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Senate Engrossed |
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State of Arizona Senate Fifty-third Legislature First Regular Session 2017
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SENATE BILL 1331 |
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AN ACT
Amending section 20‑359, Arizona Revised Statutes; amending Title 20, chapter 2, article 4, Arizona Revised Statutes, by adding section 20‑359.01; relating to workers' compensation rate filings.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 20-359, Arizona Revised Statutes, is amended to read:
20-359. Deviations from filed workers' compensation rates
A. Every insurer shall adhere to the filings made by the rating organization of which it is a member, except that any member insurer may file with the director:
1. A uniform percentage decrease or increase in any rate filing to be applied to the statewide rate portion of the rating organization's that rate filing.
2. A subclassification rate related rule that deviates from the rules or any schedule rating plan filed by the insurer's rating organization. An insurer shall not apply a deviation and a schedule rating plan within the same insurance company rate filing.
B. Each deviation filed shall be on file with the director for a waiting period of at least thirty days before it becomes effective. On written application by the insurer making the filing, the director may authorize a filing to become effective before the waiting period expires. A deviation that is filed pursuant to subsection A, paragraph 1 of this section and that is not disapproved by the director expires the following December 31 at midnight in this state unless the director terminates the deviation sooner. A deviation that is filed pursuant to subsection A, paragraph 2 of this section continues until the insurer withdraws the deviation or the director determines that the deviation no longer meets the standards prescribed in section 20‑356, paragraph 1. At any time the director may require an insurer to actuarially support a deviation. The insurer that files the deviation shall simultaneously send a copy of the filing to the rating organization of which it is a member and to any designated rating organization.
C. A rating organization shall notify the director if the organization disapproves any deviation relating to workers' compensation insurance. The director shall notify the industrial commission of the disapproval within ten days of receipt of the disapproval from the rating organization.
Sec. 2. Title 20, chapter 2, article 4, Arizona Revised Statutes, is amended by adding section 20-359.01, to read:
20-359.01. Requirements for workers' compensation tiered rate filings
A. Subject to the other provisions of this article, an insurer transacting workers' compensation insurance may file with the director a rate filing for workers' compensation insurance that provides for a plan with more than one rate tier for that insurer or a group of insurers under common management if the filing complies with the following requirements:
1. Each tier is established consistent with underwriting rules that are based on criteria that would lead to a logical distinguishing of potential risk.
2. Supporting actuarial analysis or other information is provided that shows a clear distinction between the following for each tier:
(a) Expected losses and expenses.
(b) Actual losses and expenses.
B. An insurer filing tiered ratings pursuant to this section shall file with the director an update of the actuarial analysis or other information required under subsection A, paragraph 2 of this section at least every three years.
C. An insurer using tiered ratings may apply underwriting expertise and judgment in the tier placement process if the underwriting expertise and judgment:
1. Is applied in a consistent manner.