Colorado § 10-4-1305 - Plan of operation - annual certification.

§ 10-4-1305. Plan of operation - annual certification.

(1) (a) The board shall submit to the commissioner a proposed plan of operation consistent with the provisions of this part 13. If the board fails to do so, the commissioner shall promulgate a plan of operation or part thereof, as the case may be. The plan of operation approved or promulgated by the commissioner shall become effective and operational upon order of the commissioner.

(b) The board may change the plan of operation at any time upon the board's initiative. Adoption of the plan and any changes thereto shall require the consent of two-thirds of the members and the approval of the commissioner.

(2) The plan of operation shall provide for the prompt and efficient provision of black lung insurance and shall contain other provisions including, but not limited to:

(a) A preliminary uniform assessment of all members, based on market share as measured by workers' compensation premium in this state, for initial expenses necessary to commence operations;

(b) The establishment of necessary facilities;

(c) The management of the association;

(d) A pro rata assessment of members to defray losses and expenses;

(e) Reasonable and objective underwriting standards;

(f) The cession of reinsurance;

(g) Appointments of servicing carriers or other servicing arrangements, including contracts with data service organizations; except that the criteria for selecting service providers shall include, at a minimum, experience in administration of workers' compensation with particular emphasis on workers' compensation residual market mechanisms;

(h) Procedures for determining amounts of insurance to be provided by the association;

(i) Criteria for eligibility for coverage under the plan;

(j) Programs to encourage insurers to provide black lung insurance coverage in the voluntary market;

(k) Procedures for publication of renewal dates of employers insured under the plan;

(l) Procedures for equitable distribution of applicants to the plan;

(m) The provision of policy, claims, and loss control services to the employers insured under the plan;

(n) Review of applications for coverage with the plan;

(o) Procedures for auditing employers insured under the plan, which procedures shall be based on reasonable business judgment and designed to maximize the likelihood that the plan will collect the appropriate premiums;

(p) Servicing carrier standards, commission schedules, and other provisions relating to agents who submit business to the plan;

(q) Termination of coverage of and refusal of future coverage to an insured employer that:

(I) Fails to make payments when due;

(II) Is delinquent in payment of workers' compensation or employers' liability insurance payments or deductible payments owed to a service provider or former insurer;

(III) Fails to comply with any reasonable loss control programs recommended by the plan; or

(IV) Fails to cooperate with reasonable investigation of claims involving its employees, payroll audits, or development of loss control recommendations.

(3) The plan shall use actuarially sound rates. The plan shall also put in place rates and rating plans for new applicants that had previously been self-insured. The plan may offer rating, dividend plans, and other means to encourage employers to participate in loss prevention programs. Rates and rating plans shall be subject to approval by the commissioner using the standards set forth in part 4 of this article.

Source: L. 95: Entire part added, p. 733, § 1, effective May 23.