Enrolled HB 540: Relating to workers' compensation insurance rates; and providing for an effective date.
00Enrolled HB 540 01 Relating to workers' compensation insurance rates; and providing for an effective date. 02 _______________ 03 * Section 1. AS 21.39.030(a) is amended to read: 04 (a) Rates, including loss costs under AS 21.39.043 or any other provision 05 of law, shall be made in accordance with the following provisions: 06 (1) rates shall not be excessive, inadequate, or unfairly discriminatory; 07 (2) consideration shall be given to past and prospective loss experience 08 inside and outside this state; to the conflagration and catastrophe hazards; to a 09 reasonable margin for underwriting profit and contingencies; to dividends, savings, or 10 unabsorbed premium deposits allowed or returned by insurers to their policyholders, 11 members, or subscribers; to past and prospective expenses both countrywide and those 12 specially applicable to this state; and to all other relevant factors inside and outside 13 this state;
01 (3) the systems of expense provisions included in the rates for use by 02 an insurer or group of insurers may differ from those of other insurers or group of 03 insurers to reflect the requirements of the operating methods of the insurer or group of 04 insurers with respect to any kind of insurance, or with respect to a subdivision or 05 combination thereof for which subdivision or combination separate expense provisions 06 are applicable; 07 (4) risks may be grouped by classifications for the establishment of 08 rates and minimum premiums; classification rates may be modified to produce rates 09 for individual risks in accordance with rating plans that establish standards for 10 measuring variations in hazards or expense provisions, or both; the standards may 11 measure any differences among risks that can be demonstrated to have a probable 12 effect upon losses or expenses; 13 (5) in the case of fire insurance rates, consideration may be given to 14 the experience of the fire insurance business during a period of not more than the most 15 recent five-year period for which experience is available; 16 (6) when there is an established program to inspect new and existing 17 dwellings and the program has been certified by the director as likely to reduce the 18 incidence of fires in inspected dwellings, then in any rate plan used in this state, 19 dwellings that have been found by the inspection to meet the standards established by 20 the program shall have credits applied to the rate in amounts approved by the director. 21 * Sec. 2. AS 21.39.040(d) is amended to read: 22 (d) Subject to the exception specified in (e) of this section and not including 23 workers' compensation prospective loss cost filings and workers' compensation 24 assigned risk pool rates by a rating organization under AS 21.39.043, each filing 25 shall be on file for a waiting period of 15 days before it becomes effective, which 26 period may be extended by the director for an additional period not to exceed 15 days 27 if the director gives written notice within the waiting period to the insurer or rating 28 organization that made the filing stating that additional time for the consideration of 29 the filing is required. Upon written application by the insurer or rating organization, 30 the director may authorize a filing that the director has reviewed to become effective 31 before the expiration of the waiting period. A filing shall be considered to meet the
01 requirements of this chapter unless disapproved by the director within the waiting 02 period. 03 * Sec. 3. AS 21.39 is amended by adding a new section to read: 04 Sec. 21.39.043. Workers' compensation loss cost filings and assigned risk 05 pool rate filings. (a) On at least an annual calendar year basis, a rating organization 06 shall make a workers' compensation prospective loss cost filing and an assigned risk 07 pool rate filing, even if the rating organization determines that a change in the 08 prospective loss costs or rates is not indicated. 09 (b) A rating organization shall submit a prospective loss cost filing and an 10 assigned risk pool rate filing to the director not less than 125 days before the proposed 11 effective date of each filing. 12 (c) At the time a prospective loss cost filing and assigned risk pool rate filing 13 are submitted to the director under (b) of this section, the rating organization shall 14 make available to any member or subscriber that may be affected by the filings a 15 complete copy of the filings, together with the materials, aggregate data, and other 16 information submitted in support of the filings. The prospective loss cost and assigned 17 risk pool rate filings and supporting information are available for public inspection. 18 Before the hearing under (d) of this section, members and subscribers may submit 19 interrogatories to the rating organization, including requests for additional supporting 20 information concerning the filings. 21 (d) The director shall hold an administrative hearing on whether a prospective 22 loss cost filing meets the requirements of this chapter and whether the filing should be 23 approved, disapproved, or modified, in whole or in part. The director shall hold the 24 hearing not earlier than 20 days and not later than 25 days after the date of receipt of 25 the prospective loss cost filing by the director. The director may adopt regulations 26 governing the conduct of the hearing subject to the following: 27 (1) the director shall sit in a quasi-judicial capacity; 28 (2) an interested party may 29 (A) have a reasonable opportunity to inspect the filing and 30 supporting information and to examine witnesses, including the designated 31 actuary and other witnesses of the rating organization;
01 (B) present witnesses, oral and written testimony, and 02 documentary evidence; and 03 (C) apply for subpoenas to be issued by the director to compel 04 attendance of witnesses and the production of evidence on the interested 05 party's behalf; 06 (3) evidence and testimony from interested parties is limited to matters 07 relevant to a determination of whether the filing's prospective loss costs meet the 08 requirements of this chapter and may include a recommendation for approval, 09 disapproval, or modification of the prospective loss cost filing; 10 (4) the director shall record the hearing; 11 (5) formal rules of pleading or evidence need not be observed; 12 (6) the director may conduct part or all of a hearing by teleconference 13 and allow a witness to testify telephonically; and 14 (7) the director shall leave the hearing record open for 10 days after the 15 date of the hearing, during which time interested parties may submit additional written 16 testimony and documentary evidence concerning the prospective loss cost filing to the 17 director subject to the limitations of (3) of this subsection, and members and 18 subscribers may submit to the rating organization and to the director proposed 19 modifications to the prospective loss cost filing accompanied by the information upon 20 which the member or subscriber supports the modification. 21 (e) The director shall review the prospective loss cost filing and the evidence 22 presented through the hearing process within 15 days after the hearing. The 15-day 23 period may be extended for an additional 15 days if the director gives written notice 24 within the first 15-day period to the rating organization that additional time for 25 consideration of the filing is required. If, under (d)(7) of this section, evidence is 26 provided to support a modification and the rating organization does not include the 27 requested modification in the filing, the director shall require that the rating 28 organization rebut the evidence to show why the modification should not be included. 29 The director may request that the rating organization 30 (1) provide additional supporting information for the filing; or 31 (2) modify the filing based on evidence provided through the hearing
01 process. 02 (f) The rating organization shall file its rebuttal, if required by the director 03 under (e) of this section, and any other information requested under (e)(1) of this 04 section, or its modification of the loss cost filing under (e)(2) of this section within 15 05 days after receipt of the director's request unless additional time is allowed by the 06 director. The director shall review the rating organization's responses to the director's 07 interrogatories within 15 days after receipt of the response. The 15-day period may be 08 extended for an additional 15 days if the director gives written notice within the first 09 15-day period to the rating organization that additional time for consideration of the 10 filing is required. 11 (g) Subject to AS 21.06.060(f), all communications under this section between 12 the director, the rating organization, and any interested party concerning a prospective 13 loss cost filing, including the director's interrogatories, the rating organization's written 14 responses, modified filings and all supporting information, except for information 15 related to a particular insured, are part of the filing record and are available for public 16 inspection. 17 (h) The rating organization shall make available to a member or subscriber all 18 information that is available for public inspection under this section as soon as 19 possible after issuance or receipt of the information by the director. Other interested 20 parties may obtain copies of public documents from the director. 21 (i) The director shall issue a written order approving or disapproving the 22 prospective loss cost filing and the assigned risk pool rate filing. The order must 23 include details of the director's reasoning for approving or disapproving the filings. 24 (j) A separate prospective loss cost filing submitted solely to address an 25 amendment to AS 23.30 is not subject to the procedures of this section, but shall be 26 reviewed and approved or disapproved by the director in accordance with 27 AS 21.39.040(d). A filing under this subsection, together with all supporting 28 information and communications between the director and the rating organization, is 29 available for public inspection. 30 (k) A written order of the director under this section is subject to review by 31 appeal to the superior court. An appeal under this section shall be filed with the court
01 within 30 days after the date of the written order. The court shall determine whether 02 the filing of the appeal will operate as a stay of the order. 03 (l) A filing made under this section is subject to all other provisions of this 04 chapter except to the extent that the other provisions are inconsistent with this section. 05 AS 21.39.080 does not apply to a prospective loss cost filing by a workers' 06 compensation rating organization. 07 (m) An assigned risk pool filing is not directly subject to (d) - (h) of this 08 section. 09 (n) In this section, 10 (1) "assigned risk pool rate filing" means the filing submitted by a 11 rating organization for rates proposed to be charged by the rating organization for the 12 assigned risk pool insurance under AS 21.39.155; 13 (2) "interested party" means 14 (A) an employer association; 15 (B) an employee or labor association; 16 (C) a producer; 17 (D) a producer association; 18 (E) an insurer member or subscriber of the rating organization; 19 and 20 (F) other persons who are substantially affected by the loss cost 21 filing; 22 (3) "prospective loss cost filing" means the historical aggregate losses 23 and loss adjustment expenses upon which a portion of a rate is based, adjusted through 24 trending to a future point in time, but does not include expenses, other than loss 25 adjustment expenses, or profit. 26 * Sec. 4. This Act takes effect July 1, 2004.