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The new code, 00-41-CC, Closing Prior Term, has been programmed and is now available for use. This code is not available through the IAIABC EDI Standard or your Proof of Coverage (POC) vendor.
The effective processing of POC data is dependant upon the submission of policy transactions with accurate identifiable information, submitted in a logical, sequential manner. Deviations or errors in this process produce open policies leaving a carrier with an exposure of extended liability for claims and penalties.
As stated in the WCIC Bulletin-2010 #1, use of this new code will be limited to certain POC processing scenarios. The Board has identified the following two scenarios when the new code can be used:
- Renewals submitted with a prior policy number that was not previously reported to the Board. As a result, the prior policy terms are not closed and, instead, remain in an open status. No IAIABC triplicate code currently exists to correct a prior policy number.
- Establishing transactions submitted out of policy year sequence or order. Establishing transactions include Binder, New Policy, Renewal, and Add Jurisdiction. Submission or resubmission of policies out of policy year sequence can leave policy terms in an open status.
The new code cannot be used for any other reason. The Board will monitor carriers' use of the new transaction code to ensure that it is being used only for the two scenarios described above. The Board will re-open any policy that was closed due to the improper use of the transaction code and will then subsequently cancel the policy via the open expired policy cancellation program. Given that the subsequent Board cancellation can occur months after the improperly used transaction code, the penalty will be significantly higher than if the correct cancellation reason was initially submitted. The carrier's POC performance will be adjusted and the Board will consider the improperly used transactions when evaluating future carrier appeals.
The new transaction code is not subject to penalty or performance measurement. It is expected that carriers will continue to monitor their processes, both technical and business, to reduce the need for using this exception process.
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