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Article 3. Rating And Other Organizations of California Insurance Code >> Division 2. >> Part 3. >> Chapter 3. >> Article 3.

(a) The purpose of this article is to promote the public welfare by regulating concert of action between insurers in collecting and tabulating rating information and other data that may be helpful in the making of adequate pure premium rates for workers' compensation insurance and for employers liability insurance incidental thereto and written in connection therewith for all admitted insurers and in submitting them to the commissioner for approval; to authorize and regulate the existence and cooperation of qualified rating organizations to one of which each workers' compensation insurer shall belong; to authorize and regulate cooperation between insurers, rating organizations and advisory organizations in ratemaking and other related matters to the end that the purposes of this chapter may be complied with and carried into effect.
  (b) Notwithstanding any other provision of law, within 60 days of receiving an advisory pure premium rate filing made pursuant to subdivision (b) of Section 11750.3, the Insurance Commissioner shall hold a public hearing, and within 30 days of the conclusion of the hearing, approve, disapprove, or modify the proposed rate.
As used in this article, unless a different meaning is manifest, the term:
  (a) "Insurer" means every insurer authorized to transact workers' compensation insurance and employer's liability insurance incidental thereto and written in connection therewith in this state, including the State Compensation Insurance Fund;
  (b) "Rating organization" means any organization which has as its primary object or purpose the collecting of loss and expense statistics and other statistical information and data, the making of pure premium rates and those rating plans authorized by Section 11734 for workers' compensation insurance and employer's liability insurance incidental thereto and written in connection therewith and presenting them to the commissioner for approval;
  (c) "Insurance" means workers' compensation insurance and employer' s liability insurance incidental thereto and written in connection therewith;
  (d) "Willful" or "willfully" in relation to an act or omission which constitutes a violation of this article means with actual knowledge or belief that such act or omission constitutes such violation and with specific intent to commit such violation.
  (e) "Advisory organization" means every person, group or organization, other than an insurer, whether located within or without this state, which prepares policy forms or underwriting rules incidental to or in connection with workers' compensation insurance and employer's liability insurance incidental thereto and written in connection therewith or which collects and furnishes to admitted insurers or rating organizations loss statistics or other statistical information and data relating to workers' compensation insurance and employer's liability insurance incidental thereto and written in connection therewith and acts in an advisory capacity to such insurers or rating organizations as distinguished from a ratemaking capacity. No duly authorized attorney at law acting in the usual course of his profession shall be deemed to be an advisory organization.
  (f) "Employer's liability insurance incidental thereto and written in connection therewith" means insurance of any liability of employers for injuries to, or death of, employees arising out of, and in the course of, employment when this insurance is incidental to, and written in connection with, the workers' compensation insurance issued to the same employer and covering the same employer interests.
The provisions of this article shall apply to all workers' compensation insurance and employer's liability insurance incidental thereto and written in connection therewith in this state, except reinsurance.
A rating organization may be organized pursuant to this article and maintained in this state for the following purposes:
  (a) To provide reliable statistics and rating information with respect to workers' compensation insurance and employer's liability insurance incidental thereto and written in connection therewith.
  (b) To collect and tabulate information and statistics for the purpose of developing pure premium rates to be submitted to the commissioner for issuance or approval.
  (c) To formulate rules and regulations in connection with pure premium rates and the administration of classifications and rating systems.
  (d) To inspect risks for classification or rate purposes and to furnish to the insurer and upon request of the employer and after notice to the insurer, to furnish to the employer full information concerning the rates applicable to the employer's insurance.
  (e) To examine policies, daily reports, endorsements or other evidences of insurance for the purpose of ascertaining whether they comply with the provisions of law and to make reasonable rules governing their submission. A rating organization may develop loss data on behalf of its members to assist members in developing plans pursuant to subdivision (e) of Section 11735 and other loss sensitive plans.
  (f) Within one year after expiration of any workers' compensation insurance policy, to initiate test audits of insured employer's payrolls and insurer's audits of those payrolls to check the accuracy and reliability thereof, and to examine all records relative thereto and premises of insured employers.
  (g) To exchange information and experience data with rating organizations, advisory organizations, and insurers in this and other states, with respect to ratemaking.
  (h) To become a member or subscriber of any lawfully authorized ratemaking or advisory organization whenever membership in the organization is necessary or helpful to the rating organization.
  (i) To perform all acts necessary, incidental, or convenient to carry out the foregoing purposes or the provisions of this chapter relating to rating organizations.
On and after January 1, 1952, no rating organization shall conduct its operations in this state without first having filed with the commissioner a written application for and securing a license to act as a rating organization. Any rating organization may make application for and obtain a license as a rating organization if it shall meet the requirements for license set forth in this article. The fee for filing an application for a license as a rating organization is one hundred fifty dollars ($150) payable in advance to the commissioner. Every such rating organization shall file with its application: a. A copy of its constitution, its articles of incorporation, agreement of association, and of its bylaws, rules and regulations governing the conduct of its business, all certified by the custodian of the originals thereof. b. A list of its members who shall not number less than five insurers authorized to write and writing workers' compensation insurance in this state and whose combined experience shall be determined by the commissioner to be reasonably adequate for ratemaking purposes. c. The name and address of a resident of this state upon whom notices of the commissioner or process affecting such rating organization may be served. d. A statement of its qualifications as a rating organization.
To obtain and retain a license, a rating organization shall provide satisfactory evidence to the commissioner that it shall do all of the following:
  (a) Permit any insurer to become a member at a reasonable cost and without discrimination, or to withdraw therefrom.
  (b) Neither have nor adopt any rule or exact any agreement, the effect of which would be to require any member as a condition of membership to adhere to any rates.
  (c) Neither adopt any rule nor exact any agreement, the effect of which would be to prohibit or regulate the payment of dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders or members.
  (d) Neither practice nor sanction any plan or act of boycott, coercion, or intimidation.
  (e) Neither enter into nor sanction any contract or act by which any person is restrained from lawfully engaging in the insurance business.
  (f) Notify the commissioner promptly of every change in its constitution or articles of incorporation, agreement of association, or in its bylaws, rules and regulations governing the conduct of its business; its list of members; and the name and address of the resident of this state designated by it upon whom notices or orders of the commissioner or process affecting the organization may be served.
  (g) Agree that the commissioner or his or her representative may attend all meetings of the organization or any of its committees.
  (h) Agree to permit four members of the public, two representing organized labor and two representing insured employers, to serve on the managing or governing committee of the organization as specified in Section 11751.35.
  (i) Maintain reasonable records of the experience of its members and of the data, statistics or information collected or used in connection with the pure premium rates, classifications, manual rules, and policy and endorsement forms used by its members so that these records will be available at all reasonable times to enable the commissioner to determine whether the rating organization and its members comply with the provisions of this chapter applicable to them. These records shall be maintained in an office within this state. The commissioner may prescribe a uniform system for the keeping of the records which shall be reasonably adapted to the rating organization and its members' method of operation and which shall be applicable to all rating organizations licensed under this article and their members.
The commissioner shall examine each application for license to act as a rating organization and the documents filed therewith and may make any further investigation of the applicant, its affairs and its proposed plan of business, as he deems desirable. The commissioner shall issue the license applied for within 60 days of its filing with him if from such examination and investigation he is satisfied that: a. The business reputation of the applicant and its officers is good. b. The facilities of the applicant are adequate to enable it to furnish the services it proposes to furnish. c. The applicant and its proposed plan of operation conform to the requirements of this chapter. Otherwise, but only after hearing upon notice, the commissioner shall in writing deny the application and notify the applicant of his decision and his reasons therefor. Licenses issued pursuant to this section shall remain in effect until suspended or revoked.
Notwithstanding the provisions of Section 11751, each rating organization possessing a license of indefinite term pursuant to this article shall owe and pay to the commissioner an annual fee of one hundred dollars ($100) in advance on account of such license until its final termination. Such fee shall be for periods commencing on July 1, 1969, and on each July 1st thereafter, and ending on June 30, 1970, and each June 30th thereafter, and shall be due and payable on March 1, 1969, and on each March 1st thereafter, and shall be delinquent on April 1, 1969, and each April 1st thereafter.
(a) Subject to the approval of the commissioner, a rating organization licensed under this article may adopt any reasonable constitution, articles of incorporation, or agreement of association, and may make reasonable rules for the regulation of its members and the conduct of its business by bylaws or otherwise. In a rating organization of which the State Compensation Insurance Fund is a member, it shall be entitled without election to membership on the managing or governing committee and on the classification and rating committee thereof.
  (b) In addition, after consultation with the California Labor Federation, AFL-CIO, other statewide organized labor organizations, and statewide associations representing business, the commissioner shall appoint two public members representing insured employers and two public members representing organized labor to serve on the managing or governing committee of a rating organization. The bylaws of a rating organization shall permit a public member from time to time to designate in his or her stead a representative from the same employer organization or an affiliated employee union, as the case may be, to attend and participate in any meeting of the governing committee of a rating organization.
(a) Four members of the public, two representing organized labor and two representing insured employers, appointed pursuant to subdivision (b) of Section 11751.3, shall be entitled to serve on the managing or governing committee of a rating organization licensed under this article. A public member shall be entitled to vote on all issues involving pure premium rates, classifications, rating plans, rating systems, manual rules and policy, and endorsement forms which are properly brought before the committee. A public member shall be removed by the commissioner only for cause.
  (b) In the event a public member is unable or unwilling to complete his or her term, after consultation with the California Labor Federation, AFL-CIO, other statewide organized labor organizations, and statewide organizations representing business, as the case may be, the commissioner shall appoint a successor from organized labor or an insured employer to complete the unexpired term.
  (c) The public members who serve on the governing committee of a rating organization licensed under this article together may, by a majority vote, retain experts who shall include a fellow of the Casualty Actuarial Society, to advise them on any matter specified in subdivision (a). The actuary hired may participate in all proceedings of the actuarial committee of the rating organization. The reasonable expense of retaining these experts shall not exceed one hundred thousand dollars ($100,000) per year and shall be paid from the budget of the department. The commissioner shall increase this amount annually to reflect any needed cost-of-living adjustments. The public members may submit information obtained from these experts, as well as any other information they deem appropriate, to the commissioner for his or her consideration in approving a change of any matter specified in subdivision (a).
  (d) In addition to the expenses authorized pursuant to subdivision (c), the public members who serve on the governing committee of a rating organization licensed under this article may expend up to an additional one hundred thousand dollars ($100,000) per year, which shall be paid by insurer members of the rating organization. Those funds shall be used to retain staff, who shall be hired by a majority vote of the public members.
From and after the taking effect of this act, it shall be the duty of every insurer to be a member of a rating organization. No insurer may at the same time belong to more than one rating organization licensed under this article.
The commissioner, after notice and hearing, may promulgate reasonable rules and statistical plans, which may be modified from time to time and which shall be used thereafter in the recording and reporting by insurers of their loss and expense experience in order that the experiences of all insurers may be made available in such form and detail as may be necessary to aid the commissioner in administering the provisions of Article 2 (commencing with Section 11730). The commissioner shall designate a rating organization licensed under this article as his or her statistical agent to gather and compile such experience statistics and all licensed rating organizations shall report the experience of their members to such designated rating organization. Subject to reasonable rules approved by the commissioner, such designated rating organization shall make such experience statistics, when compiled, available to all licensed rating organizations and may make a reasonable charge to other rating organizations for the expense incurred by it in combining, tabulating and compiling the experience of all workers' compensation insurers.
If an insurer, the State Compensation Insurance Fund, a rating organization, or an advisory organization requests an official action by the commissioner under Chapters 2 (commencing with Section 11630), 3 (commencing with Section 11690), or 4 (commencing with Section 11770) of this part which he can lawfully consummate only after a noticed public hearing required by law, the commissioner shall require the request to be in writing and require the payment of five hundred ninety dollars ($590), in advance, as a fee for filing such request. Such fee shall be earned even if the request is denied or is granted in an altered form.
(a) The rating organization designated the statistical agent pursuant to Section 11751.5 shall provide to the Director of Industrial Relations, upon request, any information in the possession of, or reasonably attainable by the rating organization, that would assist the Director of Industrial Relations to identify employers who fail to secure adequate insurance in violation of Section 3700 of the Labor Code. The information requested pursuant to this section shall be provided by the rating organization in a form and manner prescribed by the Director of Industrial Relations.
  (b) The rating organization designated the statistical agent pursuant to Section 11751.5 shall provide to the Registrar of Contractors of the Contractor's State License Board, upon request, any information in the possession of, or reasonably attainable by, the rating organization that would assist in identifying licensed contractors who fail to secure adequate insurance in violation of Section 3700 of the Labor Code. The information requested pursuant to this section shall be provided by the rating organization in a form and manner prescribed by the Registrar of Contractors.
An insurer shall report to its rating organization as corrections or revisions of losses, pursuant to the unit statistical plan and uniform experience rating plans approved by the commissioner, if any of the following is applicable:
  (a) A loss record detail was incorrectly reported through mistake other than error of judgment.
  (b) One or more claims are declared noncompensable. A claim is declared noncompensable if any of the following applies:
  (1) There is an official ruling specifically holding that a claimant is not entitled to benefits under the workers' compensation laws of the state, even though the claimant may have been awarded reimbursement for expenses incurred by the claimant in presenting the case.
  (2) No claim was filed during the period of limitation provided by the workers' compensation laws for the filing of the claim, and the carrier, therefore, closes the claim.
  (3) Where the carrier contends, prior to the valuation date, that a claimant is not entitled to benefits under the workers' compensation laws and the claim is officially closed because of the claimant's failure to prosecute the claim.
  (c) The carrier has recovered in an action against a third party.
  (d) A death claim has been compromised over the sole issue of the applicability of the workers' compensation laws of the state.
  (e) The exposure has been reassigned to another classification through the revision of an audit, in which case the insurer shall file with the revision of exposure a revision of losses that will reassign all claims to the appropriate classification.
  (f) A clerical error in either the classification assignment or the type of injury assignment of a given claim, or a group of claims, has been discovered by the insurer.
  (g) A clerical error in either the classification assignment or the type of injury assignment of a given claim has been discovered by the rating organization. The insurer shall, when notified by the rating organization, file a revision of losses or make satisfactory explanation.
  (h) A correction is made in a classification assignment of a given claim, or a group of claims, as a result of the organization test audit of an insured for which the experience has been submitted.
  (i) The claim has been determined to be a joint coverage claim in accordance with the unit statistical plan approved by the commissioner.
(a) An insurer under a wrap-up insurance policy shall report workers' compensation losses and payroll information for each contractor and subcontractor to its rating organization on a timely basis and in accordance with the uniform statistical plan. Within 10 days, upon request, the insurer shall provide to each contractor and subcontractor copies of the report covering workers' compensation losses and payroll information for that contractor or subcontractor.
  (b) For the purposes of this section, a "wrap-up insurance policy" is an insurance policy, or series of policies, written to cover risks associated with a work of improvement, as defined in Section 8050 of the Civil Code, and covering two or more of the contractors or subcontractors that work on that work of improvement.
Whenever a claim or claims used in an experience rating are closed and reported pursuant to the unit statistical plan approved by the commissioner and are valued, in the aggregate, at an amount that is less than 60 percent of the highest reported aggregate value of all of these claims, then the experience rating shall be revised pursuant to the uniform experience rating plan approved by the commissioner based on the most current reported values for all claims used in the experience rating.
The commissioner may, as often as reasonable and necessary, make or cause to be made an examination of each rating or advisory organization to ascertain whether such organizations comply with the legal requirements applicable to it under this article. In lieu of any such examination the commissioner may accept the report of an examination made by the insurance supervisory official of another state or the report of a representative designated by the National Association of Insurance Commissioners.
The officers, managers, agents and employees of any such organization may be examined by the commissioner at any time under oath and shall exhibit all books, records, accounts, documents or agreements governing its method of operation together with all data, statistics and information of every kind and character collected or considered by such organization in the conduct of the operations to which the examination relates.
The reasonable cost of any examination authorized by this article of any rating or advisory organization shall be paid by the organization examined.
(a) Subject to subdivision (b), a licensed rating organization shall make available any policy information contained in its records to the following:
  (1) The Department of Industrial Relations.
  (2) Any other governmental agency if the Insurance Commissioner, after consultation with the licensed rating organization, approves the release of the policy information requested to the agency.
  (b) The Department of Industrial Relations and any other governmental agency shall specify to the licensed rating organization, in writing, the information requested, that the information requested is to be used to facilitate the agency's performance of its constitutional or statutory duties, and that the information received will not be released to others, except in the discharge of a specific statutory or constitutional duty, or published without the prior written consent of the licensed rating organization. In addition, if the Insurance Commissioner's approval is required for the release of the policy information requested, a written copy of the approval shall be submitted to the licensed rating organization.
  (c) As used in this section, "policy information" means information which is contained in a workers' compensation policy, including, but not limited to, the identity and address of the employer, the identity of the insurer, the policy number, and the policy period.
  (d) Information obtained by a governmental agency pursuant to this section shall be confidential and not subject to public disclosure under any other law of this state.
  (e) No licensed rating organization or member thereof, or member of a committee of a licensed rating organization when acting in its capacity as a member of the committee, or officer or employee of a licensed rating organization, when acting within the scope of his or her employment, shall be liable to any person for injury, personal or otherwise, or damages caused or alleged to have been caused, either directly or indirectly, by the disclosure of information to a governmental agency pursuant to this section, or for the accuracy or completeness of the information so disclosed.
  (f) This section shall not be construed as implying the existence of liability in circumstances not defined in this section, nor as implying a legislative recognition that, except for enactment of this section, a liability has existed or would exist in the circumstances stated in this section.
  (g) This section shall not be construed as limiting any authority of a licensed rating organization to disclose information contained in its records to others.
(a) A licensed rating organization shall make available, in writing, to an employer insured under a workers' compensation policy, all policyholder information contained in its records upon request of the employer and after notice to the employer's insurer.
  (b) As used in this section, "policyholder information" means all information relating to the employer's loss experience, claims, classification assignments, and policy contracts. Policyholder information also includes information relating to rating plans, rating systems, manual rules, and any other information that impacts the policyholder's pure premium rates.
  (c) If a licensed rating organization rejects an employer's request for policyholder information, the rating organization shall notify the employer in writing of the reasons for the rejection. An employer whose request has been rejected in whole or in part may appeal to the commissioner in accordance with Section 11753.1. If the commissioner finds that the reasons for the rejection are not justified, he or she may order the rating organization to furnish that information to the employer.
  (d) No licensed rating organization or member of the organization, or member of a committee of a licensed rating organization when acting in its capacity as a member of the committee, or officer or employee of a licensed rating organization, when acting within the scope of his or her employment, is liable to any person for injury, personal or otherwise, or damages caused or alleged to have been caused, either directly or indirectly, by the disclosure of information to an employer under this section or for the accuracy or completeness of the information disclosed.
  (e) This section does not imply the existence of liability in circumstances not defined in this section, nor does it imply a legislative recognition that, except for enactment of this section, a liability has existed or would exist in the circumstances stated in this section.
  (f) This section does not limit any authority of a licensed rating organization to disclose information contained in its records to others.
  (g) There shall be established in all licensed rating organizations a policyholder ombudsman. The policyholder ombudsman shall be a person with sufficient knowledge of the workers' compensation ratemaking process to provide information and assistance to policyholders in obtaining and evaluating the information provided in Article 2 (commencing with Section 11730) and this article, and in Sections 3761 and 3762 of the Labor Code. Every rating organization licensed in this state shall provide compensation for the ombudsman and necessary staff and other necessary resources to allow the ombudsman to provide prompt and complete service to workers' compensation policyholders of this state. The policyholder ombudsman may advise the policyholder in any dispute with insurers or the rating organization that the ombudsman serves, or on appeal to the commissioner as provided in Section 11737.
  (h) For all policies of insurance issued or renewed on or after January 1, 1994, the insurer shall advise the policyholder in writing of the following:
  (1) The policyholder's right to request a written report containing the information set forth in this section from the licensed rating organization of which the insurer is a member, and the policyholder's right to contact the policyholder ombudsman to assist in obtaining and evaluating information relating to rates, together with the telephone number and address of the ombudsman, as well as the policyholder's right to contact the department to resolve a dispute with an insurer, as provided in this section and Section 11737.
  (2) If a participating policy, that upon payment or nonpayment of a dividend the policyholder shall be provided a written explanation, in clear and understandable language, setting forth the basis of the calculation and expressing any dividend in both dollar amount and as a percentage of earned premium under the policy.
  (3) The date when the insurer is required to file the first unit statistical report with the licensed rating organization designated by the commissioner.
(a) A licensed rating organization may make available experience rating information contained in its records to any insurer admitted to transact workers' compensation insurance in this state or to any insurance agent or broker that is licensed to transact workers' compensation insurance in this state, if the insurer, agent, or broker submits a written request to the licensed rating organization stating all of the following:
  (1) The requesting insurer is admitted to transact workers' compensation insurance in this state or that the requesting agent or broker is licensed to transact workers' compensation insurance in this state.
  (2) The information requested.
  (3) The information requested will be used to facilitate the transaction of workers' compensation insurance by the insurer, agent, or broker.
  (4) The information received will not be released by the agent or broker to others, except to facilitate the transaction of workers' compensation insurance by the requesting agent or broker.
  (b) The licensed rating organization may, but shall not be required to, verify that an insurer requesting information under this section is admitted to transact workers' compensation insurance in this state or that an insurance agent or broker requesting information under this section is licensed to transact workers' compensation insurance in this state.
  (c) For purposes of this section:
  (1) "Experience rating information" means information released on microfiche, at an Internet Web site or other electronic format, or in other forms or media by a licensed rating organization that identifies all experience-rated employers, and the experience ratings and classifications or experience modifications that apply or applied to those employers.
  (2) "Transaction," as applied to workers' compensation insurance, includes any of the following:
  (A) Solicitation.
  (B) Negotiations preliminary to execution of a contract of insurance.
  (C) Execution of a contract of insurance.
  (D) Resolution of matters arising out of the contract and subsequent to its execution.
  (d) Experience rating information made available pursuant to this section shall be confidential and shall not be used for any purpose other than to facilitate the transaction of workers' compensation insurance by the insurer, agent, or broker receiving the information pursuant to this section.
  (e) Notwithstanding any other provision of law, including this section, a licensed rating organization may not enter into a contract or other agreement, including its constitution, articles of incorporation, or bylaws that prohibits information services companies in the business of publishing or providing experience rating information immediately prior to September 15, 1989, from continuing on or after September 15, 1989, to receive and provide to others experience rating information from whatever sources and in whatever forms or media.
  (f) No licensed rating organization, member of a licensed rating organization, member of a committee of a licensed rating organization when acting in its capacity as a member of the committee, or officer or employee of a licensed rating organization when acting within the scope of his or her employment, shall be liable to any person for injury, personal or otherwise, or damages caused or alleged to have been caused, either directly or indirectly, by the disclosure of information pursuant to this section, or to the members of those organizations, or for the accuracy or completeness of the information disclosed.
  (g) This section shall not be construed as implying the existence of liability in circumstances not defined in this section, nor as implying a legislative recognition that, except for the enactment of this section, a liability has existed or would exist in the circumstances stated in this section.
  (h) This section shall not be construed as limiting any authority of a licensed rating organization to disclose information contained in its records to others.
(a) (1) Notwithstanding any other provision of law, a licensed rating organization shall, pursuant to regulations adopted by the commissioner after notice and hearing, establish and maintain an Internet Web site for the purposes of assisting any person to determine whether an employer is insured for workers' compensation.
  (2) An Internet Web site developed pursuant to this section shall not include any links to a commercial, for-profit Internet Web site, other than a link to the licensed rating organization's homepage, and shall not contain any advertising other than the name, logo, and contact information of the licensed rating organization.
  (b) The Internet Web site shall:
  (1) Permit a person to submit a query for coverage information concerning a specified employer on a specified date. The specified date shall be within five years of the date of query.
  (2) Permit the query to specify an employer, using the name, address, or other identifying information of the employer, or combinations of identifying information, as may be provided by regulations adopted by the commissioner. Other identifying information may include, but need not be limited to, the employer's federal employer identification number.
  (3) In response to the query, provide the name of the workers' compensation insurer or insurers for the employer on the date specified in the query according to the most recent information available to the rating organization, subject to paragraph (7), and provide a contact address for the insurer from information available to the rating organization, or by providing a hypertext link to insurer information available on the department's Internet Web site.
  (4) Be accessible for inquiries without charge. However, the commissioner may, at his or her discretion, permit the rating organization to impose access restrictions as necessary to deter the use of the Internet Web site for purposes other than those for which it was intended.
  (5) Contain a hypertext link to the Department of Industrial Relations' Internet Web site for the purpose of locating employers who may be self-insured.
  (6) Include any disclaimers that the commissioner may prescribe.
  (7) Be updated to reflect policy information as soon as is reasonably feasible following submission of that information by insurers to the rating organization, as the commissioner shall require.
  (8) Include a disclaimer stating that the search results may not reflect recent changes in information.
  (9) Include a disclaimer stating that the failure of an employer to appear in response to a query does not mean that the employer does not have insurance or is operating in violation of California law.
  (10) Include the date that the Internet Web site was last updated.
  (c) A rating organization shall not be required to disclose on the Internet Web site any policy numbers, inception or expiration dates, or confidential information, as defined by the commissioner.
  (d) The Internet Web site specified in this section shall become operative no later than one year after the effective date of regulations adopted by the commissioner implementing this section.
  (e) The commissioner shall adopt regulations to implement this section no later than January 1, 2011. These regulations shall specify a method by which an employer may dispute through the rating organization or the employer's insurance company the accuracy of the information displayed on the Internet Web site.
  (f) No rating organization, member of a rating organization, or member of a committee of a rating organization when acting within his or her capacity as a member of the committee, or officer or employee of a rating organization when acting within the scope of his or her employment, shall be liable to any person for injury, personal or otherwise, or damages caused, or alleged to have been caused, either directly or indirectly, by the good faith disclosure of information pursuant to this section, or for the accuracy or completeness of any information disclosed in good faith.
  (g) This section shall not be construed to create liability except as provided in this section, nor as a legislative recognition that, except for the enactment of this section, a liability would exist.
  (h) Nothing in this section shall be construed as limiting the authority of a rating organization to disclose information contained in its records to others.
  (i) The commissioner shall conduct a review and evaluation of the establishment and operation of the Internet Web site and an assessment of whether it is achieving its intended purpose and provide a written report on his or her findings no later than July 1, 2013. The report shall include, to the extent possible, statistics on usage, error rates, user complaints, and efforts undertaken by the commissioner to improve the operation of the Internet Web site. The commissioner shall present a copy of the report to the office of the President pro Tempore of the Senate, the Speaker of the Assembly, the Senate Committee on Banking, Finance and Insurance, the Assembly Committee on Insurance, the Department of Finance, and the Department of Industrial Relations and shall make it available on the Internet Web site of the Department of Insurance.
(a) For all policies of insurance issued, or renewed for the first time on or after January 1, 1995, the insurer shall provide a notice, approved by the commissioner, to the policyholder, explaining in easily understandable language the workers' compensation rating laws. For policies issued or renewed between January 1, 1994, and January 1, 1995, inclusive, the insurer shall include a notice to the policyholder, in easily understandable language, containing a summary of the changes in the rating laws enacted during the 1993-94 Regular Session of the Legislature.
  (b) The notice required by this section may be combined with the notice required by subdivision (h) of Section 11752.6.
Notwithstanding subdivision (d) of Section 11750.3, a rating organization shall provide a policyholder with written notification if it imposes a change in the classification assignment of the policyholder. The written notification shall be provided to the policyholder at the same time that it is provided to the insurer. A rating organization may satisfy this requirement by furnishing the policyholder with a copy of the notice that it provides to the insurer regarding the change in classification assignment.
No advisory organization shall conduct its operations in this State unless and until it has filed with the commissioner: a. A copy of its constitution, articles of incorporation, agreement of association, and of its by-laws, rules and regulations governing its activities, all duly certified by the custodian of the originals thereof. b. A list of its members and subscribers. c. The name and address of a resident of this State upon whom notices or orders of the commissioner or process may be served. Every such advisory organization shall notify the commissioner promptly of every change in its constitution, its articles of incorporation, agreement of association, and of its by-laws, rules and regulations governing the conduct of its business; its list of members and subscribers; and the name and address of the resident of this State designated by it upon whom notices or orders of the commissioner or process affecting such organizations may be served. No such advisory organization shall engage in any unfair or unreasonable practice with respect to its activities.
(a) Any person aggrieved by any decision, action, or omission to act of a rating organization may request that the rating organization reconsider the decision, action, or omission. If the request for reconsideration is rejected or is not acted upon within 30 days by the rating organization, the person requesting reconsideration may, within a reasonable time, appeal from the decision, action, or omission of the rating organization. The appeal shall be made to the commissioner by filing a written complaint and request for a hearing specifying the grounds relied upon. If the commissioner has information on the subject appealed from and believes that probable cause for the appeal does not exist or that the appeal is not made in good faith, the commissioner may deny the appeal without a hearing. The commissioner shall otherwise hold a hearing to consider and determine the matter presented by the appeal.
  (b) Any insurer adopting a change in the classification assignment of an employer that results in an increased premium shall notify the employer in writing, or if the insurance was transacted through an insurance agent or broker, the insurer shall notify the agent or broker who shall notify the employer in writing of the change and the reasons for the change. Any employer receiving this notice shall have the right to request reconsideration and appeal the reclassification pursuant to this section. The notice required by this section shall inform the employer of his or her rights pursuant to this section. No notification shall be required when the change is a result of a regulation adopted by the Department of Insurance or other action by or under the authority of the commissioner. An insurer shall provide written notification of the revised classification assignment to an employer within 30 days after adoption.
(a) If a change in a classification assignment on a workers' compensation insurance policy is due to an erroneous classification and results in a decreased premium, the classification change shall become effective as of the inception date of a policy in effect on the date the revised classification assignment is published by an insurer or, if the classification is assigned by the designated rating organization, when the insurer and insured are notified in writing by the designated rating organization that the erroneous classification assignment is under review. The revised classification assignment shall be applied as of the inception date of a policy that expired no more than 12 months prior to the date the revised classification assignment was published or the insurer and insured were notified in writing by the designated rating organization that assigned the classification that the erroneous classification assignment was under review, provided that the erroneous classification assignment was applicable to that policy.
  (b) If a change in a classification assignment on a workers' compensation insurance policy is due to an erroneous classification and results in an increased premium, the classification change shall become effective on the effective date of the erroneous classification assignment provided any of the following conditions occur:
  (1) The revised classification assignment is published within three months of the effective date or publication date of the erroneous assignment.
  (2) The insurer or, where applicable, the designated rating organization, was notified in writing within three months of the effective date or publication date of the erroneous classification assignment of a possible error.
  (3) The designated rating organization notified the insurer in writing within three months of the effective date or publication date of the erroneous classification assignment that the erroneous classification assignment was under review. If one or more of the conditions set forth in paragraphs (1), (2), and (3) do not occur, the revised classification assignment shall become effective as of the date it is published unless the publication date is less than three months prior to the expiration date of the outstanding policy, in which case the revised classification assignment shall become effective as of the inception date of the policy that replaced the outstanding policy.
  (c) If a change in a classification assignment on a workers' compensation policy is due to an insured's change of operations, any resulting increase or decrease in premium shall become effective on the date of the change of operations.
  (d) Any insurer that violates this section shall be subject to civil penalties in an amount of up to five thousand dollars ($5,000) per violation.
Notwithstanding Section 1851.1, a workers' compensation insurance rating organization licensed pursuant to the provisions of this article which does not make rates, rating plans or rating systems for insurance covering employers against their liability for compensation or damages under the United States Longshoremen's and Harbor Workers' Compensation Act (33 U.S.C. 901, et seq.) shall not be required to be licensed as a rating organization or registered as an advisory organization pursuant to the provisions of Chapter 9 (commencing with Section 1850) of Part 2 of Division 1, and shall have authority under its license as a workers' compensation insurance rating organization issued pursuant to this article to:
  (a) Collect and tabulate loss and expense experience statistics and other information and data relating to insurance covering employers against their liability for compensation under the United States Longshoremen's and Harbor Workers' Compensation Act.
  (b) Furnish or exhange such information and experience data to or with rating organizations, advisory organizations and insurers in this and other states.
  (c) Adopt and enforce compliance by its insurer members with reasonable rules and statistical plans to be used in the recording and reporting by insurer members of their California longshoremen and harbor workers' insurance loss and expense experience in order that such experience of all of its insurer members shall be available in such form and detail as will be of aid to the commissioner in the enforcement of and to its insurer members in complying with the provisions of Chapter 9 (commencing with Section 1850) of Part 2 of Division 1.
  (d) Engage in the same activities and carry out the same functions with respect to insurance covering the liability of employers for compensation or damages under the United States Longshoremen's and Harbor Workers' Compensation Act that it is authorized to engage in or carry out with respect to California workers' compensation insurance generally under the provisions of this article other than the making of rates, rating plans and rating systems.
If the commissioner has good cause to believe that a rating or advisory organization or an insurer does not comply with the requirements of this article applicable to it, he shall, unless he has good cause to believe that such noncompliance is wilful, give notice in writing to such organization or insurer, stating therein in what manner and to what extent such noncompliance is alleged to exist and specifying therein a reasonable time, not less than 10 days thereafter, in which such noncompliance may be corrected. Notices under this section shall be confidential as between the commissioner and the organization or insurer unless a hearing is held under Section 11754.1.
If the commissioner has good cause to believe such noncompliance to be wilful, or if within the period prescribed by the commissioner in the notice required by Section 11754 the organization or insurer does not make such change as may be necessary to correct the noncompliance specified by the commissioner or establish to the satisfaction of the commissioner that such noncompliance does not exist, then the commissioner may hold a public hearing in connection therewith, provided that within a reasonable period of time, which shall not be less than 10 days before the date of such hearing, he shall mail written notice specifying the matters to be considered at such hearing to such organization or insurer. Such notice shall conform to the requirements for an accusation as prescribed by Section 11503 of the Government Code. If no notice has been given as provided in Section 11754 such notice shall state therein in what manner and to what extent noncompliance is alleged to exist. The hearing shall not include any additional subjects not specified in the notices required by Section 11754 or this section.
If, after a hearing pursuant to Section 11754.1, the commissioner finds: a. That any rating or advisory organization or other organization authorized by this article or any insurer has violated the provisions of this article applicable to it, he may issue an order to such organization or insurer which has been the subject of the hearing, specifying in what respect such violation exists and stating when, within a reasonable period of time, the violation shall cease. b. That any conditions prerequisite to the granting of a license to a rating organization no longer exist, he may issue an order to such organization which has been the subject of the hearing specifying the condition which has ceased to exist and stating when within a reasonable time the condition shall be complied with. If the condition is not complied with within the time specified the commissioner may suspend or revoke the license of such organization, in addition to any other penalty provided in this article. c. That any rating organization has wilfully engaged in any fraudulent, dishonest act or practice, he may suspend or revoke the license of such organization, in addition to any other penalty provided for in this article.
In addition to other penalties provided in this code the commissioner may suspend or revoke the license of any rating organization or insurer which fails to comply within the time limited by such order or extension thereof which the commissioner may grant, with an order of the commissioner lawfully made by him pursuant to Section 11754.1 and effective pursuant to Section 11754.5.
Except as otherwise provided in this article, all proceedings in connection with the denial, suspension or revocation of a license of a rating organization or insurer under this article shall be conducted in accordance with the provisions of Chapter 5 of Part 1 of Division 3 of Title 2 of the Government Code and the commissioner shall have all the powers granted to him therein.
Any finding, determination, rule, ruling, or order made by the commissioner under this article or Article 2 (commencing with Section 11730) shall be subject to review by the courts of the state pursuant to Section 1094.5 of the Code of Civil Procedure.
No person, insurer, rating or advisory organization shall willfully withhold information from, or knowingly give false or misleading information to, the commissioner or to any rating organization, which will affect the rates, rating systems or premiums for workers' compensation insurance and employer's liability insurance incidental thereto and written in connection therewith. In the event of the refusal by any insured employer to permit an audit or an examination provided for in subdivision (f) of Section 11750.3, the commissioner shall, upon the verified petition of the rating organization concerned, take such action as the commissioner may be authorized to take pursuant to and subject to the provisions of this code and of the Government Code.
(a) Any person, insurer, or organization, who fails to comply with a final order of the commissioner under this article shall be liable to the state in an amount not exceeding fifty dollars ($50), but if the failure is willful, he, she, or it shall be liable to the state in an amount not exceeding five thousand dollars ($5,000) for the failure. The commissioner shall collect the amount so payable and may bring an action in the name of the people of the state of California to enforce collection. These penalties may be in addition to any other penalties provided by law.
  (b) A willful violation of the provisions of this article by any person is a misdemeanor.
Nothing in this article shall be construed to prohibit or regulate the payment of dividends, savings or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members or subscribers. A plan for the payment of dividends, savings or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members or subscribers shall not be deemed a rating plan or system.
No act done, action taken or agreement made pursuant to the authority conferred by this article shall constitute a violation of or grounds for prosecution or civil proceedings under any other law of this State heretofore or hereafter enacted which does not specifically refer to insurance.
The provisions of this article shall not apply to the workers' compensation insurance covering those persons defined as employees by subdivision (d) of Section 3351 of the Labor Code.
The Legislature hereby finds and declares as follows: The Legislature pursuant to its plenary power over workers' compensation granted by Section 4 of Article XIV of the California Constitution has authorized classification of risks and premium rates and systems of merit rating for workers' compensation insurance. The selective and discretionary inspection of locations, plants and operations of employers for classification and rating purposes, the gathering and compiling of experience statistics and other data by rating organizations licensed by the Insurance Commissioner, and the application of standards predicated upon the reliability of such classifications and merit rating data are essential to the proper functioning of the classifications of risks and premium rates and systems of merit rating which are regulated by the Insurance Commissioner as authorized by the Legislature. In order to implement and facilitate the proper and adequate administration of such classifications of risks and rates and systems of rating by such licensed rating organizations and the Insurance Commissioner, it is important and in the public interest that licensed rating organizations and their officers and employees shall not be liable for injury or death or other damage caused or alleged to have been caused by their failure to inspect, or negligent or incomplete inspection of, an employer's location, plant or operation for classification or rating purposes. No licensed rating organization or member thereof in its character as a member, or officer or employee of such licensed rating organization when acting within the scope of his employment, shall be liable for injury or death or other damage proximately caused by a failure to inspect, or the manner or extent of inspection of, an employer's locations, plants or operations for classification or rating purposes, or by such person's comment, or failure to comment, on the subject matter or object of such inspection. This section shall not be construed as implying the existence of liability in circumstances not defined in this section; nor as implying a legislative recognition that, except for the enactment of this section, a liability has existed or would exist in circumstances stated in this section.
A rating organization shall, no later than June 1 of each year, notify the Governor and the Legislature that a report containing an analysis of all losses and expenses for the prior year by all insurers who are members of the organization is available on request. The first report shall be due June 1, 1996. The report shall include, but not be limited to, the following:
  (a) An analysis of all medical costs identifying separately the amounts paid for medical treatment to hospitals and physicians, and the amounts paid for medical-legal expenses. The amounts paid for medical treatment to physicians shall also identify the amounts paid for each specialty authorized to provide medical services pursuant to Sections 3209.3, 3209.5, and 3209.8 of the Labor Code. The amounts paid for medical-legal evaluations shall also be subcategorized by specialty and shall identify average costs paid per claim.
  (b) An analysis of indemnity benefits paid for temporary disability, permanent total disability, permanent partial disability, life pensions, death benefits, and funeral expenses. The permanent partial disability benefits also shall be reported according to the degree of impairment in the following categories: .25 to 24.75 percent, 25 to 69.75 percent, and 70 to 99.75 percent.
  (c) An analysis of amounts paid for vocational rehabilitation subcategorized by amounts paid for maintenance allowance, evaluation, education and training.
  (d) An analysis of expenses of insurers categorized by loss adjustment, acquisition, general expenses, profit, and taxes. Amounts spent for defense attorneys' expense shall be separately identified.
  (e) An analysis of attorney's fees paid to applicant attorneys.
  (f) An analysis of workers' compensation costs by the type of injury or illness generally following the injury classification in the Annual Redesigned Occupational Safety and Health Statistical Program used by the Department of Industrial Relations in its annual report on California work injuries and illnesses.
(a) A licensed rating organization designated as the Insurance Commissioner's statistical agent shall prepare a report to be submitted to the Insurance Commissioner by April 1, 2003, on the potential underreporting of workers' compensation exposure in the taxicab industry. The report shall include an analysis of workers' compensation exposure, loss, and premium in the taxicab industry. The licensed rating organization shall submit a report to the Governor, the Legislature, and the commissioner by May 1, 2003, that describes its findings.
  (b) A licensed rating organization designated as the insurance commissioner's statistical agent may confer with state agencies, including, but not limited to, the Employment Development Department, in the preparation of the study. The state agencies shall provide all necessary statistical or other information requested by the licensed rating organization designated as the Insurance Commissioner' s statistical agent.