As part of the previous phase of Rate Framework Reform Consultations, the WSIB published a paper entitled, WSIB Classification and Pricing System: The Case for Change (June 2013) (PDF). This document is a sample collection of real situations and issues brought forward to the WSIB's attention by individual employers or groups of employers in various industries. In addition, it includes concerns and fundamentals as assessed by the WSIB in administering the current classification and premium rate setting approaches. In short, it outlines a case for major change to the WSIB classification structure and the premium rate setting process.
The main issues identified in the paper include:
- Complex and inconsistent classification structure that is no longer relevant due to the changing Ontario economy (i .e . Standard Industrial Classification Codes [SIC]);
- The false assumption that employers undertaking a similar business activity or engaged in the same industry will present a similar risk to the system;
- Increasing divergence between business activity and risk;
- Lack of recognition of employer experience in premium rates, leading to subsidization;
- More rate groups have become statistically non-credible; and
- Inadequate experience rating programs that exclude many employers, lead to premium rate instability and the perception of negative behaviours.
To read the full document, please see the Case for Change referenced above.