An endorsement attached to a workers comp policy when a rate change filing is under consideration by the rating bureau at the time the policy is issued. This endorsement informs the employer that rates other than those shown on the policy may be applied at a future date.
Workers compensation rates are approved for use by each individual state. Rates are submitted by the insurance company to the state authority for approval. For those states using NCCI, NCCI will submit proposed rate changes to the state in question. At that point the individual state will go through it's own process of approval for the proposed rate. Once a rate has been approved or modified by the state it may then be used by the insurance company.
The Pending Rate Change Endorsement is an endorsement that may be attached to a workers compensation insurance policy. When this endorsement attached, it allows the insurance company to, at a future date without any other notification to the employer, modify a rate on the policy to those currently approved by simply endorsing the policy in place.
Bad news! It applies to increased rates.
Good news! It applies to decreased rates.
So a workers compensation policy that includes this endorsement on a renewal policy or a new business policy may be issued at one rate only to have that rate changed any time during the policy period.
Do you need another reason to read your policy? A good question to ask your insurance agent is if your workers compensation policy includes this or similar endorsements.
Not all states allow the use of this type of endorsement. Here's a few states that do not allow the WC 00 0404 or Pending Rate Change Endorsement:
There may be others so be sure to check with with your agent or if you need assistance contact an independent workers compensation consultant.