Or. Admin. Code § 836-043-0005

Current through Register Vol. 63, No. 12, December 1, 2024

Section 836-043-0005 - Definitions for the Workers' Compensation Insurance Plan

As used in OAR 836-043-0001 to 836-043-0091:

(1) "Affiliated insurer" or "affiliate" means an insurer that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, another insurer specified, and is required to participate in the Plan pursuant to OAR 836-043-0009. For purposes of this definition, "control" means possession, direct or indirect, of the power to direct or cause the direction of the management and policies of an insurer, whether through the ownership of voting securities, by contract or otherwise. Control is deemed to exist if any person or business enterprise, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies, representing ten percent or more of the voting securities of any other insurer.

(2) "Application" means the form approved for use in the assigned risk market by the Plan Administrator for the purpose of securing workers compensation insurance under the Plan, which contains the required information as described in NCCI's Assigned Risk Supplement to the Basic Manual for Workers' Compensation and Employers Liability Insurance.

(3) "Assigned risk market" means a state insurance plan that provides employers unable to secure coverage in the voluntary market with a means for insuring their operations through a designated insurance carrier.

(4) "Assigned Carrier Performance Standards" means the minimum level of performance for servicing carriers writing coverage on behalf of the Plan. The purpose of the Assigned Carrier Performance Standards is to provide policy issuance and service level requirements that servicing carriers must adhere to in order to provide assigned risk market policyholders with uniform service while reducing the overall loss ratio.

(5) "Board" means the Board of Directors or governing entity of the reinsurance organization selected by the Director to implement the assigned risk plan under ORS 656.730.

(6) "Bona Fide Premium Dispute" means a disagreement relating to a workers' compensation premium established under OAR 836-043-0071(1).

(7) "Client" means any person to whom workers are provided under contract and for a fee on a leased basis.

(8) "Common management interest" means an interest that exists when one or more individuals are or were owners or officers of, or performs or performed management functions for, two or more entities, or for a succession of entities.

(9) "Employer" means any business organization or enterprise that has a statutory right to maintain workers' compensation insurance in Oregon. "Employer" includes:

(a) Any business organization or enterprise that is affiliated at any time as a result of common management or ownership; or

(b) A client business of a worker leasing company as established in ORS 656.850.

(10) "Governing state" means the state that generates the largest amount of payroll.

(11) "Insured" means the employer designated in the information page of a policy to which this Plan is applied and issued by a servicing carrier.

(12) "Insurance Commissioner" means the Director of the Department of Consumer and Business Services or the person appointed by the director to serve as Insurance Commissioner under ORS 705.115.

(13) "Insurer" means the State Accident Insurance Fund Corporation or a person licensed under ORS chapter 731 for workers' compensation that satisfies its participation obligation by subscribing to the organizing principles. By subscribing to the organizing principles, an insurer shares in the results of the reinsurance pooling mechanisms on a pro-rata basis of their net premiums written within the state. The insurer may be assessed or receive disbursements depending upon the reinsurance pooling mechanism's operating results.

(14) "National Council on Compensation Insurance, Inc." and "NCCI" mean a rating organization that is licensed in Oregon to make and file rates, rating values, classifications and rating plans for workers' compensation insurance, and is an organization that authorized workers' compensation insurers may be members for the purpose of satisfying ORS 737.560.

(15) "Net premiums written" means the gross direct premiums charged less all premiums (except dividends and savings refunded under participating policies) returned to insureds for all workers' compensation and occupational disease insurance, exclusive of premiums for employers subject to the Plan, and for employers written under the National Defense Projects Rating Plan and under excess policies.

(16) "Organizing principles" means the agreement and principles of the reinsurance organization, approved by the Director, that govern the management of and participation in the Plan. A carrier participating in the Plan subscribes to the organizing principles. "Organizing principles" may include any of the following, as applicable:

(a) The National Pool reinsurance mechanism that is filed with and approved by the Insurance Commissioner and that is authorized under the Plan to provide reinsurance to the servicing carriers on employers assigned to them under the Plan.

(b) The Bylaws of the National Workers' Compensation Reinsurance Association NFP (NWCRA or Association), whose member insurers participate in the Reinsurance Agreement(s) authorized under this Plan to provide reinsurance to the servicing carriers on employers assigned to them under this Plan. The Bylaws are the agreement subscribed to by insurers selecting Option 2 -- Subscription to organizing principles as their means of satisfying their participation in the Plan.

(c) The agreement or management rules of any reinsurance organization selected by the Director to implement Oregon's assigned risk plan.

(17) "Plan" means the Oregon Workers' Compensation Insurance Plan.

(18) "Plan Administrator" means the organization designated in OAR 836-043-0017, and its agents.

(19) "Producer" means a person who is licensed as an insurance producer under ORS 744.052 to 744.089, whose privileges under this Plan have not been suspended or revoked, designated by the employer or applicant applying under this Plan to secure and maintain workers' compensation and employers liability insurance on behalf of the employer. For purposes of this Plan, the producer is considered to be acting on behalf of the insured or employer applying for coverage under this Plan and not as a producer of the Plan Administrator or of any servicing carrier for Plan business.

(20) "Reasonable offer of voluntary coverage" means any offer for voluntary coverage where the total estimated annual premium is less than or equal to the assigned risk total estimated annual premium including any applicable assigned risk surcharges or pricing programs for all comparable coverage. Subject to the Plan Administrator's discretion, "reasonable offer of coverage" does not include:

(a) An offer that does not provide all of the required coverage (e.g., carrier cannot provide federal coverage or limits of liability);

(b) An offer that includes a deductible or deposit that is a financial burden to the employer as determined by the producer or employer; or

(c) The carrier's financial rating status is below that required by the producer or employer.

(21) "Regulatory authority" means the commissioner, director or superintendent of a state's insurance regulatory agency, or a properly appointed designee of the commissioner, director or superintendent.

(22) "Reinsurance Agreement" means a contractual arrangement among association members providing a quota share reinsurance facility for workers' compensation insurance in a number of states and for which administrative services are provided by the National Council on Compensation Insurance, Inc. in its capacity as administrator as designated under the organizing principles.

(23) "Reinsurance Organization" means the entity selected by the Director to implement Oregon's workers compensation assigned risk plan under ORS 656.730. "Reinsurance Organization" may include:

(a) The National Workers' Compensation Reinsurance Association, a nonprofit corporation whose members provide for contractual quota share reinsurance through reinsurance agreements among themselves as workers' compensation insurers, which affords the insurers an option for complying with state insurance plan requirements by sharing in the experience of certain policies written pursuant to such insurance plans;

(b) The National Workers' Compensation Reinsurance Pool, a contractual reinsurance mechanism among participating workers' compensation insurers, that affords insurers in certain states an option for complying with state insurance plan requirements by sharing in the experience arising out of certain policies written pursuant to such insurance plans; or

(c) Any other entity selected by the Director to implement the Oregon assigned risk plan.

(24) "Servicing carrier" means an insurer, including the State Accident Insurance Fund Corporation, approved by the Insurance Commissioner that has been assigned to provide coverage to an eligible employer who has applied for workers' compensation insurance pursuant to the Plan.

(25) "State" means any state of the United States and the District of Columbia.

(26) "Undisputed premium obligation" means a workers' compensation insurance premium obligation that is not the subject of a bona fide dispute pursuant to ORS 737.318 or 737.505 or by a judicial action, and for which there is no written payment plan in effect between an insurer and employer.

(27) "Workers' compensation insurance" means:

(a) Statutory workers' compensation and occupational disease liability insurance, including insurance for liability under the Longshore and Harbor Workers' Compensation Act, as amended, and the Federal Coal Mine Health and Safety Act of 1969, as amended;

(b) Employers liability insurance written in connection with a workers' compensation insurance policy; and

(c) Such additional coverage as determined by the Plan Administrator and approved by the Insurance Commissioner.

(28) "Workers' Compensation Rating System Review and Advisory Committee" means the committee established pursuant to OAR 836-043-0200 to hear employer grievances pursuant to ORS 737.505.

Note: The Bylaws and the National Pool reinsurance mechanism (Articles of Agreement) are attached to this rule as Exhibit 4.

Or. Admin. Code § 836-043-0005

IC 1-1979(Temp), f. & ef. 10-12-79; IC 1-1980, f. & ef. 1-15-80; IC 1-1982, f. 1-15-82, ef. 7-1-82; ID 10-1989(Temp), f. & cert. ef. 11-3-89; ID 7-1990, f. 4-30-90, cert. ef. 5-1-90; ID 18-1990(Temp), f. & cert. ef. 8-6-90; ID 1-1991, f. & cert. ef. 2-19-91; ID 13-1992, f. & cert. ef. 8-12-92; ID 4-1994, f. & cert. ef. 4-19-94; ID 10-1996, f. 6-27-96, cert. ef. 7-1-96; ID 18-2008, f. 12-9-08, cert. ef. 1-1-09

Exhibits referenced are available from the agency.

Stat. Auth.: ORS 656.427, 656.730 & 731.244

Stats. Implemented: ORS 656.427, 656.730 & 737.265