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ENGROSSED HOUSE AMENDME NT
TO
ENGROSSED 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 period; 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 Sections 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 information not open to public
inspection; providing for codification; and providing
an effective date.
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AMENDMENT NO. 1. Strike the title, enacting clause, and entire bill
and insert:
"An Act relating to workers' compensation insurance;
amending 36 O.S. 2021, 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 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 period;
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 85 O.S. 2021,
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, 380 and
396, which relate to the CompSource Mutual In surance
Company Act, Volunteer Firefighters Group Insurance
Pool, and CompSource information not open to public
inspection; 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. 2021, 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.
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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 i n connection
with such activity act in cooperation with each other in the 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 car rying on research. Joint
underwriting, joint reinsurance pools and residual 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 marke t mechanism
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
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 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
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notice, orders of the 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 mechanism, 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 as 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 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
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Commissioner, shall be provided coverage at a premium le vel 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 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 Commissioner 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
the assigned risk plan , provided, however, that the Commissioner
shall approve the plan 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 sta te.
E. Prior to the operation of the pla n established pursuant to
the provisions of this section, but in no event later than June 1,
2024, CompSource Mutual Insurance Company, a private, domestic
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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 85 O.S. 2021, 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, 380 and 396, are hereby repealed.
SECTION 4. This act shall become effective November 1, 2022."
Passed the House of Representatives the 19th day of April, 2022.
Presiding Officer of the House of
Representatives
Passed the Senate the ____ day of __________, 2022.
Presiding Officer of the Senate
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ENGROSSED 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 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; 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 information not open to public
inspection; providing for codification; and providing
an effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
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SECTION 5. 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 Sectio n 992
of this title, insurers pa rticipating 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, 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 residual 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 mechanism
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
lessen competition in any mark et or is otherwise inconsistent with
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the provisions or purposes of the Property and Casualty Competitive
Loss Cost Rating Act, the Commissione r may issue a written order an d
require the discontinuance of such acti vity 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 residen t 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 mechanism, and any changes or ame ndments thereto,
shall be submitted in writing to the Commissioner for consideration
and approval, together with such informati on as may be reasonably
required.
SECTION 6. NEW LAW A new secti on of law to be codified
in the Oklahoma Statutes as 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 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 covera ge.
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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 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 prem ium 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 without
subsidies from employ ers 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 Commissioner 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 becom ing 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 sta te.
E. Prior to the operation of t he 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 7. 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 8. This act shall become effective November 1, 2021.
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Passed the Senate the 8th day of March, 2021.
Presiding Officer of the Senate
Passed the House of Repr esentatives the ____ day of __________,
2021.
Presiding Officer of the House
of Representatives