(a) A workers' compensation insurance
assigned risk pool shall establish a written plan of operation.
(b) A plan of operation or amendment to the
plan must be submitted to the director for written approval before its
implementation.
(c) A workers'
compensation insurance assigned risk pool is subject to examination by the
director, and the assigned risk pool shall pay all the expenses of the
examination.
(d) To the extent
practical, rates shall be established and maintained at a level that permits
the assigned risk pool to operate as a self-funded mechanism based upon
(1) premiums charged and collected;
(2) claims incurred, including provisions for
claim development and incurred but not reported claims;
(3) administrative expenses incurred to
operate the assigned risk pool; and
(4) consideration of investment income and
taxes on assigned risk pool claims reserves arising from participation by
insurers in the assigned risk plan.
(e) The workers' compensation review and
advisory committee appointed under
3
AAC 30.200 shall assist and advise the director
regarding assigned risk pool matters, including the selection and oversight of
any plan administrator.
(f) The
plan of operation required under (a) of this section must provide
(1) for the participation of all admitted,
non-exempt insurers who are authorized to write workers' compensation coverage
in this state;
(2) that termination
of participation by an insurer may only be for cause and only with the prior
written permission of the director;
(3) workers' compensation coverage to all
eligible employers that are unable to secure workers' compensation coverage in
this state for exposures in this state;
(4) reasonable rules and procedures for
(A) determining eligibility of employers that
are in good faith entitled to workers' compensation coverage from the assigned
risk pool;
(B) assignment of
employers to participating insurers or selection of servicing
carriers;
(C) binding coverage,
issuing policies, and servicing policies; and
(D) establishing and monitoring performance
standards for participating insurers and servicing carriers;
(5) for the equitable
apportionment of the experience of the assigned risk pool; and
(6) for written notice advising the director
of the amount of the reserves and the method for calculation of incurred but
not reported claims and loss development reserves as they have been implemented
by each participating insurer; the written notice may be provided on behalf of
a member insurer by the reinsurance pool if the member insurer uses the
reinsurance pool's reserve amounts in its annual and quarterly financial
statement blank forms filed with the director.
(g) The plan of operation required under (a)
of this section may provide for
(1) workers'
compensation coverage for eligible employers that are unable to secure workers'
compensation coverage in this state and that also require workers' compensation
coverage in at least one other state if the other state provides coverage for
Alaska exposures through a residual market mechanism similar to the Alaska
assigned risk pool's plan of operation;
(2) the purchase of reinsurance;
(3) direct assignment of risks to an
insurer;
(4) a reinsurance pool
that equitably apportions among its members
(A) the premiums written, earned, and
collected;
(B) the claims incurred,
including provision for claims development and incurred but not reported
claims;
(C) the administrative
expenses incurred to operate the reinsurance pool, including examinations by
the director; and
(D) any overall
operational losses;
(5)
equitable apportionment among participating insurers of administrative expenses
incurred to operate the assigned risk pool, including examinations by the
director;
(6) its own applications,
policies and endorsements, rates and rules, manuals, and similar materials if
they are submitted to the director for approval before their implementation;
or
(7) the director's appointment
of a plan administrator to operate the assigned risk pool.
(h) A plan administrator appointed by the
director under (g) of this section shall agree in writing, as a condition of
appointment,
(1) to be subject to the
jurisdiction of this state;
(2) to
appoint the director as its attorney for service of process;
(3) to be subject to examination at its own
expense by the director, an expense that may be reimbursed under the plan of
operation;
(4) that money collected
for the account of the assigned risk pool will be held in a fiduciary account
maintained in a manner substantially similar to the requirements of
AS
21.27.360, and that the fiduciary account
must be used for all payments made on behalf of the assigned risk
pool;
(5) to present an accounting
to the assigned risk pool detailing all transactions, including information
necessary to support any commissions, charges, or other fees received by or
owing to the plan administrator;
(6) to remit all money due under the plan and
any reinsurance arrangements;
(7)
to maintain a separate bank account for the assigned risk pool;
(8) to maintain separate records for the
assigned risk pool in a manner substantially similar to the requirements of
AS
21.27.350; and
(9) to provide to the assigned risk pool and
its member insurers access to, and the right to audit and copy, any accounts
and records pertaining to the assigned risk pool.
(i) A plan administrator appointed by the
director under (g) of this section does not need to be licensed under AS 21.27
as a reinsurance intermediary broker or a reinsurance intermediary
manager.
