287.896. Residual market, department to develop plan--insurers to participate, rates, procedures--duties of director.
Residual market, department to develop plan--insurers to participate,rates, procedures--duties of director.
287.896. 1. Within forty-five days of August 28, 1993, the director ofthe department of insurance, financial institutions and professionalregistration shall approve a plan of operation for a new residual market thatwill guarantee insurance coverage and quality loss prevention and controlservices for employers seeking coverage through the plan. The new residualmarket 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 equitableapportionment among them of insurance which may be afforded applicants who arein good faith entitled to but who are unable to procure such insurance throughordinary methods, except that all employers that have expiring annual premiumsgreater than two hundred fifty thousand dollars must negotiate a retrospectiverating plan with their insurer that is acceptable to the director of thedepartment of insurance, financial institutions and professional registration. The rates, supplementary rate information and policy forms to be used in sucha plan and any future modification thereof must be submitted to the directorfor approval at least seventy-five days prior to their effective date. Suchrates shall be set by the director after hearing so that the amount requiredin premiums, together with reasonable investment income earned on thosepremiums, is not excessive, inadequate or unfairly discriminatory and isactuarially sufficient to apply claims and losses and reasonable operatingexpenses of the insurers. Nothing contained herein shall prevent the directorfrom including a merit rating plan for nonexperienced rated employers withinthe residual market plan. The director shall adopt within the plan a systemto distribute any residual market deficit through an assessment on insurancecarriers authorized to write workers' compensation insurance in proportion tothe respective share of voluntary market premium written by such carrier.
3. The director shall disapprove any filing that does not meet therequirements of this section. A filing shall be deemed to meet suchrequirements unless approved, disapproved or modified by the director withinseventy-five days after the filing is made. In disapproving a filing madepursuant to this section, the director shall have the same authority andfollow the same procedures as in disapproving a rate filing pursuant to therequirements for filings in the voluntary market. The designated advisoryorganization 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 anyemployer insured through the plan shall receive the same quality of service inthe areas of employee classification, safety engineering, loss control, claimshandling and claim reserving practices as do employers which are voluntarilyinsured as provided in section 287.123. The standards established by thedirector pursuant to this subsection shall also specify the procedures andgrounds under which an employer insured through the plan shall be assigned aninsurer, and the method by which such employers shall be informed of suchprocedures and grounds. All insurers of the residual market shall processapplications, conduct safety engineering or other loss control services andprovide claims handling within the state of Missouri or adjoining states.
(L. 1993 S.B. 251 § 14)