An Act
ENROLLED 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. 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 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 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, 375.13, and
396, which relate to the CompSource Mutual I nsurance
Company Act and CompSource information not open to
public inspection; providing for codification; and
providing an effective date.
SUBJECT: Workers' compensation insurance
BE IT ENACTED BY THE PEOPLE OF THE STATE O F OKLAHOMA:
SECTION 1. AMENDATORY 36 O.S. 2021, Section 995, is
amended to read as follows: Page 2
ENR. S. B. NO. 524
Section 995. Joint Underwritin g, Joint Reinsurance Pool and
Residual Market Activities.
A. This section shall not apply to transactions involving
CompSource Mutual Insuran ce 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 investi gations, the furnishing of loss and expense
statistics or other information, or carrying on research. Joint
underwriting, joint reinsurance poo ls and residual market mechanisms
shall not be deemed an advisory organization.
C. B. Except to the extent mod ified 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 Commissioner find s that any
activity or practice of an insurer participating 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 Commissioner may issue a written order and
require the discontinuance of such activity or practice.
E. D. Every pool shall file wi th the Commissioner a copy of its
constitution, articles of incorporation, agreement o r 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 C ommissioner, 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 m ay 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, unl ess there
is created a duplication in numbering, reads as follows:
Page 3
ENR. S. B. NO. 524
A. The Insurance Com missioner 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 oth er 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 rat e-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 marke t, 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 program s 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 Com missioner 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 plan prior to the plan becoming operative. The
plan established pursuant to this section shall require that all
private carriers participate as a conditio n of their authority to
transact business in this state.
E. Prior to the operation of the plan established pursuant to
the provisions of this section, but in no event later than June 1,
2024, 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 marke t mechanism for those
insureds who would otherwise be in the assigned risk plan.
Page 4
ENR. S. B. NO. 524
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, 375.13, and 396, are hereby rep ealed.
SECTION 4. This act shall become effective Nove mber 1, 2022.
Page 5
ENR. S. B. NO. 524
Passed the Senate the 16th day of May, 2022.
Presiding Officer of the Senate
Passed the House of Representatives the 17th day of May, 2022.
Presiding Officer of the House
of Representatives
OFFICE OF THE GOVERNOR
Received by the Office of the Governor this _______ _____________
day of _________________ __, 20_______, at _______ o'clock _______ M.
By: _______________________________ __
Approved by the Governor of the State of Oklahoma this _____ ____
day of _________________ __, 20_______, at _______ o'clock _______ M.
_________________________________
Governor of the State of Oklahoma
OFFICE OF THE SECRETARY OF STATE
Received by the Office of the Secretary of State this _______ ___
day of __________________, 20 _______, at _______ o'clock _______ M.
By: _______________________________ __