§ 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.

Legislative History

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