In California, the ownership of a business can have an impact on its experience modification and it is important that insurers, agents and brokers notify the WCIRB when ownership changes occur.
Insurers, agents and brokers can log into WCIRB Connect and use the Ownership Information Submission tool to notify the WCIRB of a change in ownership. Those who submit ownership information to the WCIRB on behalf of their organization and do not have WCIRB Connect user accounts can go to the WCIRB Connect page to find out how to obtain a WCIRB Connect user account.
The WCIRB no longer accepts ownership information submitted using WCIRB Form 601, Notification of Change in Ownership and/or Combinability of Entities Form. Learn more about using the Ownership Information Submission tool on WCIRB Connect.
Shown below are several common scenarios that may be reported to the WCIRB.
Separation of Entities
For the last 12 years, EatWell, Inc., an organic foods store, and City Fitness LLC, a fitness club, have been included on one workers' compensation policy and have been combined for experience rating purposes. The common ownership between these two entities has always been exactly 50%. However, common ownership of more than 50% is required for separate entities to be included on one workers' compensation policy and to be combined for experience rating purposes.
Jane Smith, an underwriter with XYZ Insurance Company, discovered this error and issued a separate policy for each entity. Additionally, Jane requested that the WCIRB separate these entities on prior policies by using the Ownership Information Submission tool on WCIRB Connect.
Combination of Entities
Emma Ployer is the individual sole proprietor of Mamma Emma's Cafe. She is also a majority owner in Ellen Em Mo Peas, Inc., a frozen vegetable distribution company. The ownership of these two entities has not changed. Because there is common ownership between these two entities in excess of 50%, they must be combined for experience rating purposes.
To request a combination, Bill Jones, the insurance agent for Emma Ployer, provided ownership information to the WCIRB via WCIRB Connect for review.
Jim Ranch is the owner of Jim's Salad Shop. On July 2, 2007, Jim Ranch acquired Part Auto Repair from a partnership comprised of Jane Doe, John Doe and Jim Doe. The sellers of Part Auto Repair did not own any other entities.
To combine Part Auto Repair and Jim's Salad Shop for experience rating purposes, Tracy Lee, Jim's insurance agent, provided ownership information to the WCIRB via WCIRB Connect for review.