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SENATE FLOOR VERSION
February 22, 2021
SENATE BILL NO. 524 By: Quinn of the Senate
and
Sneed of the House
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 Commissione r to
develop and administer an assigne d 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 per iod; requiring Commissioner
to contract with certain person to continue plan;
requiring Commissioner to approve plan before
implementation; requiring 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), 85 O.S. 2011, Sections 380 and
396, as amended by Section s 45 and 46, Chapter 254,
O.S.L. 2013 (85 O.S. Supp. 2020, Sections 380 and
396), which relate to the CompSource Mutual In surance
Company Act, Volunteer Firefighters Group Insurance
Pool, and CompSource informa tion not open to public
inspection; providing for codification; and providing
an effective date.
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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 ap ply to transactions involving
CompSource Mutual Insurance Company.
B. Notwithstanding paragraph 3 of subsection A of Sectio n 992
of this title, insurers pa rticipating in joint underwriting, joint
reinsurance pools or residual market mechanisms may in conn ection
with such activity act in cooperation with each other in th e making
of rates, rating systems, policy forms, underwrit ing rules, surveys,
inspections and investigations, the furnishing of loss and expense
statistics or other information, or carrying on research. Joint
underwriting, joint reinsurance pools and resi dual market mechanisms
shall not be deemed an advisory org anization.
C. B. Except to the extent modified by this section, joint
underwriting, joint reinsurance pool and residual market mech anism
activities are subject to the other provisions of the Property and
Casualty Competitive Loss Cost Rating Act.
D. C. If, after a hearing, the Commissi oner finds that any
activity or practice of an insurer par ticipating in joint
underwriting or a pool is unfair, is unreasonable, will tend to
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lessen competition in any mark et or is otherwise inconsistent with
the provisions or purposes of the Property and Casualty Competitive
Loss Cost Rating Act, the Commissione r 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, agr eement or association,
bylaws, rules and regulations gover ning its activities, list of
members, the name and address of a resident of this state upon whom
notice, orders of th e Commissioner, or process may be served, and
any changes in amendments or change s in the foregoing.
F. E. Any residual market mechanism, plan or agreement to
implement such a mech anism, and any changes or amendments thereto,
shall be submitted in writing to the Commissioner for consideration
and approval, together with such informati on as may be reasonably
required.
SECTION 2. NEW LAW A new section of law to be codified
in the Oklahoma Statutes a s Section 608.2 of Title 36, unless there
is created a duplication in numb ering, reads as follows:
A. The Insurance Commissioner shall develop and administer an
assigned risk plan to provide workers ’ compensation insurance
coverage to employers who are un able 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.
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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 ris k 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 Insur ance 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 without
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.
D. The Insurance Commissione r may 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 on the effective date of this act.
Following this period, the Commissioner shall contract with the same
or another qualified third party to continue the admi nistration of
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the assigned risk plan , provided, however, that the Commissioner
shall approve the plan prior to the plan becoming operat ive. 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 sta te.
E. Prior to the operation of the plan established 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 Section s 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 an d 375.13), and 85 O.S. 2011,
Sections 380 and 396, as amended by Section s 45 and 46, Chapter 254,
O.S.L. 2013 (85 O.S. Supp. 2020, Sections 380 and 396), are hereby
repealed.
SECTION 4. This act shall become effective November 1, 2021.
COMMITTEE REPORT BY: COMMITTEE ON RETIREMENT AND INSURANCE
February 22, 2021 - DO PASS