Definition - Consent to (Consented) Premium - Consented premium allows the insurance carrier to deviate from their state filings for a certain Workers Comp Class Code. This is a popular way to write policies in the state of Florida. A carrier supplied factor is added to the filed rates. The "consent" is given by the signature of the insured.

This usually happens when a company is very hard to classify or the classification code that is closest in nature to the company does not account for all of the risks inherent to the specific employer. These consented premiums must be pre-approved by the department of insurance where coverage is sought.

We had reviewed a recent policy where the consented premium was 280% more than the filed classification code. The insured employer had signed off on the consented premium.

The advantages to Consented Premiums are:

• Allows a hard-to-cover employer to have Workers Comp insurance coverage
• Must be approved by the Department of Insurance

The disadvantages are:

• A much higher Workers Comp premium cost.
• If any questions come up later about the policy or audit, it is very difficult to dispute as the premiums and classification codes were consented to by the employer.
• There may have been a classification code that more closely fit the employer which could have avoided a heavy surcharge.
• The E-Mods are being calculated from a less-risky classification, even though there is a higher-risk element added to the policy.

Next Up - The West Virginia Workers Comp Forum of 4/08/08