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Missouri Revised Statutes
Chapter 287 http://www.moga.state.mo.us/statutes/ Part 5
287.865. 1. Moneys collected by or on behalf of the division of workers' compensation and dispersed to the corporation shall be vested in the corporation and shall not thereafter be deemed state property and shall not thereafter be subject to appropriation by the legislature, the treasurer, or any other state agency. 2. All moneys in the insolvency fund, exclusive of administrative costs reasonably necessary to conduct the business of the corporation, as determined at the discretion of the board, as described in section 287.867, shall be used solely to compensate persons entitled to receive workers' compensation benefits from a Missouri self-insurer which is unable to meet its workers' compensation benefit obligations and to defray the expenses of the fund. 3. The board of directors of the corporation shall direct the investment of the moneys in the fund, and all returns on the investments shall be retained in the fund. The corporation shall, at the request of the director of the division, annually submit to an audit by an independent certified public accountant or by such other person or persons as the director deems sufficient, and a copy of the audit report shall be transmitted to the Missouri division of workers' compensation and to the corporation. 4. The board of directors of the corporation shall, based on such information as is reasonably available, report to the director of the division upon all matters germane to the solvency, liquidation, rehabilitation or conservation of any workers' compensation self-insurer and such reports shall not be deemed public documents under the provisions of section 610.010, RSMo, or any other law. 5. Upon creation of the insolvency fund pursuant to the provisions of section 287.867, the corporation is obligated for payment of compensation under this chapter to insolvent members' employees resulting from incidents and injuries to the extent of covered claims existing prior to the issuance of an order of liquidation against the member employer with a finding of insolvency which has been entered by a court of competent jurisdiction in the member employer's state of domicile or of this state under the provisions of sections 375.950 to 375.990, RSMo, in which the order of liquidation has not been stayed or been the subject of a writ of supersedeas or other comparable order; or prior to the date of determination by the board of directors that the member employer has fully expended all surety bonds, insurance or reinsurance, and all other available assets and is not able to pay compensation benefits at that time. All incidents giving rise to claims for compensation under this chapter must occur during the year in which such insolvent member is a member of the guaranty fund and was assessable pursuant to the plan of operation, except as provided for certain claims existing prior to August 28, 1992, pursuant to the provisions of subsection 7 of this section, and the employee must make timely claim for such payments according to procedures set forth by a court of competent jurisdiction over the delinquency or bankruptcy proceedings of the insolvent member. Any proceeds derived by such claim of the employee in bankruptcy shall be an offset of any amounts due and owing to the employee under the workers' compensation law. Any such obligation of the corporation includes only the amount due the injured worker or workers of the insolvent member under this chapter. In no event is the corporation obligated to a claimant in an amount in excess of the obligation of the insolvent member employer. The corporation shall be deemed the insolvent employer for purposes of this chapter to the extent of its obligation on the covered claims and, to such extent, shall have all the rights, duties, and obligations of the insolvent employer as if the employer had not become insolvent. However, in no event shall the corporation be liable for any penalties or interest. 6. The corporation may: (1) Request that the director revoke any member employer's authority to act as a qualified private sector individual self-insurer if the self-insurer member fails to maintain membership in the corporation or fails to pay the assessments levied by the division under sections 287.860 to 287.885; (2) Sue or be sued, including appearing in, prosecuting or defending and appealing any action on a claim brought by or against the corporation. The corporation shall have full rights of subrogation against any source of payment or reimbursement for payments by the corporation on behalf of a Missouri workers' compensation self-insurer. The corporation shall have a right of recovery through the maintenance of an action against any third party, other than a coemployee, who is in any way responsible or liable for injury or death to a covered worker. The corporation is also authorized to take all necessary action, including bringing an action at law or in equity to seek any available relief, including any action against any workers' compensation self-insurer, where the self-insurer has not paid all assessments levied by the division or the board of directors of the corporation. If the corporation is required to bring an action at law or in equity to enforce any obligations, rights or duties as regards a workers' compensation self-insurer, the court may award reasonable attorney's fees and costs to the corporation; (3) Employ or retain such persons, including utilization of an in-house or a third-party administrator, fund manager, attorney, certified public accountant, auditor or other such person, and sufficient clerical staff, experts, professional staff and equipment, including sharing clerical staff and other costs with the division upon a mutually agreed upon paid basis, as are necessary to handle the claims and perform other duties of the corporation; (4) Borrow funds, including authority to issue bonds or purchase excess or any appropriate insurance or reinsurance, necessary to effectuate the purposes of sections 287.860 to 287.885 or to protect the assets of this fund and the members of the board and their employees in accordance with the plan of operation; (5) Negotiate and become a party to such contracts and perform such other acts as are necessary or proper to effectuate the purpose of sections 287.860 to 287.885; (6) Become members of any trade association whose purpose includes furthering the understanding of the self-insurance industry in the state of Missouri, including the National Council of Self-Insurers, or other appropriate state, regional or national organizations; (7) Review, on its own motion, or at the request of the director, all applications for initial and for membership renewal in the corporation, including financial or other appropriate background studies, actuarial studies, and other information or guidelines as may be necessary to ensure that the member is fully complying with the privileges of self-insurance. It shall be the primary duty of the division to provide adequate staff and equipment and technical assistance to thoroughly review initial applications and membership renewals through budgeted funds and initial applications and membership renewal application fees. The corporation, however, shall have the right to, in difficult cases or situations where the work load cannot be adequately done without the help of the corporation, to assist in any assessment of any applicant; (8) Issue opinions prior to a final determination by the division of workers' compensation as to whether or not to approve any applicant for membership in the corporation, to the division concerning any applicant, which opinions shall be considered by the division; (9) Charge an applicant, in addition to the applicant's assessment, for initial or membership renewal in the corporation, a fee sufficient to cover the actual cost of examining the financial and safety conditions of the applicant. 7. To the extent necessary to secure funds for the payment of covered claims and also to pay the reasonable costs to administer them, the division, upon certification of the board of directors, shall levy assessments based on the annual modified standard premium, provided that no such assessments shall ever exceed, in the aggregate, from all members, an amount in excess of one million dollars at any given time, exclusive of all new members' assessments in the amounts collected for same, as is set forth in the plan of operation pursuant to the provisions of section 287.870. Such assessments shall be made at a maximum annual assessment of one-sixth of one percent of the annual modified standard premium. The initial assessment shall be for an amount equal to six hundred thousand dollars, the amount of such fee to be levied over a three-year period, one-third of the six hundred thousand dollars to be collected and received the first year, one-third to be collected and received in the second year, and one-third to be collected and received in the third year, the first year to commence as of the date of incorporation, assessments to be prorated on an annualized basis. The director of the division shall annually certify to the corporation the assessment percentage due from the members of the corporation. The director of the division and the board of the corporation shall within the procedures as specified in this section and as established for the premium tax billings, as provided in sections 287.690, 287.710, 287.715 and 287.730, notify, assess, and receive the assessments due from those members for the prior calendar year ending on the thirty-first day of December, with the exception that this annual assessment shall be payable in full, on or before the first day of March directly to the corporation. The department of insurance shall make available to the corporation or director of the division, data on the self-insured employer's workers' compensation administrative tax data for use in verification of the assessment as provided in this section. If assessments provided in this section are not paid, the corporation shall certify the fact to the division. Out of the first amounts assessed, there shall be set aside an amount equal to fifty thousand dollars, which shall be applied retroactively, before August 28, 1992, to be used and applied for the benefit of employees who have open, outstanding claims, in existence, which have not already been fully and completely settled or for which there has been an award of judgment rendered, and for which there are moneys due and owing. The amount of payment and allocation of funds shall be within the exclusive discretion of the director, such payments to be made on a reasonably timely basis, as the director received funds for such purpose. In addition, there shall be no reassessments against any member unless the director feels the current balance of the fund is insufficient or, after deducting the amount paid for or reserved for outstanding claims and for administrative and other costs in managing the corporation, the amount held shall be less than four hundred thousand dollars, at which point the director shall raise assessments sufficient to bring the minimum amount of the fund back up to six hundred thousand dollars or such other amount not to exceed, in any event, one million dollars based upon a maximum annual assessment of one-sixth of one percent of the annual modified standard premium as shall be necessary to effectuate the purposes of the corporation at that time. 8. Every assessment shall be made on a uniform percentage of the figure applicable, provided that the assessment levied against any self-insurer in any one year shall not exceed one-sixth of one percent of the annual modified standard premium during the calendar year preceding the date of the assessment. Assessments shall be remitted to and administered by the board of directors in the manner specified by the approved plan. Each employer so assessed shall have at least thirty days' written notice as to the date the assessment is due and payable. The corporation shall levy assessments against any newly admitted member of the corporation on the basis of contribution under the plan of operation as provided in section 287.870 and the applicable rules and regulations established pursuant thereto. 9. If, in any one year, funds available from such assessments, together with funds previously raised, are not sufficient to make all the payments or reimbursements then owing, the funds available shall be prorated, and the unpaid portion shall be paid as soon thereafter as sufficient additional funds become available. 10. No state funds of any kind shall be allocated or paid to the corporation or any of its accounts except those state funds accruing to the corporation by and through the assignment of rights of any insolvent employer. 11. All moneys, property and other assets received, owned or otherwise held by the corporation shall be held in such a way as to safeguard the corporation's ability to assure that the purpose and objectives of the corporation shall be advanced and that moneys needed to pay claims to employees of an individual insolvent self-insurer in the private sector shall be preserved. 12. Income derived from the corporation assets and investments shall vest in the corporation and shall not inure, under any circumstances, to the benefit of any member, the division of workers' compensation or any of its employees, or any other party other than an employee. The corporation may reinvest that income as otherwise provided for investing corporation assets. All such investments of corporation income shall be made in such a way as to ensure the welfare of the employees of the private sector individual self-insurers that are financially unable to meet their workers' compensation benefit obligations. In the event that the corporation shall be dissolved, any surplus income previously held by the insolvency fund shall be held in trust for the benefit of the employees of insolvent private sector individual self-insurers in the state of Missouri. 13. The corporation and the insolvency fund shall pay no dividends, rebates, interest, or otherwise distribute any corporation or fund income to any of its members. (L. 1992 H.B. 975, A.L. 1993 S.B. 251)
287.867. 1. Upon the adoption of a plan of operation, including, if applicable, the adoption of rules or regulations by the division of workers' compensation pursuant to section 287.870, there shall be created an "Insolvency Fund" to be managed by the corporation. 2. The insolvency fund is created for purposes of meeting the obligations of insolvent members incurred while members of the corporation and after the exhaustion of all assets including any bonds, escrow deposits, insurance or reinsurance, as required under this chapter. A method of operation of the insolvency fund shall be defined in the plan of operation as provided in section 287.870 or applicable rules and regulations pertaining to it. 3. The division shall have the authority to audit the financial soundness of the insolvency fund annually. 4. The division may recommend certain amendments to the plan of operation to the board of directors of the corporation for purposes of assuring the ongoing financial soundness of the insolvency fund and its ability to meet the obligations of sections 287.860 to 287.885. 5. An actuary on behalf of the division or other appropriate division personnel may make recommendations, from time to time, to improve the orderly payment of claims. (L. 1992 H.B. 975)
287.870. 1. By January 1, l993, or at such other date as is agreed upon between the board and the director, the board of directors shall submit to the division of workers' compensation a proposed plan of operation for the administration of the corporation and the insolvency fund. 2. The purpose of the plan of operation shall be to provide the corporation and the board of directors with the authority and responsibility to establish the necessary programs and to take the necessary actions to protect against the insolvency of a member of the corporation. In addition, the plan shall provide that the members of the corporation shall be responsible for maintaining an adequate insolvency fund to meet the obligations of insolvent members provided for in sections 287.860 to 287.885 and shall authorize the board of directors to contract and employ those persons with the necessary expertise to carry out this stated purpose. 3. The plan of operation, and any amendments thereto, shall take effect upon submission in writing to the director. If the board of directors fails to submit a plan by six months after August 28, 1992, or fails to make required amendments to the plan within thirty days, or such other date as the parties shall agree upon, thereafter, the division shall promulgate such rules as are necessary to effectuate the provisions of this section. Such rules shall continue in force until modified by the division or superseded by a plan submitted by the board of directors to the director. 4. All member employers shall comply with the plan of operation. 5. The plan of operation shall: (1) Establish the procedures whereby all the powers and duties of the corporation under section 287.865 will be performed; (2) Establish procedures for handling assets of the corporation; (3) Establish the amount and method of reimbursing members of the board of directors under section 287.862; (4) Establish procedures by which claims may be filed with the corporation and establish acceptable forms of proof of covered claims. Notice of claims to the receiver or liquidator of an insolvent employer shall be deemed notice to the corporation or its agent, and a list of such claims shall be submitted periodically to the corporation by the receiver or liquidator; (5) Establish regular places and times for meetings of the board of directors; (6) Establish procedures for records to be kept of all financial transactions of the corporation and its agents and the board of directors; (7) Provide that any member employer aggrieved by any final action or decision of the corporation may appeal to the division within thirty days after the action or decision; (8) Provide notice to any member employer aggrieved by any final action or decision of the division of workers' compensation of its rights to appeal such action or decision; (9) Establish the procedures whereby recommendations of candidates for the board of directors shall be submitted to the division; (10) Promulgate any additional provisions or any additional procedures or regulations necessary or proper for the execution of any of the powers and duties of the corporation or of the division of workers' compensation, without prior formal hearing or notices, by either the corporation on its own motion, or by the division of workers' compensation by regulations implementing sections 287.860 to 287.885; (11) Establish procedures to ensure the cooperation of the board with the director and any of the employees of the division of workers' compensation whenever possible. (L. 1992 H.B. 975)
287.872. 1. The division shall: (1) Notify the corporation of the existence of an insolvent employer within a reasonable period of time, but not later, in any event, than ten working days after it receives notice of the determination of insolvency; (2) Upon request of the board of directors, provide the corporation with a statement of the annual modified standard premiums of each member employer; (3) Set up procedures to ensure the cooperation of the director and employees of the division with the board and individual self-insurers acting under this section wherever possible. 2. The division may: (1) Require that the corporation notify the member employers and any other interested parties of the determination of insolvency and of their rights under sections 287.860 to 287.885. Such notification shall be by mail to the last known address thereof when available; but, if sufficient information for notification by mail is not available, notice by publication in a newspaper of general circulation in accordance with the applicable law pertaining to same shall be sufficient; (2) Suspend or revoke the authority of any member employer failing to pay an assessment when due or failing to comply with the plan of operation to self-insure in this state. As an alternative, the division may levy a penalty on any member employer failing to pay an assessment when due. Such penalty shall not exceed five percent of the unpaid assessment per month; (3) Revoke the designation of any servicing facility, including third-party administrators, if the division, in consultation and agreement with the corporation, finds that claims are being handled in an unsatisfactory manner. (L. 1992 H.B. 975)
287.875. 1. Any person who recovers from the corporation under sections 287.860 to 287.885 shall be deemed to have assigned her or his rights to the corporation to the extent of such recovery. Every claimant seeking the protection of sections 287.860 to 287.885 shall cooperate with the corporation to the same extent as such person would have been required to cooperate with the insolvent member employer. The corporation shall have no cause of action against the employee of the insolvent member employer for any sums the corporation has paid out, except such causes of action as the insolvent member employer would have had if such sums had been paid by the insolvent member employer. In the case of an insolvent member employer operating on a plan with assessment liability, payments of claims by the corporation shall not operate to reduce the liability of the insolvent member employer to the receiver, liquidator, or statutory successor for unpaid assessments. 2. The receiver, liquidator, or statutory successor of an insolvent member employer shall be bound by settlements of covered claims by the corporation. The court having jurisdiction shall grant such claims priority against the assets of the insolvent member employer equal to that to which the claimant would have been entitled in the absence of sections 287.860 to 287.885. The expense of the corporation or similar organization in handling claims shall be accorded the same priority as the expenses of the liquidator. 3. The corporation shall file periodically with the receiver or liquidator of the insolvent member employer statements of the covered claims paid by the corporation and estimates of anticipated claims on the corporation, which shall preserve the rights of the corporation against the assets of the insolvent member employer. (L. 1992 H.B. 975)
287.877. 1. Upon determination by majority vote that any member employer may be insolvent or in a financial condition hazardous to the employees thereof or to the public, it shall be the duty of the board of directors to notify the division of workers' compensation of any information indicating such condition.
2. The board of directors may, upon majority vote, request that the division determine the condition of any member employer which the board in good faith believes may no longer be qualified to be a member of the corporation. Within thirty days of the receipt of such request or, for good cause shown, within a reasonable time thereafter, the division shall make such determination and shall forthwith advise the board of its findings. Each request for a determination shall be kept on file by the division, but the request shall not be open to public inspection prior to the release of the determination to the public. 3. It shall also be the duty of the division to report to the board of directors when it has reasonable cause to believe that a member employer may be in such a financial condition as to be no longer qualified to be a member of the corporation. 4. The board of directors may, upon majority vote, make reports and recommendations to the division upon any matter which is germane to the solvency, liquidation, rehabilitation, or conservation of any member employer. Such reports and recommendations shall not be considered public documents. 5. The board of directors may, upon majority vote, make recommendations to the division for the detection and prevention of employer insolvencies. 6. The board of directors shall, at the conclusion of any member employer's insolvency in which the corporation was obligated to pay covered claims, prepare a report on the history and cause of such insolvency, based on the information available to the corporation, and shall submit such report to the division. 7. Both the board and the division shall, under the plan of operation, pursuant to section 287.870, and any applicable rules and regulations, establish further recommendations as the occasion suggests. (L. 1992 H.B. 975)
287.880. There shall be no liability on the part of, and no cause of action of any nature shall lie, whether at law or in equity, against, any member employer, the guaranty corporation or its agents or employees, the board of directors, or the division of workers' compensation, or any of its employees or representatives, on account of any action or inaction taken by any of them in the administration of this workers' compensation self-insurer's guaranty fund, or in the performance of their powers and duties under sections 287.860 to 287.885. (L. 1992 H.B. 975)
287.882. All proceedings in which an insolvent employer is a party, or is obligated to defend a party, in any court or before any quasi-judicial body or administrative board in this state shall be stayed for up to three months, or for such additional period from the date of an order of liquidation against the member employer with a finding of insolvency, entered by a court of competent jurisdiction or from the date the board of directors of the guaranty corporation determines that the member employer has fully expended all surety bonds, reinsurance, and all other available assets, and is not able to pay compensation benefits, as is deemed necessary by a court of competent jurisdiction to permit proper defense by the corporation of all pending causes of action as to any covered claims arising from a judgment under any decision, verdict, or finding based on the default of the insolvent member employer. The corporation, either on its own behalf or on behalf of the insolvent member employer, may apply to have such judgment, order, decision, verdict, or finding set aside by the same court or administrator that made such judgment, order, decision, verdict, or finding and shall be permitted to defend against such claim on the merits. If requested by the corporation, the stay of proceedings may be shortened or waived. (L. 1992 H.B. 975)
287.885. Notwithstanding any other provision of this chapter, if a covered claim, as defined herein, for which settlement is not effected and for which suit is not instituted against the insured or the corporation within the time period provided in sections 287.430 and 287.440, suit on such claim shall be barred. (L. 1992 H.B. 975)
287.886. If any provisions of sections 287.860 to 287.886 or the application thereof to any person or circumstances are* held invalid, such validity shall not affect other provisions or applications of this section which can be given effect without the invalid provisions or application, and to this end the provisions of this section are declared to be severable. (L. 1992 H.B. 975) *Word "are" does not appear in original rolls.
287.892. All workers' compensation insurers or their designated agents, self-insurers and state agencies responsible for the collection or maintenance of workers' compensation related data shall report claims information necessary to determine and analyze costs of the workers' compensation system to the director of the department of insurance or to such agents as the director may designate. The director may promulgate all reasonable rules and regulations necessary to implement this section. (L. 1993 S.B. 251 § 12)
287.894. 1. All commercial insurance carriers licensed to sell workers' compensation insurance in the state shall provide to the Missouri department of health and senior services at least every six months workers' compensation medical claims history data as required by the department. Such data shall be on electronic media and shall include the current procedural and medical terminology codes relating to the medical treatment, dates of treatment, demographic characteristics of the worker, type of health care provider rendering care, and charges for treatment. The department may require a statistically valid sample of claims. Companies failing to provide such information as required by the department are subject to section 287.740. The department may, for purposes of verification, collect data from health care providers relating to the treatment of workers' compensation injuries. 2. The Missouri consolidated health care plan as established in section 103.005, RSMo, shall, upon request of the department, provide data comparable to that provided by the insurance carriers as required in subsection 1 of this section. 3. The data required in subsections 1 and 2 of this section shall be used by the department to determine historical and statistical trends, variations and changes in health care costs associated with workers' compensation patients compared with nonworkers' compensation patients with similar injuries and conditions. Such data shall be readily available for review by users of the workers' compensation system, members of the general assembly, the Missouri division of workers' compensation and the department of insurance. Any data released by the department shall not identify a patient or health care provider. 4. Any additional personnel or equipment needed by the department to meet the requirements of this section shall be paid for by the workers' compensation fund. (L. 1993 S.B. 251 § 13)
287.896. 1. Within forty-five days of August 28, 1993, the director of the department of insurance shall approve a plan of operation for a new residual market that will guarantee insurance coverage and quality loss prevention and control services for employers seeking coverage through the plan. The new residual market shall begin operation January 1, 1994. 2. All insurers authorized to write workers' compensation and employers' liability insurance shall participate in such plan providing for the equitable apportionment among them of insurance which may be afforded applicants who are in good faith entitled to but who are unable to procure such insurance through ordinary methods, except that all employers that have expiring annual premiums greater than two hundred fifty thousand dollars must negotiate a retrospective rating plan with their insurer that is acceptable to the director of the department of insurance. The rates, supplementary rate information and policy forms to be used in such a plan and any future modification thereof must be submitted to the director for approval at least seventy-five days prior to their effective date. Such rates shall be set by the director after hearing so that the amount required in premiums, together with reasonable investment income earned on those premiums, is not excessive, inadequate or unfairly discriminatory and is actuarially sufficient to apply claims and losses and reasonable operating expenses of the insurers. Nothing contained herein shall prevent the director from including a merit rating plan for nonexperienced rated employers within the residual market plan. The director shall adopt within the plan a system to distribute any residual market deficit through an assessment on insurance carriers authorized to write workers' compensation insurance in proportion to the respective share of voluntary market premium written by such carrier. 3. The director shall disapprove any filing that does not meet the requirements of this section. A filing shall be deemed to meet such requirements unless approved, disapproved or modified by the director within seventy-five days after the filing is made. In disapproving a filing made pursuant to this section, the director shall have the same authority and follow the same procedures as in disapproving a rate filing pursuant to the requirements for filings in the voluntary market. The designated advisory organization may make and file the plan of operation, rates, rating plans, rules and policy forms under this section. 4. The director shall establish by rule standards to assure that any employer insured through the plan shall receive the same quality of service in the areas of employee classification, safety engineering, loss control, claims handling and claim reserving practices as do employers which are voluntarily insured as provided in section 287.123. The standards established by the director pursuant to this subsection shall also specify the procedures and grounds under which an employer insured through the plan shall be assigned an insurer, and the method by which such employers shall be informed of such procedures and grounds. All insurers of the residual market shall process applications, conduct safety engineering or other loss control services and provide claims handling within the state of Missouri or adjoining states. (L. 1993 S.B. 251 § 14)
287.900. 1. Sections 287.900 to 287.920 shall be known as the "Missouri Employers Mutual Insurance Company Act". 2. As used in sections 287.900 to 287.920, the following words mean: (1) "Administrator", the chief executive officer of the Missouri employers mutual insurance company; (2) "Board", the board of directors of the Missouri employers mutual insurance company; (3) "Company", the Missouri employers mutual insurance company created in section 287.902. (L. 1993 S.B. 251 § 1)
287.902. The "Missouri Employers Mutual Insurance Company" is created as an independent public corporation for the purpose of insuring Missouri employers against liability for workers' compensation, occupational disease and employers' liability coverage. The company shall be organized and operated as a domestic mutual insurance company and it shall not be a state agency. The company shall have the powers granted a general not-for-profit corporation pursuant to section 355.090, RSMo, to the extent the provisions of such section do not conflict with the provisions of sections 287.900 to 287.920. The company shall be a member of the Missouri property and casualty guaranty association, sections 375.771 to 375.779, RSMo, and as such will be subject to assessments therefrom, and the members of such association shall bear responsibility in the event of the insolvency of the company. The company shall be established pursuant to the provisions of sections 287.900 to 287.920. Preference shall be given to Missouri employers that develop an annual premium of not greater than ten thousand dollars. The company shall use flexibility and experimentation in the development of types of policies and coverages offered to employers, subject to the approval of the director of the department of insurance. (L. 1993 S.B. 251 § 2)
287.905. 1. There is created a board of directors for the company. The board shall be appointed by January 1, 1994, and shall consist of five members appointed or selected as provided in this section. The governor shall appoint the initial five members of the board with the advice and consent of the senate. Each director shall serve a five-year term. Terms shall be staggered so that no more than one director's term expires each year on the first day of July. The five directors initially appointed by the governor shall determine their initial terms by lot. At the expiration of the term of any member of the board, the company's policyholders shall elect a new director in accordance with provisions determined by the board. 2. Any person may be a director who: (1) Does not have any interest as a stockholder, employee, attorney, agent, broker or contractor of an insurance entity who writes workers' compensation insurance or whose affiliates write workers' compensation insurance; and (2) Is of good moral character and who has never pleaded guilty to, or been found guilty of, a felony. 3. The board shall annually elect a chairman and any other officers it deems necessary for the performance of its duties. Board committees and subcommittees may also be formed. (L. 1993 S.B. 251 § 3)
287.907. 1. By March 1, 1994, the board shall hire an administrator who shall serve at the pleasure of the board and the company shall be fully prepared to be operational by March 1, 1995, and assume its responsibilities pursuant to sections 287.900 to 287.920. The administrator shall receive compensation as established by the board and must have proven successful experience as an executive at the general management level in the insurance business. 2. The board is vested with full power, authority and jurisdiction over the company. The board may perform all acts necessary or convenient in the administration of the company or in connection with the insurance business to be carried on by the company. In this regard, the board is empowered to function in all aspects as a governing body of a private insurance carrier. (L. 1993 S.B. 251 § 4)
287.909. 1. The administrator of the company shall act as the company's chief executive officer. The administrator shall be in charge of the day-to-day operations and management of the company. 2. Before entering the duties of office, the administrator shall give an official bond in an amount and with sureties approved by the board. The premium for the bond shall be paid by the company. 3. The administrator or his designee shall be the custodian of the moneys of the company and all premiums, deposits or other moneys paid thereto shall be deposited with a financial institution as designated by the administrator. 4. No board member, officer or employee of the company is liable in a private capacity for any act performed or obligation entered into when done in good faith, without intent to defraud, and in an official capacity in connection with the administration, management or conduct of the company or affairs relating to it. (L. 1993 S.B. 251 § 5)
287.910. The board shall have full power and authority to establish rates to be charged by the company for insurance. The board shall contract for the services of or hire an independent actuary, a member in good standing with the American Academy of Actuaries, to develop and recommend actuarially sound rates. Rates shall be set at amounts sufficient, when invested, to carry all claims to maturity, meet the reasonable expenses of conducting the business of the company and maintain a reasonable surplus. The company shall conduct a workers' compensation program that shall be neither more nor less than self-supporting. (L. 1993 S.B. 251 § 6)
287.912. The board shall formulate and adopt an investment policy and supervise the investment activities of the company. The administrator may invest and reinvest the surplus or reserves of the company subject to the limitations imposed on domestic insurance companies by state law. The company may retain an independent investment counsel. The board shall periodically review and appraise the investment strategy being followed and the effectiveness of such services. Any investment counsel retained or hired shall periodically report to the board on investment results and related matters. (L. 1993 S.B. 251 § 7)
287.915. Any insurance agent or broker licensed to sell workers' compensation insurance in this state shall be authorized to sell insurance policies for the company in compliance with the bylaws adopted by the company. The board shall establish a schedule of commissions to pay for the services of the agent. (L. 1993 S.B. 251 § 8)
287.917. 1. The administrator shall formulate, implement and monitor a workplace safety program for all policyholders. 2. The company shall have representatives whose sole purpose is to develop, with policyholders, a written workplace accident and injury reduction plan that promotes safe working conditions and which is based upon clearly stated goals and objectives. Company representatives shall have reasonable access to the premises of any policyholder or applicant during regular working hours. The company shall communicate the importance of a well-defined safety plan and assist in any way to obtain this objective.
3. The administrator or board may refuse to insure, or may terminate the insurance of any subscriber who refuses to permit on-site examinations or disregards the workplace accident and injury reduction plan. 4. Upon the completion of a detailed inspection and recognition of a high regard for employee work safety, a deviation may be applied to the rate structure of that insured noting special recognition of those efforts. (L. 1993 S.B. 251 § 9)
287.919. 1. The Missouri employers mutual insurance company shall not receive any state appropriation, directly or indirectly, except as provided in section 287.690. 2. In order to provide funds for the creation, continued development and operation of the company, the board is authorized to issue revenue bonds from time to time, in a principal amount outstanding not to exceed forty million dollars at any given time, payable solely from premiums received from insurance policies and other revenues generated by the company. 3. The board may issue bonds to refund other bonds issued pursuant to this section. 4. The bonds shall have a maturity of no more than ten years from the date of issuance. The board shall determine all other terms, covenants and conditions of the bonds, except that no bonds may be redeemed prior to maturity unless the company has established adequate reserves for the risks it has insured. 5. The bonds shall be executed with the manual or facsimile signature of the administrator or the chairman of the board and attested by another member of the board. The bonds may bear the seal, if any, of the company. 6. The proceeds of the bonds and the earnings on those proceeds shall be used by the board for the development and operation of the Missouri employers mutual insurance company, to pay expenses incurred in the preparation, issuance and sale of the bonds and to pay any obligations relating to the bonds and the proceeds of the bonds under the United States Internal Revenue Code of 1986, as amended. 7. The bonds may be sold at a public sale or a private sale. If the bonds are sold at a public sale, the notice of sale and other procedures for the sale shall be determined by the administrator or the company. 8. This section is full authority for the issuance and sale of the bonds and the bonds shall not be invalid for any irregularity or defect in the proceedings for their issuance and sale and shall be incontestable in the hands of bona fide purchasers or holders of the bonds for value. 9. An amount of money from the sources specified in subsection 2 of this section sufficient to pay the principal of and any interest on the bonds as they become due each year shall be set aside and is hereby pledged for the payment of the principal and interest on the bonds. 10. The bonds shall be legal investments for any person or board charged with the investment of public funds and may be accepted as security for any deposit of public money, and the bonds and interest thereon are exempt from taxation by the state and any political subdivision or agency of the state. 11. The bonds shall be payable by the company, which shall keep a complete record relating to the payment of the bonds. 12. Not more than fifty percent of the bonds sold shall be sold to public entities. (L. 1993 S.B. 251 § 10)
287.920. 1. The board shall cause an annual audit of the books of accounts, funds and securities of the company to be made by a competent and independent firm of certified public accountants, the cost of the audit to be charged against the company. A copy of the audit report shall be filed with the director of the department of insurance and the administrator. The audit shall be open to the public for inspection. 2. The board shall submit an annual independently audited report in accordance with procedures governing annual reports adopted by the National Association of Insurance Commissioners by March first of each year and the report shall be delivered to the governor and the general assembly and shall indicate the business done by the company during the previous year and contain a statement of the resources and liabilities of the company. 3. The administrator shall annually submit to the board for its approval an estimated budget of the entire expense of administering the company for the succeeding calendar year having due regard to the business interests and contract obligations of the company. 4. The incurred loss experience and expense of the company shall be ascertained each year to include but not be limited to estimates of outstanding liabilities for claims reported to the company but not yet paid and liabilities for claims arising from injuries which have occurred but have not yet been reported to the company. If there is an excess of assets over liabilities, necessary reserves and a reasonable surplus for the catastrophe hazard, then a cash dividend may be declared or a credit allowed to an employer who has been insured with the company in accordance with criteria approved by the board, which may account for the employer's safety record and performance. 5. The department of insurance shall conduct an examination of the company in the manner and under the conditions provided by the statutes of the insurance code for the examination of insurance carriers. The board shall pay the cost of the examination as an expense of the company. The company is subject to all provisions of the statutes which relate to private insurance carriers and to the jurisdiction of the department of insurance in the same manner as private insurance carriers, except as provided by the director. 6. For the purpose of ascertaining the correctness of the amount of payroll reported, the number of employees on the employer's payroll and for such other information as the administrator may require in the proper administration of the company, the records and payrolls of each employer insured by the company shall always be open to inspection by the administrator or his duly authorized agent or representative. 7. Every employer provided insurance coverage by the company, upon complying with the underwriting standards adopted by the company, and upon completing the application form prescribed by the company, shall be furnished with a policy showing the date on which the insurance becomes effective. (L. 1993 S.B. 251 § 11)
287.930. As used in sections 287.930 to 287.975, the following terms mean: (1) "Accepted actuarial standards", the standards adopted by the Casualty Actuarial Society in its Statement of Principles Regarding Property and Casualty Insurance Ratemaking, and the Standards of Practice adopted by the Actuarial Standards Board; (2) "Advisory organization", any entity which either has two or more member insurers or is controlled either directly or indirectly by two or more insurers and which assists insurers in ratemaking related activities. Two or more insurers which have a common ownership or operate in this state under common management or control constitute a single insurer for the purpose of this definition. "Advisory organization" does not include a joint underwriting association, any actuarial or legal consultant, any employee of an insurer or insurers under common control or management or their employees or manager; (3) "Classification system" or "classification", the plan, system or arrangement for recognizing differences in exposure to hazards among industries, occupations or operations of insurance policyholders; (4) "Competitive market", a market which has not been found to be noncompetitive pursuant to section 287.942; (5) "Director", the director of the department of insurance; (6) "Expenses", that portion of any rate attributable to acquisition and field supervision; collection expenses and general expenses; and taxes, licenses and fees; (7) "Experience rating", a rating procedure using past insurance experience of the individual policyholder to forecast future losses by measuring the policyholder's loss experience against the loss experience of policyholders in the same classification to produce a prospective premium credit, debit or unity modification; (8) "Loss trending", any procedure for projecting developed losses to the average date of loss for the period during which the policies are to be effective; (9) "Market", the interaction between buyers and sellers of workers' compensation insurance within this state pursuant to the provisions of sections 287.930 to 287.975; (10) "Noncompetitive market", a market for which there is a ruling in effect pursuant to section 287.942 that a reasonable degree of competition does not exist; (11) "Prospective loss costs", that portion of a rate that does not include provisions for expenses, other than loss adjustment expenses, or profit. "Prospective loss costs" are developed losses projected through loss trending to a future point in time, including any assessments that are loss-based, and ascertained by accepted actuarial standards; (12) "Pure premium rate", that portion of the rate which represents the loss cost per unit of exposure including loss adjustments expense; (13) "Rate", the cost of insurance per exposure base unit, prior to any application of individual risk variations based on loss or expense considerations, and does not include minimum premiums; (14) "Residual market", the plan, either voluntary or mandated by law, involving participation by insurers in the equitable apportionment among them of insurance which may be afforded applicants who are unable to obtain insurance through ordinary methods; (15) "Statistical plan", the plan, system or arrangement used in collecting data; (16) "Supplementary rate information", any manual or plan of rates, classifications system, rating schedule, minimum premium, policy fee, rating rule, rating plan, and any other similar information needed to determine the applicable premium for an insured; (17) "Supporting information", the experience and judgment of the filer and the experience or data of other insurers or organizations relied on by the filer, the interpretation of any statistical data relied on by the filer, descriptions of methods used in making the rates and any other similar information required to be filed by the director. (L. 1993 S.B. 251 § 17) Effective 1-1-94
287.932. 1. Nothing in sections 287.930 to 287.975 prohibits or regulates the payment of dividends, savings or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members or subscribers, but in the payment of such dividends there shall be no unfair discrimination between policyholders. 2. A plan for the payment of dividends, savings or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members or subscribers shall not be considered a rating plan or system. 3. It shall be an unfair trade practice pursuant to sections 375.934 and 375.936, RSMo, to make the payment of a dividend or any portion thereof conditioned upon renewal of the policy or contract. (L. 1993 S.B. 251 § 18) Effective 1-1-94
287.935. 1. No insurer or advisory organization shall make any arrangement with any other insurer, advisory organization or other person which has the purpose or effect or restraining trade unreasonably or of substantially lessening competition in the business of insurance. 2. No insurer shall agree with any other insurer or with the advisory organization to adhere to or use any rate, rating plan, other than the uniform experience rating plan, or rating rule except as needed to comply with the requirements of section 287.955. 3. The fact that two or more insurers, whether or not members or subscribers of the advisory organization, use consistently or intermittently, the same rates, rating plans, rating schedules, rating rules, policy forms, rate classifications, underwriting rules, surveys or inspections or similar materials is not sufficient in itself to support a finding that an agreement exists. 4. Two or more insurers which have a common ownership or operate in this state under common management or control may act in concert between or among themselves with respect to any matters pertaining to those activities authorized in sections 287.930 to 287.975 as if they constituted a single insurer. (L. 1993 S.B. 251 § 19) Effective 1-1-94
287.937. 1. The director may examine any insurer and the advisory organization as deemed necessary to ascertain compliance with sections 287.930 to 287.975. 2. Every insurer and the advisory organization shall maintain reasonable records of the type and kind reasonably adapted to its method of operation containing its experiences or the experience of its members including the data, statistics or information collected or used by it in its activities. These records shall be available at all reasonable times to enable the director to determine whether the activities of the advisory organization, insurer or association comply with the provisions of sections 287.930 to 287.975. Such records shall be maintained in an office within this state or shall be made available to the director for examination or inspection at any time upon reasonable notice. 3. The reasonable cost of an examination made pursuant to this section shall be paid by the examined party upon presentation of a detailed account of such costs. 4. In lieu of any such examination the director may accept the report of an examination by the insurance supervisory official of another state, made pursuant to the laws of such state. (L. 1993 S.B. 251 § 20) Effective 1-1-94
287.940. 1. The director may, upon a finding that any person or organization has violated any provision of sections 287.930 to 287.975, impose a penalty of not more than one thousand dollars for each such violation, but if the director finds such violation to be willful, a penalty of not more than ten thousand dollars for each such violation may be imposed. Such penalties may be in addition to any other penalty provided by law. 2. For purposes of this section, any insurer using a rate for which the insurer has failed to file the rate, supplementary rate information or supporting information, as required by sections 287.930 to 287.975, shall have committed a separate violation for each day such failure continues. 3. The director may suspend or revoke the license of any advisory organization or insurer which fails to comply with an order of the director within the time limit specified by such order, or any extension thereof which the director may grant. 4. The director may determine when a suspension of license shall become effective and it shall remain in effect for the period fixed by the director, unless the director modifies or rescinds such suspension, or until the order upon which such suspension is based is modified, rescinded or reversed. 5. No penalty shall be imposed and no license shall be suspended or revoked except on a written order of the director, stating the findings made after hearing. (L. 1993 S.B. 251 § 21) Effective 1-1-94
287.942. 1. A competitive market is presumed to exist unless the director, after hearing, determines that a reasonable degree of competition does not exist in the market and the director issues an order to that effect. Such an order shall expire no later than one year after issue. In determining whether a reasonable degree of competition exists, the director may consider relevant tests of workable competition pertaining to market structure, market performance and market conduct. For the purposes of this section, "market" shall mean the statewide workers' compensation and employers' liability lines of business. 2. In determining whether a reasonable degree of competition exists, the following factors shall be considered: (1) Generally accepted and relevant tests of competition pertaining to market structure, market performance and market conduct; (2) Market concentration as measured by the Herfindahl-Herschman Index; (3) The number of insurers transacting workers' compensation insurance in the market; (4) Insurer market shares and changes in market shares; (5) Ease of entry into the market; (6) Whether long-term profitability for insurers in the market is unreasonably high in relation to the risks being insured; and (7) Whether long-term profitability for insurers in the market is reasonable in relation to industries of comparable business risk. (L. 1993 S.B. 251 § 22) Effective 1-1-94
287.945. In determining whether or not a competitive market exists pursuant to section 287.942, the director shall monitor the degree of competition in this state. In doing so, the director shall use existing relevant information, analytical systems and other sources; cause or participate in the development of new relevant information, analytical systems and other sources; or rely on some combination thereof. Such activities may be conducted internally within the department of insurance, in cooperation with other state insurance departments, through outside contractors or in any other appropriate manner. (L. 1993 S.B. 251 § 23) Effective 1-1-94
287.947. 1. In a competitive market, every insurer shall file with the director all rates and supplementary rate information which is to be used in this state, except as provided in section 287.955. Such rates and supplementary rate information shall be filed not later than thirty days after the effective date. If the director finds, after a hearing, that an insurer's rates require closer supervision because of the insurer's financial condition or unfairly discriminatory rating practices, the insurer shall file with the director at least thirty days before the effective date, all such rates and such supplementary rate information and supporting information as prescribed by the director. Upon application by the filer, the director may authorize an earlier effective date. 2. In a noncompetitive market every insurer shall file with the director all rates and supplementary rate information which is to be used in this state, except as provided in section 287.942. Such rates and supplementary rate information and supporting information required by the director shall be filed at least thirty days before the effective date. Upon application by the filer, the director may authorize an earlier effective date. 3. Rates filed pursuant to this section shall be filed in such form and manner as prescribed by the director. In a noncompetitive market, whenever a filing is not accompanied by such information as the director has required under this section, the director shall so inform the insurer within fifteen days and the filing shall not be deemed to be made until the information is furnished or the insurer certifies that the additional information is not maintained or cannot be provided. 4. All rates, supplementary rate information and any supporting information for risks filed under sections 287.930 to 287.975 shall, as soon as filed, be open to public inspection at any reasonable time. Copies may be obtained by any person on request and upon payment of a reasonable charge. (L. 1993 S.B. 251 § 24) Effective 1-1-94
287.950. 1. Rates in a competitive market shall not be excessive, inadequate or unfairly discriminatory. Rates are excessive if it is likely to produce a long-run profit that is unreasonably high for the insurance provided or if expenses are unreasonably high in relation to services rendered. Rates are not inadequate unless clearly insufficient to sustain projected losses and expenses and the use of such rates, if continued, will tend to create a monopoly in the market. A rate is inadequate if funds equal to the full ultimate cost of anticipated losses and loss adjustment expenses are not produced when the prospective loss costs are applied to anticipated payrolls. 2. Unfair discrimination exists if, after allowing for practical limitations, price differentials fail to reflect equitably the differences in expected losses and expenses. A rate is not unfairly discriminatory because different premiums result for policyholders with like loss exposures but different expenses, or like expenses but different loss exposures, so long as the rate reflects the differences with reasonable accuracy. (L. 1993 S.B. 251 § 25) Effective 1-1-94
287.952. In determining whether rates comply with the excessiveness standard in a noncompetitive market, the inadequacy standard and the unfair discrimination standard, the following criteria shall apply: (1) Due consideration may be given to past and prospective loss and expense experience within and outside of this state, to catastrophe hazards and contingencies, to events or trends within and outside of this state, to loadings for leveling premium rates over time, for dividends or savings to be allowed or returned by insurers to their policyholders, members or subscribers, and to all other relevant factors, including judgment; (2) The expense provisions included in the rates to be used by an insurer shall reflect the operating methods of the insurer and, so far as it is credible, its own actual and anticipated expense experience; (3) The rates may contain provisions for contingencies and an allowance permitting a reasonable profit. In determining the reasonableness of profit, consideration should be given to all investment income attributable to premiums and the reserves associated with those premiums. (L. 1993 S.B. 251 § 26) Effective 1-1-94
287.955. 1. Every workers' compensation insurer shall adhere to a uniform classification system and uniform experience rating plan filed with the director by the advisory organization designated by the director and subject to his disapproval. An insurer may develop subclassifications of the uniform classification system upon which a rate may be made, except that such subclassifications shall be filed with the director thirty days prior to their use. The director shall disapprove subclassifications if the insurer fails to demonstrate that the data thereby produced can be reported consistent with the uniform statistical plan and classification system. 2. The director shall designate an advisory organization to assist him in gathering, compiling and reporting relevant statistical information. Every workers' compensation insurer shall record and report its workers' compensation experience to the designated advisory organization as set forth in the uniform statistical plan approved by the director. 3. The designated advisory organization shall develop and file manual rules, subject to the approval of the director, reasonably related to the recording and reporting of data pursuant to the uniform statistical plan, uniform experience rating plan, and the uniform classification system. Every workers' compensation insurer shall adhere to the approved manual rules and experience rating plan in writing and reporting its business. No insurer shall agree with any other insurer or with the advisory organization to adhere to manual rules which are not reasonably related to the recording and reporting of data pursuant to the uniform classification system of the uniform statistical plan. (L. 1993 S.B. 251 § 27) Effective 1-1-94
287.957. The experience rating plan shall contain reasonable eligibility standards, provide adequate incentives for loss prevention, and shall provide for sufficient premium differentials so as to encourage safety. The uniform experience rating plan shall be the exclusive means of providing prospective premium adjustment based upon measurement of the loss-producing characteristics of an individual insured. An insurer may submit a rating plan or plans providing for retrospective premium adjustments based upon an insured's past experience. Such system shall provide for retrospective adjustment of an experience modification and premiums paid pursuant to such experience modification where a prior reserved claim produced an experience modification that varied by greater than fifty percent from the experience modification that would have been established based on the settlement amount of that claim. The rating plan shall prohibit an adjustment to the experience modification of an employer if the total medical cost does not exceed five hundred dollars and the employer pays all of the total medical costs and there is no lost time from the employment and no claim is filed. (L. 1993 S.B. 251 § 28) Effective 1-1-94
287.960. 1. A rate may be disapproved at any time subsequent to the effective date. A rate subject to prefiling under section 287.947 may also be disapproved before the effective date. A rate for a residual market in which insurers are mandated by law to participate shall not become effective until approved by the director, as provided in section 287.896. 2. The director may disapprove a rate for use in a competitive market if the director finds that the rate is inadequate or unfairly discriminatory under section 287.950. The director shall disapprove a rate for use in a noncompetitive market if he finds that the rate is excessive, inadequate or unfairly discriminatory under section 287.950. 3. If the director finds that a reasonable degree of competition does not exist in a market in accordance with section 287.942, the director may require that the insurers in that market file supporting information in support of existing rates. If the director believes that such rates may violate any of the requirements of sections 287.930 to 287.975, a hearing shall be called prior to any disapproval. 4. If the director believes that rates in a competitive market violate the inadequacy or unfair discrimination standard in section 287.950 or any other applicable requirement of this act*, the director may require that the insurers in that market file supporting information in support of existing rates. If after reviewing the supporting rate information, the director continues to believe that the rates may violate these requirements, a hearing shall be called prior to any disapproval. 5. The director may disapprove, without hearing, rates prefiled pursuant to section 287.947 that have not become effective; however, the insurer whose rates have been disapproved shall be given a hearing upon a written request made within thirty days after the disapproval order. 6. If the director disapproves a rate, the director shall issue an order specifying in what respects it fails to meet the requirements of sections 287.930 to 287.975 and stating when, within a reasonable period thereafter, such rate shall be discontinued for any policy issued or renewed after a date specified in the order. The order shall be issued subject to the requirements of section 287.962. Such order may include a provision for premium adjustment for the period after the effective date of the order for policies in effect on such date. 7. Whenever an insurer has no legally effective rates as a result of the director's disapproval of rates or other act, the director shall on request of the insurer specify interim rates for the insurer that are high enough to protect the interests of all parties and may order that a specified portion of the premiums be placed in an escrow account approved by him. When new rates become legally effective, the director shall order the escrowed funds or any overcharge in the interim rates to be distributed appropriately, except that refunds of less than ten dollars per policyholder shall not be required. (L. 1993 S.B. 251 § 29) Effective 1-1-94 *"This act" (S.B. 251, 1993) contains numerous sections. Consult Disposition of Sections table for definitive listing.
287.962. 1. Any hearing under this section shall be held at a place designated by the director and upon not less than thirty days' written notice to the insurer or the advisory organization. A full stenographic record shall be prepared for any hearing held pursuant to this section. The hearing may be conducted by a hearing officer designated by the director. All orders and determinations shall be based on findings of fact and conclusions of law. 2. The director shall make written findings and conclusions and shall set them forth in an order issued within twenty days of the close of the record. A hearing under this section shall not be adjourned or recessed except upon application of an insurer or the advisory organization. An application to adjourn or recess shall be for extraordinary circumstances and not for the purpose of delay. The grounds for any adjournment or recess of a hearing conducted pursuant to this section shall be specifically stated in the record. 3. Any insurer or the advisory organization may obtain a judicial declaration as to the validity of any order by bringing an action for declaratory relief. The right to judicial determination shall not be affected by the failure to seek reconsideration of the order. The order may be declared invalid for failure to comply with the provisions of sections 287.930 to 287.975. The review of any such order shall be on the basis of the record of the proceedings before the director and shall be affirmed if supported by competent and substantial evidence upon the whole record. (L. 1993 S.B. 251 § 30) Effective 1-1-94
287.965. 1. Any person or organization aggrieved with respect to any filing which is in effect may make written application to the director for a hearing thereon, except that the insurer or rating organization that made the filing shall not be authorized to proceed under this subsection. Such application shall specify the grounds to be relied upon by the applicant. If the director finds that the application is made in good faith, that the applicant would be so aggrieved if his grounds are established, and that such grounds otherwise justify holding such a hearing, he shall, within thirty days after receipt of such application, hold a hearing upon not less than ten days' written notice to the applicant and to every insurer which made such filing. 2. If, after such hearing, the director finds that the filing does not meet the requirements of sections 287.930 to 287.975, he shall issue an order specifying in what respects he finds that such filing fails to meet the requirements of sections 287.930 to 287.975, and stating when, within a reasonable period thereafter, such filing shall be deemed no longer effective. Copies of such order shall be sent to the applicant and to every such insurer. The order shall not affect any contract or policy made or issued prior to the expiration of the period set forth in such order. (L. 1993 S.B. 251 § 31) Effective 1-1-94
287.967. 1. The advisory organization shall not provide any service relating to the rates of any insurance subject to sections 287.930 to 287.975, and no insurer shall use the services of such organization for such purposes unless the organization has obtained a license under subsection 3 of this section. 2. The advisory organization shall not refuse to supply any services for which it is licensed in this state to any insurer authorized to do business in this state and offering to pay the fair and usual compensation for the services. 3. An organization applying for the license for designation as the advisory organization shall include with its application: (1) A copy of its constitution; charter; articles of organization, agreement, association or incorporation; and a copy of its bylaws, plan of operation, and any other rules or regulations governing the conduct of its business; (2) A list of its members and subscribers; (3) The name and address of one or more residents of this state upon whom notices, process affecting it, or orders of the director may be served; (4) A statement showing its technical qualifications for acting in the capacity for which it seeks a license; and (5) Any other relevant information and documents that the director may require. 4. Every organization which has applied for the license shall notify the director of every material change in the facts or in the documents on which its application was based. Any amendment to a document filed under this section shall be filed at least thirty days before it becomes effective. 5. The director, upon a finding that an applicant and the individuals through whom it acts are competent, trustworthy and technically qualified to provide the services proposed, and that all requirements of law are met, shall issue one license to designate the advisory organization which specifies the authorized activity of the applicant. The director shall not issue the license if the proposed activity would tend to create a monopoly or to substantially lessen competition in the market. 6. The license issued pursuant to this section shall remain in effect until the licensee withdraws from the state or until the license is suspended or revoked. The director may at any time, after hearing, revoke or suspend the license of the advisory organization if it does not comply with the requirements and standards of sections 287.930 to 287.975. (L. 1993 S.B. 251 § 32) Effective 1-1-94
287.970. In addition to other prohibitions contained in sections 287.930 to 287.975, except as specifically permitted under section 287.972, the advisory organization shall not: (1) Compile or distribute recommendations relating to rates that include expenses, other than loss adjustment expenses, or profit; or (2) File rates, supplementary rate information or supporting information on behalf of an insurer. (L. 1993 S.B. 251 § 33) Effective 1-1-94
287.972. 1. The advisory organization, in addition to other activities not prohibited, may: (1) Develop statistical plans, including class definitions; (2) Collect statistical data from members, subscribers or any other source; (3) Prepare and distribute pure premium rate data, adjusted for loss development and loss trending, in accordance with its statistical plans as specified in subsection 2 of this section. Such data and adjustments should be in sufficient detail so as to permit insurers to modify such pure premiums based on their own rating methods or interpretations of underlying data; (4) Prepare and distribute manuals of rating rules and rating schedules that do not contain any rules or schedules including final rates of permitting calculation of final rates without information outside the manuals; (5) Distribute information that is filed with the director and open to public inspection; (6) Conduct research and collect statistics in order to discover, identify and classify information relating to causes or prevention of losses; (7) Prepare and file policy forms and endorsements and consult with members, subscribers and others relative to their use and application; (8) Collect, compile and distribute past and current prices of individual insurers if such information is made available to the general public; (9) Conduct research and collect information to determine the impact of benefit level changes on pure premium rates; (10) Prepare and distribute rules and rating values for the uniform experience rating plan. Calculate and disseminate individual risk premium modifications; (11) Assist an individual insurer to develop rates, supplementary rate information or supporting information when so authorized by the individual insurer. 2. The director of insurance may require that no pure premium rate data, adjusted for loss development and loss trending, be distributed, except in a format which allows a comparison of such data, adjusted for loss development without any trend factor, with a trend factor developed by the advisory organization, and with a trend factor developed by the director, for each of the various job classifications. Such data may be used, at their option, by workers' compensation insurers, self-funded employers, or self-insured groups of employers, to determine their own final rates or charges for workers' compensation insurance coverage. The authority to establish such a reporting format shall not be interpreted as allowing the director of insurance to set final rates where a competitive market exists under the provisions of sections 287.930 to 287.975. (L. 1993 S.B. 251 § 34) Effective 1-1-94
287.975. 1. The advisory organization shall file with the director every pure premium rate, every manual of rating rules, every rating schedule and every change or amendment, or modification of any of the foregoing, proposed for use in this state no more than thirty days after it is distributed to members, subscribers or others. 2. The advisory organization which makes a uniform classification system for use in setting rates in this state shall collect data for two years after January 1, 1994, on the payroll differential between employers within the construction group of code classifications, including, but not limited to, payroll costs of the employer and number of hours worked by all employees of the employer engaged in construction work. Such data shall be transferred to the department of insurance in a form prescribed by the director of the department of insurance, and the department shall compile the data and develop a formula to equalize premium rates for employers within the construction group of code classifications based on such payroll differential within three years after the data is submitted by the advisory organization. (L. 1993 S.B. 251 § 35) Effective 1-1-94
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