result; this information must be on the department’s website, included with the proposed premium rates, and sent to appropriate legislative committees and the workers’ compensation advisory committee. This is an administrative and procedural change that creates a new findings section and modifies an existing statute (RCW 51.16.035) to add rate-setting, transparency, and reporting duties; it does not create new crimes or change criminal penalties. The extracted text does not state an effective date, does not define “department,” “director,” or which legislative committees are meant by “appropriate committees of the legislature,” and does not include the underlying auditor report data the bill references.

If enacted, the Department of Labor and Industries would have to group jobs by hazard and set basic workers’ compensation premiums at the lowest level that still keeps the accident and medical funds actuarially solvent, while trying to avoid big year-to-year swings. The department would also have to publish the actuarially indicated rate for every risk class with its annual proposed rates and explain any decision to hold a class’s increase below that actuarial figure, including which classes were limited, what their rates would have been, and how much other classes had to pick up. The department may adjust rates each year (or more often), adopt detailed rules for rating and collection, and treat each retrospective rating group as a single employer for dividends or discounts; the workers’ compensation advisory committee must review state auditor reports and can recommend reserve levels or use of surplus funds for temporary reductions or dividends. Employers and their risk classes are most directly affected: some employers may see smaller-than-actuarial increases while others face larger increases to make up the difference, and employer groups using retrospective rating plans may gain or lose access to dividends depending on how groups are treated. The department and the advisory committee will have greater transparency and reporting duties, which could raise administrative work and public scrutiny. There are funding tradeoffs: holding some class increases below actuarial levels can reduce near-term revenue to the funds and shift costs elsewhere or increase reliance on contingency reserves; important details such as the bill’s effective date, which legislative committees must receive the information, and the exact actuarial methods to be used are not specified in the extracted text.