H. B. 4390
(By Delegates Webster, Miley, DeLong, Burdiss, Brown, Caputo,
Longstreth, Fleischauer, Kessler, Moore and Guthrie)
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[Introduced February 4, 2008;
referred to the Committee on the Judiciary.]
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A BILL to amend and reenact §23-2C-2 and §23-2C-5 of the Code of
West Virginia, 1931, as amended; and to amend and reenact §33-
2-10
of said code, all relating to the insurance
commissioner's rulemaking authority for workers' compensation;
and requiring legislative rules.
Be it enacted by the Legislature of West Virginia:
That §23-2C-2 and §23-2C-5
of the Code of West Virginia, 1931,
as amended, be amended and reenacted; and that §33-2-10 of said
code be amended and reenacted, all to read as follows:
CHAPTER 23. WORKERS' COMPENSATION.
ARTICLE 2C. EMPLOYERS' MUTUAL INSURANCE COMPANY.
§23-2C-2. Definitions.
(a) "Executive director" means the Executive Director of the
West Virginia Workers' Compensation Commission as provided in
section one-b, article one of this chapter.
(a) "Assigned Risk Fund" shall be a fund held by the State
Treasurer's office consisting of funds deposited pursuant to this
article. Disbursements shall be made from the Assigned Risk Fund
upon requisitions signed by the Insurance Commissioner. The
obligations of the fund shall be as provided in this article.
(b) "Commission" means the West Virginia Workers' Compensation
Commission as provided by section one, article one of this chapter.
(c) "Insurance Commissioner" means the Insurance Commissioner
of West Virginia as provided in section one, article two, chapter
thirty-three of this code.
(d)(c) "Company" or "successor to the commission" means the
employers' mutual insurance company created pursuant to the terms
of this article.
(d) "Comprehensive financial plan" shall mean the plan
compiled by the director for acceptance by the Insurance
Commissioner identifying and forecasting cash flows, funding
sources, debt terms and structures and scheduled amortization and
permanent resolution of all Old Fund liabilities. The
comprehensive financial plan shall provide for the retirement of
the revenue bonds authorized by article two-d of this chapter and
all realized and potential claims against the Old Fund shall be
fully reserved. The comprehensive financial plan may include any
other information the Insurance Commissioner may require as a basis
for managing the post-transition fiscal soundness of the Old Fund.
(e) "Policy default" shall mean a policyholder that has failed
to comply with the terms of its workers' compensation insurance
policy and is consequently without workers' compensation insurance
coverage.
(e) "Executive director" means the Executive Director of the
West Virginia Workers' Compensation Commission as provided in
section one-b, article one of this chapter.
(f) "Industrial insurance" means insurance which provides all
compensation and benefits required by this chapter.
(f) "Industrial Council" means the advisory group established
in section five of this article.
(g) "Insurer" includes:
(1) A self-insured employer; and
(2) A private carrier.
(g) "Industrial insurance" means insurance which provides all
compensation and benefits required by this chapter.
(h)"Industrial Council" means the advisory group established
in section five of this article.
(h) "Insurance Commissioner" means the Insurance Commissioner
of West Virginia as provided in section one, article two, chapter
thirty-three of this code.
(i)"Mutualization Transition Fund" shall be a fund over which
the State Treasurer is custodian. Moneys transferred or otherwise
payable to the Mutualization Transition Fund shall be deposited in the State Treasury to the credit of the Mutualization Transition
Fund. Disbursements shall be made from the Mutualization
Transition Fund upon requisitions signed by the executive director,
and, upon termination of the commission, the Insurance
Commissioner, and shall be reasonably related to the legal,
operational, consultative and human resource-related expenses
associated with the establishment of the company and the
transferring of personnel from the commission to the company.
(i) "Insurer" means:
(1) A self-insured employer; and
(2) A private carrier.
(j) "New Fund liabilities" shall mean all claims payment
obligations (indemnity and medical expenses) for all claims, actual
and incurred but not reported, for any claim with a date of injury
or last exposure on or after the first day of July, two thousand
five: Provided, That New Fund liabilities shall begin with claims
payments becoming due and owing on said claims on or after the
first day of January, two thousand six.
(j) "Mutualization Transition Fund" shall be a fund over which
the State Treasurer is custodian. Moneys transferred or otherwise
payable to the Mutualization Transition Fund shall be deposited in
the State Treasury to the credit of the Mutualization Transition
Fund. Disbursements shall be made from the Mutualization
Transition Fund upon requisitions signed by the executive director, and, upon termination of the commission, the Insurance
Commissioner, and shall be reasonably related to the legal,
operational, consultative and human resource-related expenses
associated with the establishment of the company and the
transferring of personnel from the commission to the company.
(k)"New Fund liabilities" shall mean all claims payment
obligations (indemnity and medical expenses) for all claims, actual
and incurred but not reported, for any claim with a date of injury
or last exposure on or after the first day of July, two thousand
five: Provided, That New Fund liabilities shall begin with claims
payments becoming due and owing on said claims on or after the
first day of January, two thousand six.
(k) "New Fund" means a fund owned and operated by the
commission and, upon termination of the commission, the successor
organization of the West Virginia Workers' Compensation Commission
and shall consist of those funds transferred to it from the
Workers' Compensation Fund and any other applicable funds. New
Fund shall include all moneys due and payable to the Workers'
Compensation Fund for the quarters ending the thirtieth day of
September, two thousand five, and the thirty-first day of December,
two thousand five, which have not been collected by the Workers'
Compensation Fund as of the thirty-first day of December, two
thousand five.
(l)"Old Fund" shall mean a fund held by the State Treasurer's office consisting of those funds transferred to it from the
Workers' Compensation Fund or other sources and those funds due and
owing the Workers' Compensation Fund as of the thirtieth day of
June, two thousand five, that are thereafter collected. The Old
Fund and assets therein shall remain property of the state and
shall not novate or otherwise transfer to the company.
(l) "New Fund liabilities" means all claims payment
obligations (indemnity and medical expenses) for all claims, actual
and incurred but not reported, for any claim with a date of injury
or last exposure on or after the first day of July, two thousand
five: Provided, That New Fund liabilities shall begin with claims
payments becoming due and owing on said claims on or after the
first day of January, two thousand six.
(m)"Old Fund liabilities" mean all claims payment obligations
(indemnity and medical expenses), related liabilities and
appropriate administrative expenses necessary for the
administration of all claims, actual and incurred but not reported,
for any claim with a date of injury or last exposure on or before
the thirtieth day of June, two thousand five: Provided, That Old
Fund liabilities shall include all claims payments for any claim,
regardless of date of injury or last exposure, through the
thirty-first day of December, two thousand five: Provided,
however, That Old Fund liabilities shall include all claims with
dates of injuries or last exposure prior to the first day of July, two thousand four, for bankrupt self-insured employers that had
defaulted on their claims obligations which have been recognized by
the commission in its actuarially determined liability number as of
the thirtieth day of June, two thousand five.
(m) "Old Fund" means a fund held by the State Treasurer's
office consisting of those funds transferred to it from the
Workers' Compensation Fund or other sources and those funds due and
owing the Workers' Compensation Fund as of the thirtieth day of
June, two thousand five, that are thereafter collected. The Old
Fund and assets therein shall remain property of the state and
shall not novate or otherwise transfer to the company.
(n) "Private carrier" means any insurer or the legal
representative of an insurer authorized by the Insurance
Commissioner to provide workers' compensation insurance pursuant to
this chapter and which maintains an office in the state. The term
does not include a self-insured employer or private employers but
shall include any successor to the commission.
(n) "Old Fund liabilities" means all claims payment
obligations (indemnity and medical expenses), related liabilities
and appropriate administrative expenses necessary for the
administration of all claims, actual and incurred but not reported,
for any claim with a date of injury or last exposure on or before
the thirtieth day of June, two thousand five: Provided, That Old
Fund liabilities shall include all claims payments for any claim, regardless of date of injury or last exposure, through the
thirty-first day of December, two thousand five: Provided,
however, That Old Fund liabilities shall include all claims with
dates of injuries or last exposure prior to the first day of July,
two thousand four, for bankrupt self-insured employers that had
defaulted on their claims obligations which have been recognized by
the commission in its actuarially determined liability number as of
the thirtieth day of June, two thousand five.
(o) "Uninsured Employer Fund" means a fund held by the State
Treasurer's office consisting of those funds transferred to it from
the Workers' Compensation Fund and any other source. Disbursements
from the Uninsured Employer Fund shall be upon requisitions signed
by the Insurance Commissioner, and as otherwise set forth in an
exempt legislative rule promulgated by the workers' compensation
board of managers.
(o) "Policy default" means a policyholder that has failed to
comply with the terms of its workers' compensation insurance policy
and is consequently without workers' compensation insurance
coverage.
(p) "Self-Insured Employer Guaranty Risk Pool" shall be a fund
held by the State Treasurer's office consisting of those funds
transferred to it from the guaranty pool created pursuant to 85 CSR
§19 (2004) and any future funds collected through continued
administration of that exempt legislative rule as administered by the Insurance Commissioner. Disbursements shall be made from the
Self-Insured Employer Guaranty Risk Pool upon requisitions signed
by the Insurance Commissioner. The obligations of the fund shall
be as provided in 85 CSR §19 (2004).
(p) "Private carrier" means any insurer or the legal
representative of an insurer authorized by the Insurance
Commissioner to provide workers' compensation insurance pursuant to
this chapter and which maintains an office in the state. The term
does not include a self-insured employer or private employers but
shall include any successor to the commission.
(q) "Self-Insured Employer Security Risk Pool" shall be a fund
held by the state's Treasurer consisting of those funds paid into
it through the Insurance Commissioner's administration of 85 CSR
§19 (2004). Disbursement from said fund shall be made from the
Self-Insured Employer Security Risk Pool upon requisitions signed
by the Insurance Commissioner. The obligations of the fund shall
be as provided in 85 CSR §19: Provided, That said liabilities
shall be limited to those self-insured employers who default on
their claims obligations after the termination of the commission.
(r) (q) "Private Carrier Guaranty Fund"
shall be means a fund
held by the State Treasurer's office consisting of funds deposited
pursuant to this article. Disbursements shall be made from the
Private Carrier Guaranty Fund upon requisitions signed by the
Insurance Commissioner. The obligations of the fund shall be as provided in this article.
(r) "Self-Insured Employer Guaranty Risk Pool" means a fund
held by the State Treasurer's office consisting of those funds
transferred to it from the guaranty pool created pursuant to 85 CSR
§19 and any future funds collected through continued administration
of that exempt legislative rule as administered by the Insurance
Commissioner: Provided, That, on and after the first day of July,
two thousand nine the exemption shall expire and the rule will be
subject to all of the provisions of article three, chapter twenty-
nine-a of this code. Disbursements shall be made from the Self-
Insured Employer Guaranty Risk Pool upon requisitions signed by the
Insurance Commissioner. The obligations of the fund shall be as
provided in 85 CSR §19.
(s) "Assigned Risk Fund" shall be a fund held by the State
Treasurer's office consisting of funds deposited pursuant to this
article. Disbursements shall be made from the Assigned Risk Fund
upon requisitions signed by the Insurance Commissioner. The
obligations of the fund shall be as provided in this article.
(s) "Self-Insured Employer Security Risk Pool" means a fund
held by the state's Treasurer consisting of those funds paid into
it through the Insurance Commissioner's administration of 85 CSR
§19. Disbursement from said fund shall be made from the Self-
Insured Employer Security Risk Pool upon requisitions signed by the
Insurance Commissioner. The obligations of the fund shall be as provided in 85 CSR §19: Provided, That said liabilities shall be
limited to those self-insured employers who default on their claims
obligations after the termination of the commission.
(t) "Comprehensive financial plan" shall mean the plan
compiled by the director for acceptance by the Insurance
Commissioner identifying and forecasting cash flows, funding
sources, debt terms and structures and scheduled amortization and
permanent resolution of all Old Fund liabilities. The
comprehensive financial plan shall provide for the retirement of
the revenue bonds authorized by article two-d of this chapter and
all realized and potential claims against the Old Fund shall be
fully reserved. The comprehensive financial plan may include any
other information the Insurance Commissioner may require as a basis
for managing the post-transition fiscal soundness of the Old Fund.
(t)"Uninsured Employer Fund" means a fund held by the State
Treasurer's office consisting of those funds transferred to it from
the Workers' Compensation Fund and any other source. Disbursements
from the Uninsured Employer Fund shall be upon requisitions signed
by the Insurance Commissioner, and as otherwise set forth in an
exempt legislative rule promulgated by the insurance commissioner:
Provided, That, on and after the first day of July, two thousand
nine the exemption shall expire and all such rules are subject to
all of the provisions of article three, chapter twenty-nine-a of
this code.
§23-2C-5. Creation of the industrial council; duties.
(a) There is hereby created within the office of the insurance
commissioner an industrial council.
(b) On or before the first day of July, two thousand five, the
Governor with the advice and consent of the Senate, shall appoint
five voting members to the industrial council who meet the
requirements and qualifications prescribed in this subsection. Two
members of the West Virginia Senate and two members of the West
Virginia House of Delegates shall serve as advisory nonvoting
members of the board. The Governor shall appoint the legislative
members to the board. No more than three of the legislative
members may be of the same political party. The Insurance
Commissioner shall serve as an advisory nonvoting member of the
board.
(1) (A) Five members shall be appointed by the Governor with
the advice and consent of the Senate for terms that begin upon
appointment after the effective date of this legislation and expire
as follows:
(i) One member shall be appointed for a term ending the
thirtieth day of June, two thousand seven;
(ii) Two members shall be appointed for a term ending the
thirtieth day of June, two thousand eight; and
(iii) Two members shall be appointed for a term ending the
thirtieth day of June, two thousand nine.
(B) Except for appointments to fill vacancies, each subsequent
appointment shall be for a term ending the thirtieth day of June of
the fourth year following the year the preceding term expired. In
the event a vacancy occurs, it shall be filled by appointment for
the unexpired term. A member whose term has expired shall continue
in office until a successor has been duly appointed and qualified.
No member of the council may be removed from office by the Governor
except for official misconduct, incompetency, neglect of duty or
gross immorality.
(C) No appointed member may be a candidate for or hold elected
office. Members may be reappointed for no more than two full
terms.
(2) Each of the appointed voting members of the council shall
be appointed based upon his or her demonstrated knowledge and
experience to effectively accomplish the purposes of this chapter.
They shall meet the minimum qualifications as follows:
(A) Each shall hold a baccalaureate degree from an accredited
college or university:
Provided, That no more than one of the
appointed voting members may serve without a baccalaureate degree
from an accredited college or university if the member has a
minimum of fifteen years' experience in his or her field of
expertise as required in this subdivision;
(B) Each shall have a minimum of ten years' experience in his
or her field of expertise. The Governor shall consider the following guidelines when determining whether potential candidates
meet the qualifications of this subsection: Expertise in insurance
claims management; expertise in insurance underwriting; expertise
in the financial management of pensions or insurance plans;
expertise as a trustee of pension or trust funds of more than two
hundred beneficiaries or three hundred million dollars; expertise
in workers' compensation management; expertise in loss prevention
and rehabilitation; expertise in occupational medicine demonstrated
by licensure as a medical doctor in West Virginia and experience,
board certification or university affiliation; or expertise in
similar areas of endeavor;
(C) At least one shall be a certified public accountant with
financial management or pension or insurance audit expertise; at
least one shall be an attorney with financial management
experience; one shall be an academician holding an advanced degree
from an accredited college or university in business, finance,
insurance or economics; and one shall represent organized labor.
(D) The council shall appoint one member to serve as
chairperson. The chairperson shall serve for a one-year term and
may serve more than one consecutive term. The council shall hold
meetings at the request of the chairperson or at the request of at
least three of the members of the council, but no less frequently
than once every three months. The chairperson shall determine the
date and time of each meeting. Three members of the council constitute a quorum for the conduct of the business of the council.
No vacancy in the membership of the council shall impair the right
of a quorum to exercise all the rights and perform all the duties
of the council. No action shall be taken by the council except
upon the affirmative vote of three members of the council.
(3) (A) Each voting appointed member of the council shall
receive compensation of not more than three hundred fifty dollars
per day for each day during which he or she is required to and does
attend a meeting of the board.
(B) Each voting appointed member of the council is entitled to
be reimbursed for actual and necessary expenses incurred for each
day or portion thereof engaged in the discharge of official duties
in a manner consistent with guidelines of the travel management
office of the Department of Administration.
(C) Each member of the council shall be provided appropriate
liability insurance, including, but not limited to, errors and
omissions coverage, without additional premium, by the State Board
of Risk and Insurance Management established pursuant to article
twelve, chapter twenty-nine of this code.
(c) The industrial council shall:
(1) In consultation with the Insurance Commissioner, establish
operating guidelines and policies designed to ensure the effective
administration of the workers' compensation insurance market in
West Virginia.
(2) Review and approve, reject or modify rules that are
proposed by the Insurance Commissioner for operation and regulation
of the workers' compensation insurance market before the rules are
filed with the Secretary of State
: Provided, That, on and after the
first day of July, two thousand nine the exemption shall expire and
all such rules are subject to all of the provisions of article
three, chapter twenty-nine-a of this code. The rules adopted by
the industrial council are not subject to sections nine through
sixteen, inclusive, article three, chapter twenty-nine-a of this
code. The industrial council shall follow the remaining provisions
of said chapter for giving notice to the public of its actions and
for holding hearings and receiving public comments on the rules.
(3) In accordance with the laws and rules of West Virginia,
establish and monitor performance standards and measurements to
ensure the timeliness and accuracy of activities performed under
chapter twenty-three of this code and applicable rules.
(4) Submit for approval by the Legislature, as an isolated and
clearly discernable component of the Insurance Commissioner's
budget, a budget for the sufficient administrative resources and
funding requirements necessary for their duties under this article.
(5) Perform all record and information gathering functions
necessary to carry out its duties under this code.
(6) Every two years, conduct an overview of the safety
initiatives currently being utilized or which could be utilized in the workers' compensation insurance market and report said finding
to the Joint Committee on Government and Finance. Each private
carrier and self-insured employer shall cooperate with the council
in the performance of its duties to evaluate insurer services
provided to employers in controlling losses and providing
information on the prevention of industrial accidents or
occupational diseases. Each employer, private carrier and
self-insured employer shall provide to the council, upon request,
any information, statistics or data in its records requested by the
council in the performance of these duties.
(7) Perform all other duties as specifically provided in this
chapter for the industrial council and those duties incidental
thereto.
(8) Establish a method of indexing claims of injured workers
that will make information concerning the injured workers of one
insurer available to other insurers.
(A) Every insurer shall provide information, as required by
the industrial council, for establishing and maintaining the claims
index.
(B) If an employee files a claim with an insurer, the insurer
is entitled to receive from the administrator a list of the prior
claims of the employee. If the insurer desires to inspect the
files related to the prior claims, he or she must obtain the
written consent of the employee or the Insurance Commissioner or his or her designee. The use of the information contained in the
files is limited to the administration of the claim.
CHAPTER 33. INSURANCE.
ARTICLE 2. INSURANCE COMMISSIONER.
§33-2-10. Rules and regulations.
(a) The commissioner is authorized to promulgate and
adopt rules relating to insurance as are necessary to discharge his
or her duties and exercise his or her powers and to effectuate the
provisions of this chapter, protect and safeguard the interests of
policyholders and the public of this state.
(b) The commissioner is authorized to promulgate rules
necessary to discharge his or her duties relating to workers'
compensation insurance as set forth in chapter twenty-three of this
code, which shall be exempt, until the first day of July, two
thousand nine, from the provisions of article three, chapter
twenty-nine-a of this code, article three of this code, except that
these rules shall be filed with the Secretary of State's Office.
Beginning the first day of July, two thousand nine, article three,
chapter twenty-nine-a of the code is applicable to all rules
proposed by the commissioner relating to workers' compensation
insurance.
(c) Prior to assuming regulatory authority over
workers' compensation insurance pursuant to article two-c, chapter
twenty-three of this code, the commissioner shall review and revise all applicable rules to reflect the assumption of this new
regulatory authority: Provided, That all such revisions shall be
exempt from the provisions of chapter twenty-nine-a, article three,
except that the amended rules shall be filed with the Secretary of
State's Office.
NOTE: The purpose of this bill is to remove the current
exemption of the Insurance Commissioner from legislative review of
rules relating to the regulation of workers' compensation insurance
market beginning July 1, 2009.
Strike-throughs indicate language that would be
stricken from the present law, and underscoring indicates new
language that would be added.