Or. Admin. R. 836-043-0021

Current through Register Vol. 63, No. 6, June 1, 2024

Section 836-043-0021 - Servicing Carriers

(1) The Plan Administrator shall establish written requirements that insurers must meet in order to be eligible to act as a servicing carrier. The Plan Administrator shall provide the written requirements to the board for review and acceptance. From among those insurers that are eligible and have applied to act as a servicing carrier, and subject to approval by the Insurance Commissioner, the Plan Administrator shall select a sufficient number of servicing carriers that are needed to handle the assignments made pursuant to the Plan. The Plan Administrator may confer with the board in regard to the number of servicing carriers needed to handle the assignments made pursuant to this Plan. Subject to approval by the Insurance Commissioner, the Plan Administrator may terminate the servicing carrier status of any insurer that fails to meet the servicing carrier requirements on a continuing basis.

(2) In order to be a servicing carrier, an insurer must meet all of the following eligibility criteria:

(a) Be licensed to write workers' compensation and employers liability insurance in Oregon or be the State Accident Insurance Fund Corporation.

(b) Be writing or be an affiliated insurer of a carrier that is currently licensed and actively writing voluntary workers' compensation and employers liability insurance premium in Oregon and that has been licensed and writing in Oregon for each of the five calendar years immediately preceding the first effective year of the proposed contract, or be licensed and actively writing workers' compensation and employers liability insurance in Oregon for a minimum of the most recent three calendar years immediately preceding the first effective year of the proposed contract and active as a workers' compensation servicing carrier in any other national workers' compensation reinsurance organization in another state for a minimum of five calendar years immediately preceding the first effective year of the proposed contract.

(c) Be assigned and maintain at a minimum an "A-" rating as published by A.M. Best, except that such "A-" A.M. Best rating is not applicable to the State Accident Insurance Fund Corporation.

(d) Maintain the necessary staff and facilities to comply with the procedures, Assigned Carrier Performance Standards, financial reporting requirements, and Plan requirements.

(e) Comply with all applicable statutory and regulatory requirements, including but not limited to, statutes, regulations, codes, rules, acts, directives, bulletins, announcements and circulars.

(f) Be either precertified in writing by the Plan Administrator or have achieved and maintained and not be subject to a revocation of precertification or certification status as determined by the Plan Administrator under the applicable precertification or certification program established by the Plan Administrator.

(g) Comply with all mandatory electronic processing and reporting requirements of the Plan Administrator that are currently in effect.

(h) Comply with all federal and state laws and regulations, which relate to the policies applicable to the servicing carrier.

(3) Each servicing carrier shall provide a report to the Plan Administrator in such a format and for such a period as determined by the Plan Administrator, but not less than semiannually. This report, among other things, shall provide information on the servicing carrier's operations related to Plan business in the following areas: underwriting, auditing, claims, loss control, premium collection and customer service. A summary of such reports shall be provided to the Insurance Commissioner.

(4) The Plan Administrator shall establish written procedures for measuring servicing carrier performance. In recognition of the interests of the participating companies who have subscribed to the organizing principles, the Plan Administrator shall provide a copy of such written Assigned Carrier Performance Standards to the board for review and acceptance. Servicing carriers shall manage losses in compliance with the performance standards established hereunder. The Plan Administrator, with the approval of the Insurance Commissioner, shall also establish the compensation for servicing carriers, which shall take into consideration, among other things, provisions for:

(a) Rewarding servicing carriers for positive action targeted at reducing losses and costs;

(b) Disincentives for inefficiencies and service below the minimum Assigned Carrier Performance Standards; and

(c) Servicing carrier capacity.

(5) The Plan Administrator shall monitor and review servicing carrier performance by:

(a) Reviewing the operations reports;

(b) Requiring and reviewing self-audits;

(c) Conducting on-site audits; and

(d) Reviewing any other information available that relates to the servicing carrier.

(6) The Plan Administrator shall require servicing carriers to maintain desired performance levels and shall take appropriate remedial action where necessary including, but not limited to, establishment and administration of a progressive discipline program which may lead to terminating an insurer's servicing carrier status.

(7) Termination of an insurer's servicing carrier status is subject to Insurance Commissioner approval.

(8) Any formal action taken by the Plan Administrator under this rule shall be the exclusive remedy and in lieu of any other penalty or sanction that may apply under the Plan.

(9) Any action taken by the Plan Administrator under this provision is subject to review under OAR 836-043-0070.

(10) In order to fulfill its responsibilities under this Plan, the Plan Administrator shall have the right, itself or through authorized representatives, at all reasonable times during regular business hours, to audit and inspect the books and records of any servicing carrier with respect to any policies, claims, or related documents coming within the purview of the Plan, the organizing principles or the Reinsurance Agreement. Upon request, the Plan Administrator shall make available to the Insurance Commissioner and the board a formal written report on the Plan Administrator's monitoring and enforcement activities related to servicing carriers.

Or. Admin. R. 836-043-0021

ID 4-1994, f. & cert. ef. 4-19-94; ID 10-1996, f. 6-27-96, cert. ef. 7-1-96, Renumbered from 836-043-0040; ID 18-2008, f. 12-9-08, cert. ef. 1-1-09

Stat.Auth.: ORS 656.427, 656.730 & 731.244

Stats. Implemented: ORS 656.427, 656.730 & 737.265