BILL NUMBER: AB 2396 AMENDED
BILL TEXT
AMENDED IN SENATE AUGUST 2, 2010
AMENDED IN SENATE JUNE 28, 2010
AMENDED IN SENATE JUNE 21, 2010
AMENDED IN ASSEMBLY MAY 12, 2010
AMENDED IN ASSEMBLY APRIL 8, 2010
INTRODUCED BY Assembly Member Solorio
FEBRUARY 19, 2010
An act to amend Section 11751.5 Sections
11751.5 and 11752.7 of the Insurance Code, relating to workers'
compensation insurance.
LEGISLATIVE COUNSEL'S DIGEST
AB 2396, as amended, Solorio. Workers' compensation insurance:
rating organizations: statistical agent.
Existing
(1) Existing law requires the
Insurance Commissioner to designate a licensed rating organization,
as defined, as his or her statistical agent to gather and compile
workers' compensation insurers' loss and expense experience
statistics, and all licensed rating organizations are required to
report loss and expense experiences of their member workers'
compensation insurers to the statistical agent. Subject to reasonable
rules approved by the commissioner, the statistical agent is
required to make available those compiled experience statistics to
all licensed rating organizations. The statistical agent is
authorized to make a reasonable charge to other ratings organizations
for the expense incurred by it in combining, tabulating, and
compiling the experience of all workers' compensation insurers.
This bill would require a designated statistical agent
to conduct public meetings, as provided, would specify records of the
designated statistical agent that are public, and would
specify information prohibited from being considered a
public record that the designated statistical agent is
not required to make available to the public .
(2) Existing law requires a licensed rating organization to make
experience rating information contained in its records available to
any insurer, insurance agent, or broker that is admitted or licensed
to transact workers' compensation insurance in this state. Existing
law prohibits a licensed rating organization from entering into an
agreement, as specified, that prohibits information services
companies in the business of publishing or providing experience
rating information immediately prior to September 15, 1989, from
continuing to receive and provide experience rating information.
This bill would require a rating organization to provide
experience rating information, by electronic means, directly to
information service providers in the business of publishing or
providing experience rating information immediately prior to
September 15, 1989, or to advisory organizations, as defined, on a
timely basis, as provided. This bill would require a licensed rating
organization to make experience rating information contained in its
records available to any information services company that is engaged
in furnishing workers' compensation information to insurers,
insurance agents, and insurance brokers, admitted or licensed to
transact workers' compensation insurance in this state, as provided.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 11751.5 of the Insurance Code is amended to
read:
11751.5. (a) 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).
(b) 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.
(c) (1) The designated statistical agent shall conduct
public meetings , that are open to the
public, with regard to all issues involving pure premium rates,
classifications, rating plans, rating systems, manual rules, and
policy and endorsement forms that are properly brought before it in
any of its committees. This shall apply to meetings conducted in
person and via teleconference. Attendance at telephonically
conducted meetings by members of the public shall be made available
by the publication by the organization With respect to
meetings held by telephone conference, the designated statistical
agent shall, in its meeting notices as set forth below
of , publish a call-in number and passcode that
members of the public may use to participate in the meeting.
Members of the public shall be allowed to electronically record the
proceedings of these meetings.
(2) As used in this section, "meeting" includes any congregation
of a majority of the members of any committee that handles
the issues set forth in paragraph (1), as applicable, at the same
time to hear, discuss, or deliberate upon any of those issues.
at which the issues set forth in paragraph (1) are
being heard, discussed, or deliberated if a majority of the members
of any committee are present. Notwithstanding the foregoing, a
meeting shall not include any of the following:
(A) Individual contacts or conversations between a member of any
committee and any other person, including, but not limited to, any
employee or official of the organization that does not violate this
subdivision.
(B) The attendance of a majority of the members of any committee
at an industry conference or other gathering organized by a
person or organization other than the statistical agent ,
provided that a majority of the members do not discuss among
themselves any item that is within the responsibility of the
statistical agent as set forth in this article.
themselves any item that is set forth in paragraph (1).
(C) The attendance of a majority of the members of any committee
at a purely social or ceremonial occasion, provided that a majority
of the members do not discuss among themselves any item that is
within the responsibility of the designated statistical
agent as set forth in this article.
(3) (A) A majority of the members of any committee of the
designated statistical agent shall not, outside a meeting
authorized by this article subdivision
, use a series of communications of any kind, directly or through
intermediaries, to discuss, deliberate,
deliberate or take action on any item of business that
is within the responsibility of the statistical agent as set forth
in this article. any issue set forth in paragraph (1).
(B) Subparagraph (A) shall not be construed as preventing any
employee or officer of the designated statistical agent
from engaging in separate conversations or communications outside of
a meeting authorized by this article duly
noticed by the designated statistical agent with members of any
of its committees in order to answer questions or provide
information regarding matters within the responsibility of
the statistical agent, if that person does not communicate to members
of any of the committees of the board of governors the comments or
position of any other member or members of the committees.
any issue set forth in paragraph (1) if that person does not
communicate to other members of the committees or the board of
governors the comments or positions of any other committee or board
member.
(d) All meetings of the designated statistical agent
authorized under this article that are open
to the public pursuant to subdivision (c) shall comply with the
protections and prohibitions contained in Section 202 of the
Americans with Disabilities Act of 1990 (42 U.S.C. Sec. 12132), and
the federal rules and regulations adopted in implementation of that
act.
(e) (1) The designated statistical agent shall provide
notice of its meetings that are open and to
the public pursuant to subdivision (c). This notice and an
agenda of items to be discussed shall be provided at least 10 days in
advance of the meeting via the designated statistical
agent's Internet Web site. In addition, members of the public may
request notice by regular mail or by e-mail by making a written
request to the designated statistical agent for notice of
meetings that are open and to the
public pursuant to subdivision (c).
(2) Notice may be waived or the 10-day period modified, with
respect to any particular meeting, by the statistical agent'
s governing committee or board upon a request submitted to
the commissioner stating the need for a modified notice and exigent
circumstances requiring waiver of the notice requirement, at least 24
hours in advance of the meeting time set. The approval of the
commissioner shall be deemed granted if a written denial of the
request for waiver or modification of the notice period is not
received at least within 24 hours following
the request or four hours prior to the commencement of the
meeting to be conducted under the modified notice , whichever
occurs first .
(3) Notice of a meeting that does not meet the 10-day notice
requirement under this subdivision shall be posted on the
designated statistical agent's Internet Web site and provided
by e-mail to members of the public who have made a written request
for e-mail notice to the statistical agent of meetings that are open
and to the public pursuant to
subdivision (c). A summary agenda shall be included in each such
notice, but members of any committee may bring additional items of
business to any such meeting.
(f) At any meeting where notice is required pursuant to this
section, the designated statistical agent shall reserve
time for public comment on the issues addressed at the
meeting set forth in subdivision (c) .
(g) Nothing in this section shall be construed to prohibit the
committees of the designated statistical agent from
holding a closed meeting or a closed session of an open and
public meeting a meeting that is open to the public
pursuant to subdivision (c) to discuss any of the following
subjects:
(1) Financial, operational, or personnel information or matters
related to the of the designated
statistical agent.
(2) Nonpublic financial, operational, or personnel information or
matters of member insurers of the designated statistical
agent.
(3) Nonpublic information received from regulators
or provided to the commissioner regarding the
designated statistical agent or members of the
designated statistical agent.
(4) Statutory interpretations and other advice received from legal
counsel to the designated statistical agent, whether in
connection with litigation or otherwise.
(5) Appointment, employment, evaluation of performance, or
dismissal of any employee or vendor that provides products and
services in connection with the operations of the
to the designated statistical agent.
(6) Deliberations concerning the The
purchase, sale, exchange, or lease of real or personal property
, including investment property .
(7) Matters posing a threat of criminal or terrorist activity
against the designated statistical agent, its personnel,
or its property.
(8) Legal , legislative, or regulatory or
legislative matters of the designated statistical
agent, whether potential, pending, or actual , that are
unrelated to the issues in paragraph (1) of subdivision (c)
.
(9) Disputes and purported disputes with or involving members of
the designated statistical agent.
(10) Disciplinary matters involving a specific member of the
designated statistical agent.
(11) Use of an employer's self-insured data in an experience
rating.
(10)
(12) Any other matters as permitted by order or
regulation of the commissioner.
(h) With respect to any closed meeting or session held as
permitted by subdivision (g), the designated statistical
agent shall do both of the following:
(1) Disclose, prior to the closed meeting or the closed session,
the general nature of the item or items to be discussed in the closed
session. The disclosure may take the form of a reference to the item
or items as they are listed by number or letter on the agenda. In
the closed session, the committee may consider only those matters
covered in its disclosure. After any closed session, the committee
shall reconvene in open session prior to adjournment and shall make
any reports, provide any documentation, or make any other disclosures
that may be required consistent with this article
subdivision (c), except with respect to confidential legal or
legislative matters directly related to the designated statistical
agent . The announcements required to be made in open session
pursuant to this subdivision may be made at the location announced in
the agenda for the closed session, as long as the public is allowed
to be present at that location for the purpose of hearing the
announcement.
(2) Provide reports to the commissioner identifying the matters
covered in each such closed meeting or session and the provisions of
subdivision (g) pursuant to which the subject was discussed.
(i) Nothing in this section shall require or authorize the
disclosure of names or other information that would constitute an
invasion of privacy or otherwise unnecessarily divulge the particular
facts concerning the closed session or the disclosure of which is
prohibited by state or federal law.
(j) The commissioner or his or her designated representative shall
be permitted to attend all meetings of the statistical agent,
specifically including closed meetings and sessions. Any information
discussed in closed meetings or sessions shall be treated by the
commissioner and his or her designated representatives as
confidential pursuant to the provisions of Section 12919.
(k) Records of a designated statistical agent that
shall be considered public records and that shall be
made available to the public for purchase for the direct
costs of duplication , either in hard copy or electronic form,
at the discretion of the requestor, include, but are not
limited to, all of the following:
(1) Information releases, including bulletins, general notices,
all committee meeting agendas, and minutes, except for items
expressly excluded by statute, in which case the item shall be
generally identified, and the reason for the exclusion expressed in
writing.
(2) Information or materials provided to the department as part of
or in support of a rating filing.
(3) Actuarial assumptions and calculations made in the course of
ratemaking.
(4) Aggregate data, comprised of data from multiple carriers,
which is used in the ratemaking process.
(5) Aggregate data provided to statistical agent members or
others, including classification experience data and aggregate
payroll data.
(6) Material made available free on the rating statistical agent's
Internet Web site that exists in other forms.
(1) Bulletins and notices with respect to the issues set forth in
paragraph (1) of subdivision (c).
(2) Agendas and minutes for meetings that are open to the public
pursuant to subdivision (c), describing generally, without any
identifying information with regard to a specific insurer or
employer, the items to be discussed in closed session pursuant to
subdivision (g).
(3) Information or materials provided to the commissioner as part
of, or in support of, a rating filing, except when the information
relates to a specific insurer or when the commissioner designates the
information as confidential.
(4) Actuarial assumptions and calculations used to support the
designated statistical agent's recommendations to any committee with
respect to the issues set forth in paragraph (1) of subdivision (c).
(5) Summaries of aggregate data, comprised of data from multiple
carriers, which are used to support the designated statistical agent'
s recommendations to any committee with respect to the issues set
forth in paragraph (1) of subdivision (c).
(7)
(6) Manuals, plans, and classification information,
including codes, materials, books, manuals, or
pamphlets , that outline or delineate the rules or
regulations of the workers' compensation system. with
respect to issues set forth in paragraph (1) of subdivision (c).
(8) Studies or reports created as a result of statute or request
of the department, the Legislature, or any other governmental body,
except to the extent that the department designates a requested
report or study as nonpublic.
(9) Materials used in classes or training for licensees of the
department or the public.
(l) All of the following information, if applicable based on the
facts of the particular case, in the possession of a statistical
agent shall not be considered a public record:
(1) Aggregate data from an individual insurer.
(7) Studies or reports created as a result of a statute or at the
request of the commissioner or Legislature, except to the extent that
the commissioner designates a requested report or study as being
confidential or it includes information that is specific to a single
insurer or employer.
(l) The designated statistical agent shall not be required to make
available to the public any personal, proprietary, confidential, or
trade secret information in its possession, including, but not
limited to:
(1) Data, including aggregate data, submitted by an individual
insurer.
(2) Claims , employers, or policies data relating to
individual claims.
(3) Payroll data relating to an individual employer or policy
.
(4) Medical data relating to an individual injured worker,
employer, or policy.
(4)
(5) Data relating to active investigations by the
designated statistical agent of a member or members initiated
by the statistical agent, the commissioner, or other law enforcement
agency , unles s authorized by the commissioner
.
SEC. 2. Section 11752.7 of the
Insurance Code is amended to read:
11752.7. (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) (1) Notwithstanding any other provision
of law, including this section, a licensed rating organization
may shall 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. Upon request, a rating organization
shall provide experience rating information, by electronic means,
directly to information services providers described in this
paragraph, or to advisory organizations as defined in subdivision (e)
of Section 11750.1, on a timely basis, consistent with its own
releases or updates. A rating organization shall provide this
information at a cost no greater than the direct cost of duplication.
(2) A licensed rating organization shall make experience rating
information contained in its records available to any information
services company that is engaged in furnishing workers' compensation
information to insurers admitted to transact workers' compensation
insurance in this state or to insurance agents or brokers licensed to
transact workers' compensation insurance in this state. The licensed
rating organization shall provide this information to the
information services company by electronic or other means, if the
information services company submits a written statement to the
licensed rating organization stating all of the following:
(A) The information services company is engaged in furnishing
information to workers compensation insurers admitted to transact
workers' compensation insurance in this state or to insurance agents
or brokers licensed to transact workers' compensation insurance in
this state.
(B) The information requested.
(C) The information services company shall furnish any information
provided by the licensed rating organization, including experience
rating information, only to insurers, brokers, or agents, for the
purpose of transacting workers' compensation insurance in this state.
(3) The information services company shall notify the licensed
rating organization within 20 days of the date on which it ceases or
withdraws from furnishing experience rating information to insurers,
agents, or brokers transacting workers' compensation insurance in
this state.
(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.