Senate Engrossed

 

 

 

 

State of Arizona

Senate

Fiftieth Legislature

First Regular Session

2011

 

 

SENATE BILL 1567

 

 

 

AN ACT

 

amending section 23-963.01, Arizona Revised Statutes; relating to workers' compensation.

 

 

(TEXT OF BILL BEGINS ON NEXT PAGE)

 



Be it enacted by the Legislature of the State of Arizona:

Section 1.  Section 23-963.01, Arizona Revised Statutes, is amended to read:

START_STATUTE23-963.01.  Policies with deductible coverage; report; civil penalty

A.  Notwithstanding the provisions of section 23‑963, an insurance carrier authorized to transact workers' compensation insurance in this state may offer deductible coverage to employers.  Deductible coverage shall be effected by attaching a benefits deductible endorsement to the policy.  The endorsement shall specify whether loss adjustment expenses are to be treated as advancements within the deductible to be reimbursed by the employer.  The policyholder exercising the deductible option shall choose only one deductible amount.  Premium reductions for deductibles shall be determined before application of any experience modification, premium surcharge or premium discount.  If an insurance carrier offers deductible coverage to an employer, the employer shall submit a certified copy of the employer's most recent financial statement to the insurance carrier to justify the deductible amount the employer chooses.  The insurance carrier shall retain a copy of the financial statement for three years.

B.  Any compensable claim for benefits shall be paid by the carrier.  The employer shall reimburse the carrier for any deductible amounts paid by the carrier.  The employer is liable for reimbursement up to the limit of the chosen deductible.  The payment or nonpayment of deductible amounts by the insured employer to the carrier shall be treated under the policy in the same manner as payment or nonpayment of premiums.

C.  The nonpayment of deductible amounts by the insured employer to the carrier under subsection B of this section shall not relieve the insurance carrier from payment of compensation for injuries or death sustained by an employee during the period of time the agreement, contract or policy was in effect.  No agreements, contracts or policies providing deductible amounts for workers' compensation coverage shall be terminated retroactively for nonpayment of deductible amounts.

D.  Losses subject to the deductible shall be reported and recorded as losses for purposes of calculating rates for a policyholder on the same basis as losses under policies providing first dollar coverage.

E.  An insurance carrier that issues or renews a deductible coverage policy shall submit a report to the commission on a form or in a format approved by the commission.  The report shall be submitted quarterly and on any other date specifically requested by the commission.  The commission may require the reporting of information related to each deductible policy issued or renewed, including any of the following:

1.  The name of the policyholder.

2.  The name of the insurance carrier.

3.  The deductible amount of the policy issued.

4.  The premium collected or contracted for under section 23-961, subsection J for the deductible policy.

5.  The amount of the premium that would have been paid if there had been no reduction, adjustment, credit or modification of the premium for the amount of the deductible.

6.  The losses described under subsection D of this section.

F.  The commission may impose a civil penalty against an insurance carrier that fails to provide the information required to be reported to the commission pursuant to subsection E of this section in an amount of five hundred dollars for each instance of failure to report.  The commission shall deposit, pursuant to sections 35-146 and 35-147, penalties collected PURSUANT to this subsection in the special fund established by section 23‑1065. END_STATUTE