March 10, 2000 CIRCULAR LETTER TO ALL MEMBER COMPANIES Re .

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March 10, 2000CIRCULAR LETTER TO ALL MEMBER COMPANIESRe: Workers Compensation InsuranceItem B-1359(NC)- Elimination or Enhancementof Selected Basic Manual Classifications and Basic Manual Classification Advisory NotesThe Bureau has adopted and the North Carolina Commissioner of Insurance has approved a proposal to eliminate or enhanceselected Basic Manual classifications and Basic Manual classification advisory notes.The attached Filing Memorandum describes the changes which have been approved to become effective April 1, 2000,applicable to new and renewal business only.Very truly yours,Jerry G. HamrickWorkers Compensation ManagerJGH:dgEnclosureC-00-2FILING MEMORANDUMITEM B–1359 (NC)—Elimination or Enhancement of Selected Basic Manual Classifications andBasic Manual Classification Advisory Notes(To be effective 12:01 a.m. on April 1, 2000, applicable to new and renewal business only.)PURPOSE :The purpose of this item is to eliminate or enhance selected Basic Manual classifications and Basic Manual classification advisorynotes to reflect current business needs relative to these items.BACKGROUND:

BACKGROUND:The workers compensation system groups employers with similar operations so that loss costs or rates may be promulgated toreflect overall employee exposure to injury. NCCI periodically reviews individual classifications and groups of classifications byindustry to determine which, if any, should be considered for elimination, phraseology modernization or phraseology clarification.In the recent past, industry groups such as admiralty classifications, chemical manufacturing classifications and explosivesmanufacturing classes were enhanced. In this Item, we concentrate on individual classifications and propose to eliminate orupgrade those classifications identified. We additionally propose to eliminate or upgrade certain non-classification-specificadvisory notes contained in the Classifications section of the Basic Manual.Attached are fact sheets which identify and provide the basis for NCCI's action as respects the described items. Theseinformational sheets contain the following headers:FACT SHEET 1:THE MODERNIZATION OR CLARIFICATION OF CERTAIN WORKERS COMPENSATIONCLASSIFICATION PHRASEOLOGIES.FACT SHEET 2:THE MODERNIZATION, CLARIFICATION OR ELIMINATION OF CERTAIN WORKERSCOMPENSATION CLASSIFICATION ADVISORY NOTES.Following these fact sheets are two exhibits that indicate the exact changes that will take place in the Basic Manual.PROPOSAL:It is proposed that the classifications and classification advisory notes indicated in the attached exhibits be updated as shown.IMPACT:No significant premium increases or decreases are expected to occur as a result of this filing.IMPLEMENTATION:To implement this proposal, information described on the attached Exhibits 1 and 2 will be entered as indicated in the BasicManual for Workers Compensation and Employers Liability Insurance.The enclosed materials are copyrighted materials of the National Council on Compensation Insurance, Inc. ("NCCI"). The use of these materials may be governed by aseparate contractual agreement between NCCI and its licensees such as an affiliation agreement between you and NCCI. Unless permitted by NCCI, you may not copy,create derivative works, (by way of example, create or supplement your own works, databases, software, publications, manuals, or other materials) display, perform, oruse the materials, in whole or in part, in any media. Such actions taken by you, or by your direction, may be in violation of federal copyright and other commerciallaws. NCCI does not permit or acquiesce such use of its materials. In the event such use is contemplated or desired, please contact NCCI's Legal Department forpermission.ITEM B–1359 (NC) — Elimination or Enhancement of Selected Basic Manual Classifications and

Basic Manual Classification Advisory NotesFACT SHEET 1THE MODERNIZATION OR CLARIFICATION OF CERTAIN WORKERS COMPENSATIONCLASSIFICATION PHRASEOLOGIES.Code 2114: Present Phraseology: Oystermen Applies to shore or dock work only. Includes sorting, shucking, washing or packing. Codes 2114 and 2111–Cannery shallnot be assigned to the same risk unless the operations described by these classifications are conducted as separate and distinct businesses.Code 2114: Proposed Phraseology: Oyster Processing Applies to shore or dock work only. Includes sorting, shucking, washing or packing. Codes 2114 and 2111–Cannery shall not be assigned to the same risk unless the operations described by these classifications are conducted as separate and distinct businesses.Note: This change eliminates gender reference.Code 3581: Present Phraseology: Carburetor Mfg.Code 3581: Proposed Phraseology: Fuel Injection Device Mfg.: Includes the manufacture of devices used in vehicles or other equipment to monitor, meter ordistribute fuel such as but not limited to carburetors, fuel pumps, super chargers, turbo chargers and throttle bodies.Note: Carburetors are now being manufactured on a limited basis having been replaced for the most part by fuel injection devices.Code 4432: Present Phraseologies: Fountain Pen Mfg.; Pen Mfg-Fountain or BallpointCode 4432: Proposed Phraseology: Pen Mfg.: Includes the manufacture of all types of handwriting implements that use ink or similar fluids.Note: The term "Pen Mfg" is all inclusive. The references to fountain pen manufacturing are dated and unnecessary. Code 4432’s cross-reference to Pencil Mfg.Mechanical remains unaltered.Code 4611: Present Phraseology: Drug, Medicine Or Pharmaceutical Preparation—No Mfg. Of Ingredients.: Applies to compounding, blending or packing operationsonly. Codes 4611 and 4825—Drug, Medicine or Pharmaceutical Preparation Mfg. & Incidental Mfg. of Ingredients shall not be assigned to the same risk unless theoperations described by these classifications are conducted as separate and distinct businesses. Metal container mfg. to be separately rated as 3220—Can Mfg.Code 4611: Proposed Phraseology: Drug, Medicine Or Pharmaceutical Preparation, Compounding or Blending —No Mfg. Of Ingredients.: Codes 4611 and 4825—Drug, Medicine or Pharmaceutical Preparation Mfg. & Incidental Mfg. of Ingredients shall not be assigned to the same risk unless the operations described by theseclassifications are conducted as separate and distinct businesses. Metal container mfg. to be separately rated as 3220—Can Mfg.

Note: The first sentence of the current footnote (Applies to compounding, blending or packing operations only.) has been removed as it is felt that the present wordingcould be interpreted to mean that a risk providing only packaging operations of drugs, medicines or pharmaceuticals would qualify for Code 4611 instead of beingassigned to Code 8047 where such operations are appropriately assigned. The words "compounding" and "blending" have been added to the phraseology precedingthe footnote.ITEM B–1359 (NC) — Elimination or Enhancement of Selected Basic Manual Classifications andBasic Manual Classification Advisory NotesFACT SHEET 1Code 4825 Present Phraseology: Drug, Medicine Or Pharmaceutical Preparation Mfg. & Incidental Mfg. Of Ingredients. Codes 4825 and 4611—Drug, Medicine orPharmaceutical Preparation—No Mfg. of Ingredients shall not be assigned to the same risk unless the operations described by these classifications are conducted asseparate and distinct businesses. Mfg. of metal containers to be separately rated as 3220—Can Mfg.Code 4825 Proposed Phraseology: Drug, Medicine Or Pharmaceutical Preparation Mfg.— Includes Mfg. of Ingredients.: Codes 4825 and 4611—Drug, Medicine orPharmaceutical Preparation—No Mfg. of Ingredients shall not be assigned to the same risk unless the operations described by these classifications are conducted asseparate and distinct businesses. Mfg. of metal containers to be separately rated as 3220—Can Mfg.Note: This code’s phraseology was changed to eliminate the word "incidental" as it is felt this word could be interpreted to mean that the amount of manufacturing ofingredients is in some way limited to what would be considered an "incidental" or small amount.Code 3400 Present Phraseology: Metal Goods Mfg. NOC.Code 3400 Present Phraseology: Metal Stamping Mfg.—Applicable to mass production manufacturing of stamped metal articles including, but not limited to, licenseplates, tags, toys, pie plates, buckets and waste baskets.Code 3400 Proposed Phraseology: Metal Stamped Goods Mfg. NOC.Code 3400 Proposed Phraseology: Metal Stamping Mfg. NOC—Applicable to mass production manufacturing of stamped metal articles including, but not limited to,license plates, tags, toys, pie plates, buckets and waste baskets.Note: The phraseology Metal Goods Mfg. is too broad and can be construed to contemplate operations that manufacture metal goods on a much broader basis than isintended by this class. The addition of the word "stamped" limits the scope of this classification.NOC is added to the cross-referenced phraseology to make it similar to its companion phraseology.

ITEM B–1359 (NC) — Elimination or Enhancement of Selected Basic Manual Classifications andBasic Manual Classification Advisory NotesFACT SHEET 2THE MODERNIZATION, CLARIFICATION OR ELIMINATION OF CERTAIN WORKERSCOMPENSATION CLASSIFICATION ADVISORY NOTES.Page C2 – Basic ManualPresent Phraseology: Flight testing by mfr. – prototype or experimental aircraft – flying crew. Refer to the rating organization having jurisdiction for the applicableclassification.Proposed Phraseology: Flight testing by mfr. – prototype or experimental aircraft – flying crew. Assign exposure to the one aircraft classification that best describes thenature of the aircraft being tested.Note: "Refer to the rating organization having jurisdiction" is obsolete.Page C25 – Basic ManualPresent Phraseology: Federal war housing dismantling or wrecking. See wrecking.Proposed Phraseology: NONENote: This entry is obsolete.

ITEM B–1359 (NC) — Elimination or Enhancement of Selected Basic Manual Classifications andBasic Manual Classification Advisory NotesEXHIBIT 1THE MODERNIZATION OR CLARIFICATION OF CERTAIN WORKERS COMPENSATION CLASSIFICATION PHRASEOLOGIESBASIC MANUALCLASSIFICATIONS21143581Oystermen Oyster Processing Applies to shore or dock work only. Includes sorting,shucking, washing or packing. Codes 2114 and 2111 – Cannery shall not be assigned tothe same risk unless the operations described by these classifications are conducted asseparate and distinct businesses.Carburetor Mfg. Fuel Injection Device Mfg. Includes the manufacture of devicesused in vehicles or other equipment to monitor, meter or distribute fuel such as, but notlimited to, carburetors, fuel pumps, super chargers, turbo chargers and throttle bodies.Fountain Pen Mfg.44324432Pen Mfg-Fountain or Ballpoint4432Pen Mfg. Includes the manufacture of all types of handwriting implements that useink or similar fluids.4611Drug, Medicine Or Pharmaceutical Preparation, Compounding or Blending —NoMfg. Of Ingredients Applies to compounding, blending or packing operations only.Codes 4611 and 4825—Drug, Medicine or Pharmaceutical Preparation Mfg. &Incidental Mfg. of Ingredients shall not be assigned to the same risk unless the operationsdescribed by these classifications are conducted as separate and distinct businesses.Metal container mfg. to be separately rated as 3220—Can MfgDrug, Medicine Or Pharmaceutical Preparation Mfg. & Incidental4825Includes Mfg. Of Ingredients Codes 4825 and 4611—Drug, Medicine orPharmaceutical Preparation—No Mfg. of Ingredients shall not be assigned to the samerisk unless the operations described by these classifications are conducted as separateand distinct businesses. Mfg. of metal containers to be separately rated as 3220—CanMfg.

Metal Stamped Goods Mfg. NOC34003400Metal Stamping Mfg. NOC Applicable to mass production manufacturing of stampedmetal articles including, but not limited to, license plates, tags, toys, pie plates, bucketsand waste baskets.ITEM B–1359 (NC) —Elimination or Enhancement of Selected Basic Manual Classifications andBasic Manual Classification Advisory NotesEXHIBIT 2THE MODERNIZATION, CLARIFICATION OR ELIMINATION OF CERTAIN WORKERS COMPENSATION CLASSIFICATION ADVISORY NOTESBASIC MANUALCLASSIFICATIONSFlight testing by mfr. – prototype or experimental aircraft – flying crew. Refer to the rating organization having jurisdiction for theapplicable classification. Assign exposure to the one aircraft classification that best describes the nature of the aircraft being tested.Federal war housing dismantling or wrecking. See wrecking.

Code 4432: Proposed Phraseology: Pen Mfg.: Includes the manufacture of all types of handwriting implements that use ink or similar fluids. Note: The term "Pen Mfg" is all inclusive. The references to fountain pen manufacturing are dated and unnecessary. Code 4432’s cross-reference to Pencil Mfg.-Mechanical remains unaltered.

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