ExamFX Chapter 21: Workers Compensation - General Concepts

Workers compensation rating is developed by applying a rating bureau job classification rate to each

$100 of payroll.

A premium discount is the term that describes when an insured owes a total standard premium greater than

$5,000.

What is the dollar limitation for workers compensation benefits in the state of California?

2/3 of a worker's weekly wage or a state-specified maximum payment.

In a participation plan, the insured may be eligible for which of the following?

A partial premium refund

Which of the following statements is true regarding the premium computation for workers compensation insurance?

A premium auditor has the right to examine the insured's compensation records at the end of the policy period to determine the actual premium basis.

An employer that qualifies for a self-insured workers compensation plan may wish to further limit his liability against catastrophic losses by purchasing excess insurance coverage called

Aggregate excess coverage.

Workers compensation statutes provide coverage for diseases that occur as a result of working in the employer's working environment. Which of the following is an example of a disease that would NOT be covered by such provisions?

An employee of a medical facility who suffers from a common cold

Employers liability insurance, Part Two of a standard WC&EL policy form, excludes

An intentional act that is caused by the insured.

According to the conditions of a workers compensation policy, the insurer has the right to inspect the insured workplace

At any time.

Connor, an employee for Marble Tile, Inc., is injured outside of his home state. How will the workers compensation benefits be determined?

Benefits will be provided if the state was listed on the policy information page.

All of the following statements are true regarding workers compensation insurance in California EXCEPT

Companies with fewer than 5 employees are not required to have workers compensation.

Workers compensation laws provide all of the following types of benefits EXCEPT

Compensatory benefits.

States with monopolistic state workers compensation funds

Do not allow private insurers to be licensed to write workers compensation coverage

What method of premium computation relates an employer's losses, payroll, and premiums to the rating bureau's classifications of operations?

Experience modification factor

If the premium charged for a particular insured is increased or decreased for a future period based on that insured's loss experience for a period in the recent past, the policy uses a(n)

Experience rating plan.

The voluntary compensation endorsement provides statutory coverage for which types of employees?

Farmworkers

Which federal act provides benefits to injured civilians who are employed by the federal government?

Federal Employees Compensation Act

Which of the following selections is true regarding the Workers Compensation medical care benefit?

Injured workers are entitled to receive all medical care reasonably required to cure or relieve the effects of the injury, with no deductible or coinsurance.

Which statement is true regarding Workers Compensation law in California?

Injured workers cannot sue an employer for negligence.

All of the following are true in regards to 24 Hour Coverage EXCEPT

It can be distributed through a life insurance policy.

If an employer in a state with elective workers compensation laws chooses not be to subject to the state's workers compensation laws, what does the employer lose?

Its common law defenses against liability suits BIts ability to provide group health insurance

Which of the following is NOT a duty of the employer/insured if an injury occurs at the workplace?

Make voluntary payments for treatment of the worker's injury

Which of the following statements is true regarding Workers Compensation law in California?

None of the above are true.

A plant worker for a chemicals manufacturer was recently diagnosed with a rare blood disease. She told her doctor that her job required her to handle industrial waste chemicals. Which of the following types of injuries is covered under the workers compensation policy?

Occupational disease caused or aggravated by a condition of employment

Under the Workers Compensation Reform Act, the Commissioner sets recommended, nonmandatory premium rates and then allows individual companies to add administrative overhead and expense costs which result in a final rate plan. This type of rating method is known as

Open rating plan.

The Workers Compensation permanent disability benefit pays benefits for

Permanent total disabilities and permanent partial disabilities.

Which of the following would be covered under the workers compensation rehabilitation benefits?

Rehabilitation-related travel and living expenses

All of the following are factors in rating workers compensation insurance EXCEPT

Sales.

Workers compensation statutes require employers to meet capital reserves requirements sufficient to pay any claims that might arise. Employers can meet such obligations through all of the following EXCEPT

Second injury funds programs.

In order to be covered by the U.S. Longshore and Harbor Workers Compensation Act, a worker must meet the requirements of the

Situs and status test

Which workers compensation conditions states that the first named insured will act on behalf of all insureds under the policy?

Sole representative

Which of the following is a true statement regarding who is responsible for paying the premium for Workers Compensation coverage?

The employer is responsible for paying the entire premium.

Under the workers compensation system, who is responsible for the expenses resulting from work-related injuries and occupational diseases?

The employer, regardless of whether it was at fault for the injury or disease

Which of the following is not a factor in determining rates charged by the California State Compensation Insurance Fund for insurance issued by it?

The extent to which the employees in a particular establishment have or have not persons dependent on them for support.

According to the standard workers compensation and employer liability policy form, a state should be listed in Part Three - other states' insurance of the workers compensation and employers liability policy when

The insured expects to extend operations to that state.

The voluntary compensation endorsement in a workers compensation policy provides that the insurer will pay statutory benefits to the insured person in exchange for what?

The insured person must release the employer and the insurer from further liability.

Which of the following is INCORRECT in regard to the conditions found in a workers compensation policy?

The insurer may inspect the workplace after giving the insured 5 days' notice.

An employer is on the verge of bankruptcy. To save money, the employer decides to cancel its workers compensation plan. Which of the following is true?

This business may be closed under a cease and desist order issued by the Department of Industrial Relations.

What is the purpose of California's State Compensation Insurance Fund (SCIF)?

To make workers compensation insurance available, especially to smaller companies with more limited payrolls

Shipbuilders and repairers are covered by

U.S. Longshore and Harbor Workers Compensation Act.