HB1802 HD1

Report Title:

Workers' Compensation; Return to Work Program; Premium Discount

Description:

Establishes a workers' compensation insurance premium discount for businesses that establish and maintain a return to work program that is certified by the department of labor and industrial relations. (HB1802 HD1)

HOUSE OF REPRESENTATIVES	H.B. NO.	1802
TWENTY-THIRD LEGISLATURE, 2006		H.D. 1
STATE OF HAWAII

A BILL FOR AN ACT

relating to workers' compensation insurance.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. Chapter 386, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§386- Return to work programs; certification. The department shall establish a program to certify effective return to work programs of businesses that are subject to this chapter. The program shall include criteria and procedures that the department deems necessary to ensure that injured employees are provided with suitable return to work opportunities and for businesses to qualify for the workers' compensation insurance premium reduction provided under section 431:14-103(c). The criteria and procedures for this program shall be adopted as rules in accordance with chapter 91."

SECTION 2. Section 431:14-103, Hawaii Revised Statutes, is amended to read as follows:

"§431:14-103 Making of rates. (a) Rates shall be made in accordance with the following provisions:

(1) Rates shall not be excessive, inadequate, or unfairly discriminatory.

(2) Due consideration shall be given to:

(A) Past and prospective loss experience within and outside this State; provided that if the claim does not exceed the selected deductible amount pursuant to section 386-100, and the employer reimburses the insurer for the amount, the claims shall not be calculated in the employer's experience rating or risk category;

(B) The conflagration and catastrophe hazards, if any;

(D) Dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members, or subscribers;

(E) Past and prospective expenses both country-wide and those specially applicable to this State;

(F) Investment income from unearned premium and loss reserve funds; and

(G) All other relevant factors within and outside this State.

(3) In the case of fire insurance rates, consideration shall be given to the experience of the fire insurance business during a period of not less than the most recent five-year period for which that experience is available.

(4) The systems of expense provisions included in the rates for use by any insurer or group of insurers may differ from those of other insurers or groups of insurers to reflect the requirements of the operating methods of any insurer or group with respect to any class of insurance, or with respect to any subdivision or combination thereof for which subdivision or combination separate expense provisions are applicable.

(5) Risks may be grouped by classifications for the establishment of rates and minimum premiums. Classification rates may be modified to produce rates for individual risks in accordance with rating plans that establish standards for measuring variations in hazards or expense provisions, or both. These standards may measure any differences among risks that can be demonstrated to have a probable effect upon losses or expenses. No risk classification may be based upon race, creed, national origin, or the religion of the insured.

(6) Manual, minimum, class rates, rating schedules, or rating plans shall be made and adopted, except in the case of:

(A) Special rates where manual, minimum, class rates, rating schedules, or rating plans are not applicable; and

(B) Specifically rated inland marine risks.

(7) No insurer authorized to do business in this State shall issue any policy that provides or makes available to any risks preferred rates based upon any grouping of persons, firms, or corporations by way of membership, license, franchise, contract, agreement, or any other means, other than common majority ownership of the risks, or except where:

(A) A common stock ownership in and management control of the risks are held by the same person, corporation, or firm;

(B) Permitted or authorized by filings in existence as of January 1, 1988, under the casualty rating law and the fire rating law, as these filings may be amended from time to time;

(C) Health care providers, as defined in section 671-1 that could have joined the patients' compensation fund as it existed in chapter 671, part III, prior to May 31, 1984, joined together with one or more groups of related or unrelated health care providers;

(D) Permitted under article 12; or

(E) Otherwise expressly provided by law.

(b) In cases of workers' compensation insurance, all rates made in accordance with this section shall be given due consideration for good safety records of employers. By premium reductions, dividends, or both, insurance carriers shall recognize good safety performance records of employers in this State.

(c) In cases of workers' compensation insurance, all rates made in accordance with this section shall give due consideration to an effective return to work program of an employer. By premium reductions, dividends, or both, insurance carriers shall recognize effective return to work programs of employers in this state.

[~~(c)~~] (d) Upon the issuance of a certificate by a certified safety and health professional to an employer that the employer has an effective safety and health program pursuant to section 396-4.5, or by the department of labor and industrial relations for an effective return to work program pursuant to section 386- , the insurer shall provide the employer with a workers' compensation insurance premium discount of at least five per cent[;] for an effective safety and health program, and a premium discount of at least per cent for an effective return to work program; provided that the employer shall maintain the effective safety and health program or the effective return to work program throughout the policy period. Standards for the issuance of certificates shall be included in rules adopted by the department of labor and industrial relations pursuant to chapter 91.

[~~(d)~~] (e) For the purpose of ratemaking, all insurers shall treat a volunteer firefighter the same as a firefighter employed by a county fire department; provided that the volunteer firefighters are attached to a station where a firefighter or volunteer firefighter who has been trained and certified to drive a commercial motor vehicle by either the state or county government, as appropriate, and who maintains a category (3) license as defined by section 286-102(b)(3) is on duty at all times or at least four firefighters or volunteer firefighters who have been trained and certified to drive a commercial motor vehicle by either the state or county government, as appropriate, and who maintain a category (3) license as defined by section 286-102(b)(3) are members of the volunteer unit.

[~~(e)~~] (f) Except to the extent necessary to meet the provisions of subsection (a)(1), uniformity among insurers in any matters within the scope of this section is neither required nor prohibited."

SECTION 3. Notwithstanding section 386-72, Hawaii Revised Statutes, the department of labor and industrial relations shall establish rules in accordance with chapter 91, Hawaii Revised Statutes, to certify effective return to work programs of Hawaii businesses for the purpose of receiving the workers' compensation insurance premium discount authorized under section 2 of this Act.

SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 5. This Act shall take effect upon its approval.