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STATE OF OKLAHOMA
1st Session of the 58th Legislature (2021)
COMMITTEE SUBSTITUTE
FOR ENGROSSED
SENATE BILL NO. 524 By: Quinn of the Senate
and
Sneed of the House
COMMITTEE SUBSTITUTE
An Act relating to workers' compensation insurance;
amending 36 O.S. 2011, Section 995, as amended by
Section 18, Chapter 254, O.S.L. 2013 (36 O.S. Supp.
2020, Section 995), which relates to joint
underwriting and reinsurance; removing exception of
application of act to CompSource Mutual Insurance
Company; directing the Insurance Commissioner to
develop and administer an assigned risk plan
providing workers' compensation insurance to certain
employers; requiring plan include qualification and
termination terms; requiring that certain employers
receive coverage under plan; authorizing Commissioner
to designate third party to develop and administer
plan for certain time period; requiring Commissioner
to contract with certain person to continue plan;
requiring Commissioner to approve plan before
implementation; requi ring all private carriers to
participate in plan; authorizing CompSource to
provide coverage to certain persons for certain time
period; repealing Sections 1, 2, 3, 4, 5, 6, 7, 8, 9,
10, 11, 12 and 13, Chapter 254, O.S.L. 2013 (85 O.S.
Supp. 2020, Sections 375.1, 375.2, 375.3, 375.4,
375.5, 375.6, 375.7, 375.8, 375.9, 375.10, 375.11,
375.12 and 375.13) and 85 O.S. 2011, Section 396, as
amended by Section 46, Chapter 254, O.S.L. 2013 (85
O.S. Supp. 2020, Section 396), which relate to the
CompSource Mutual In surance Company Act and
CompSource information not open to public inspection;
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providing for codification; and providing an
effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 36 O.S. 2011 , Section 995, as
amended by Section 18, Chapter 254, O.S.L. 2013 (36 O.S. Supp. 2020,
Section 995), is amended to read as follows:
Section 995. Joint Underwriting, Joint Reinsurance Pool and
Residual Market Activities.
A. This section shall not apply to transactions involving
CompSource Mutual Insurance Company.
B. Notwithstanding paragraph 3 of subsection A of Section 992
of this title, insurers participating in joint underwriting, joint
reinsurance pools or residual market mechanisms may in connection
with such activity act in cooperation with each other in the making
of rates, rating systems, policy forms, underwriting rules, surveys,
inspections and investigations, the furnishing of loss and expense
statistics or other information, or carrying on res earch. Joint
underwriting, joint reinsurance pools and residual market mechanisms
shall not be deemed an advisory organization.
C. B. Except to the extent modified by this section, joint
underwriting, joint reinsurance pool and residual market mechanism
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activities are subject to the other provisions of the Property and
Casualty Competitive Loss Cost Rating Act.
D. C. If, after a hearing, the Commissioner finds that any
activity or practice of an insurer participating in joint
underwriting or a pool is un fair, is unreasonable, will tend to
lessen competition in any market or is otherwise inconsistent with
the provisions or purposes of the Property and Casualty Competitive
Loss Cost Rating Act, the Commissioner may issue a written order and
require the discontinuance of such activity or practice.
E. D. Every pool shall file with the Commissioner a copy of its
constitution, articles of incorporation, agreement or association,
bylaws, rules and regulations governing its activities, list of
members, the name and address of a resident of this state upon whom
notice, orders of the Commissioner, or process may be served, and
any changes in amendments or changes in the foregoing.
F. E. Any residual market mechanism, plan or agreement to
implement such a mechanism, and any changes or amendments thereto,
shall be submitted in writing to the Commissioner for consideration
and approval, together with such information as may be reasonably
required.
SECTION 2. NEW LAW A new section of law to be co dified
in the Oklahoma Statutes as Section 608.2 of Title 36, unless there
is created a duplication in numbering, reads as follows:
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A. The Insurance Commissioner shall develop and administer an
assigned risk plan to provide workers' compensation insurance
coverage to employers who are unable to procure coverage in the
voluntary market. In addition to the requirements of subsection B
of this section, the plan shall include, but not be limited to,
qualifications for and termination of coverage.
B. To qualify for coverage under the plan, an employer shall
have been declined coverage by at least two unaffiliated insurers
and shall provide documentation to the Commissioner that the
unaffiliated insurers are unwilling to provide coverage at any
premium level that is reasonably related to the risk presented by
the employer.
C. Any employer satisfying the requirements of subsection B of
this section, and any other qualifications established by the
Commissioner, shall be provided coverage at a premium level to be
determined or approved by the Insurance Commissioner. Premiums
shall be actuarially sound, consistent with industry standards for
classification and rate -making methodologies and calculated to
enable the plan to be self -sustaining and able to operate with out
subsidies from employers and insurers in the voluntary market, to
the extent possible. Rates shall not be excessive, inadequate or
unfairly discriminatory, pursuant to Section 902 of Title 36 of the
Oklahoma Statutes.
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D. The Insurance Commissioner ma y designate a third party,
including a private carrier or rating organization with substantial
experience in developing and administering similar programs in other
states, to develop and administer the assigned risk plan for a
three-year period beginning o n the effective date of this act.
Following this period, the Commissioner shall contract with the same
or another qualified third party to continue the administration of
the assigned risk plan, provided, however, that the Commissioner
shall approve the pl an prior to the plan becoming operative. The
plan established pursuant to this section shall require that all
private carriers participate as a condition of their authority to
transact business in this state.
E. Prior to the operation of the plan establi shed pursuant to
the provisions of this section, but in no event later than January
1, 2023, CompSource Mutual Insurance Company, a private, domestic
mutual insurance company incorporated in this state and regulated by
the Insurance Department, successor -in-interest to CompSource
Oklahoma, shall serve as the residual market mechanism for those
insureds who would otherwise be in the assigned risk plan.
SECTION 3. REPEALER Sections 1, 2, 3, 4, 5, 6, 7, 8, 9,
10, 11, 12 and 13, Chapter 254, O.S.L. 2013 (85 O.S. Supp. 2020,
Sections 375.1, 375.2, 375.3, 375.4, 375.5, 375.6, 375.7, 375.8,
375.9, 375.10, 375.11, 375.12 and 375.13) and 85 O.S. 2011, Section
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396, as amended by Section 46, Chapter 254, O.S.L. 2013 (85 O.S.
Supp. 2020, Section 396), are hereby repealed.
SECTION 4. This act shall become effective November 1, 2021.
58-1-8024 AMM 03/31/21