Article 44 - Insurance

  • 8-44-101.  Insurance requirements
  • 8-44-102.  Contract for insurance subject to workers' compensation act
  • 8-44-103.  Insurers to file system of rating - approval
  • 8-44-104.  Cutting rates - rebates - penalty
  • 8-44-105.  Provisions of policies - primary liability - notice of injury
  • 8-44-106.  Insurer violation - suspension or revocation of license
  • 8-44-107.  Right of insurer to examine books of employer
  • 8-44-108.  Repayments for misclassifications
  • 8-44-109.  Notice of change in rate by classification - notice of policyholder's right to appeal classifications - notice of availability of medical case management services
  • 8-44-110.  Notice of cancellation
  • 8-44-111.  Workers' compensation insurance - deductibles
  • 8-44-112.  Surcharge on workers' compensation insurance premiums - funds
  • 8-44-113.  Data from insurance carriers and self-insured employers related to workers' compensation - studies related to workers' compensation system.  (Repealed)
  • 8-44-114.  Determination of premium
  • 8-44-115.  Calculation of premium - motor vehicle accidents
  • 8-44-116.  Reversionary interests in indemnity benefits prohibited
  • 8-44-201.  Employer as own insurance carrier - revocation of permission
  • 8-44-202.  Workers' compensation self-insurance fund - created
  • 8-44-203.  Department of human services - self-insurance program
  • 8-44-204.  Public entities - self-insurance authorized for workers' compensation - pooled insurance
  • 8-44-205.  Employers - self-insurance pools authorized for workers' compensation
  • 8-44-206.  Guaranty fund and immediate payment fund

 

PART 1
GENERAL PROVISIONS
 8-44-101.  Insurance requirements. 

(1) Any employer subject to the provisions of articles 40 to 47 of this title shall secure compensation for all employees in one or more of the following ways, which shall be deemed to be compliance with the insurance requirements of said articles:
 (a)  By insuring and keeping insured the payment of such compensation in the Pinnacol Assurance fund;
 (b)  By insuring and keeping insured the payment of such compensation with any stock or mutual corporation authorized to transact the business of workers' compensation insurance in this state.  If insurance is effected in such stock or mutual corporation, the employer or insurer shall forthwith file with the division, in form prescribed by it, a notice specifying the name of the insured and the insurer, the business and place of business of the insured, the effective and termination dates of the policy, and, when requested, a copy of the contract or policy of insurance.
 (c)  By procuring a self-insurance permit from the executive director as provided in section 8-44-201, except for public entity pools as described in section 8-44-204 (3), which shall procure self-insurance certificates of authority from the commissioner of insurance as provided in section 8-44-204;
 (d)  By procuring a self-insurance certificate of authority from the commissioner of insurance as provided in section 8-44-205.
 (2)  It shall be unlawful, except as provided in sections 8-41-401 and 8-41-402, for any employer, regardless of the method of insurance, to require an employee to pay all or any part of the cost of such insurance.
 ((3) (a) (I) Except as otherwise provided in subparagraph (II) of this paragraph (a), all public entities in the state shall insure and keep insured the payment of compensation by electing one of the methods provided in subsection (1) of this section. A public entity having an insured payroll of less than one million dollars annually shall not be eligible for self-insurance; except that public entities forming a pool pursuant to section 8-44-204 (3) shall be eligible if the total of all the payrolls of the public entities in the pool exceeds the required minimum(II) Any public entity in the state that is participating in the federal prison industry enhancement certification program pursuant to the federal "Justice System Improvement Act of 1979", 18 U.S.C. sec. 1761 (c), shall insure and keep insured the payment of compensation by electing one of the methods provided in subsection (1) of this section; except that the method for insuring the participants of such program need not be the same method selected by the public entity pursuant to subparagraph (I) of this paragraph (a).
 (b)  For purposes of this subsection (3), the department of human services, by virtue of the self-insurance program established pursuant to section 8-44-203, shall be considered a public entity of the state.

8-44-102.  Contract for insurance subject to workers' compensation act. 

Every contract for the insurance of compensation and benefits as provided in articles 40 to 47 of this title or against liability therefor shall be made subject to all the provisions of said articles, and all provisions in such contract for insurance inconsistent with the provisions of said articles shall be void.  Any contract of insurance issued under said articles by any insurance carrier, including stock and mutual corporations and Pinnacol Assurance, may include and cover any liability of the employer on account of personal injuries sustained by or death resulting therefrom to any employee as such.  No insurance carrier shall write any policy of insurance covering the liability under said articles of any employer doing business within the state of Colorado except on a form that has been previously filed with and approved by the commissioner of insurance, nor shall there be attached to said policy or contract of insurance any endorsement, rider, letter, or other document affecting such contract unless the same has been filed with and the form thereof approved by the commissioner of insurance.  The commissioner of insurance shall from time to time approve and prescribe a standard or universal form, as nearly as possible, for every contract or policy of insurance, endorsement, rider, letter, or other document affecting such contract for use in insuring the compensation provided for in said articles.

8-44-103.  Insurers to file system of rating - approval. 

Every insurance carrier authorized to transact business in this state that insures employers against liability for compensation under the provisions of articles 40 to 47 of this title shall file with the commissioner of insurance its classification of risks, any premiums relating thereto, and any subsequent proposed classification of risks and premiums, together with all rates and any systems of rating.

8-44-104.  Cutting rates  - rebates -  penalty. 

Every insurance carrier that writes compensation insurance shall write insurance at the rates filed with the commissioner of insurance.  The cutting of rates, rebating, or any other method whereby, directly or indirectly, any employer is given the benefit of or obtains a rate lower than that approved by the commissioner of insurance is prohibited.  The commissioner of insurance may suspend the license of any insurance carrier, agent, or broker who violates any provision of this section.  Also, any insurance carrier, any employer, or any officer, agent, or employee thereof who violates any provision of this section is guilty of a misdemeanor and, upon conviction thereof, shall be punished by a fine of not more than one hundred dollars for each such violation.

8-44-105.  Provisions of policies - primary liability - notice of injury.

Every contract insuring against liability for compensation or insurance policy evidencing the same shall contain a clause to the effect that the insurance carrier shall be directly and primarily liable to the employee and, in the event of death, to said employee's dependents to pay compensation, if any, for which the employer is liable, thereby discharging to the extent of such payment the obligations of the employer to the employee; that, as between the employee and the insurance carrier, notice or knowledge of the occurrence of the injury on the part of the employer shall be deemed notice or knowledge, as the case may be, on the part of the insurance carrier; that jurisdiction of the employer, for the purpose of articles 40 to 47 of this title, shall be jurisdiction of the insurance carrier; and that the insurance carrier, in all things, shall be bound by and subject to the orders, findings, decisions, or awards rendered against the employer under the provisions of said articles.  Such policy shall also provide that the employee shall have a first lien upon any amount which becomes owing to the employer from the insurance carrier, and the insurance carrier shall pay the same directly to the employee or the employee's dependents, thereby discharging to the extent of such payment the obligation of the employer to the employee.  The policy shall not contain any provisions relieving the insurance carrier from payment when the employer becomes legally incapable or insolvent or is discharged in bankruptcy or otherwise during the period that the policy is in operation or the compensation remains owing. 

 8-44-106.  Insurer violation - suspension or revocation of license.

If any insurance carrier intentionally, knowingly, or willfully violates any of the provisions of articles 40 to 47 of this title, the commissioner of insurance, on the request of the director, shall suspend or revoke the license or authority of such carrier to do a compensation business in this state. 

 8-44-107.  Right of insurer to examine books of employer.

Any insurance carrier operating under the workers' compensation act may apply to the commissioner of insurance for permission to examine any of the books, payrolls, or other documents of any employer insured by such carrier or of any contractor, subcontractor, lessee, sublessee, or person covered by the employer's compensation insurance to determine the amount of wage expenditure of such employer or of any contractor, subcontractor, lessee, sublessee, or person during any period that such insureds were insured by the insurance carrier.  The commissioner of insurance may grant such carrier authority in writing to make the investigation or may appoint any agents of the division of insurance to conduct the investigation.

 8-44-108.  Repayments for misclassifications. 

(1)  Every insurance carrier authorized to transact business in this state, including Pinnacol Assurance, which insures employers against liability for compensation under the provisions of articles 40 to 47 of this title, is authorized to charge and collect any amount of money that should have been included in premiums paid by an insured but were not included in such premiums as a result of job misclassification.  Upon written request by the employer, the issue of whether a job misclassification occurred shall be determined in writing by the insurance company.  The employer's request shall be made within thirty working days after the anniversary date of the policy or the date of receipt by the employer of notice of a change in job classification.  The insurance company's determination shall be made within thirty days after receipt of the employer's written request.  An employer may appeal any determination of an insurance company made pursuant to this subsection (1) to the workers' compensation classification appeals board, pursuant to section 8-55-102.  If it is determined that a job misclassification occurred and that such misclassification was caused by the failure of the insured to provide accurate or complete data in order to determine the proper classification as requested by the insurance carrier, the repayment may be collected during the term of the contract for such insurance plus an additional reasonable time not to exceed twelve months.
 (2)  Any employer who has purchased insurance against liability for compensation under the provisions of articles 40 to 47 of this title is authorized to recover any amount of money which should not have been included in premiums paid by the employer but which were included in such premiums as a result of job misclassification.  The repayment may be collected during the term of the contract for such insurance plus an additional reasonable time not to exceed twelve months. 

8-44-109.  Notice of change in rate by classification - notice of policyholder's right to appeal classifications - notice of availability of medical case management services.

(1)  Any insurance carrier authorized to transact business in this state, including Pinnacol Assurance, which insures employers against liability for compensation under the provisions of articles 40 to 47 of this title, shall supply information regarding a change in the rate by classification to any insured employer, if such employer has requested that such information be supplied.  Such information shall be supplied within thirty days following release of such information to such insurer by the authorized rating organization and following approval of such rate change by the division of insurance.  As soon as reasonably possible after the division of insurance's approval of a change in rate by classification, the authorized rating organization shall disseminate notice of such approval and change in rate.
 (2)  Every insurance carrier authorized to transact business in Colorado, including Pinnacol Assurance, which insures employers against liability for compensation under the provisions of articles 40 to 47 of this title, shall clearly and conspicuously inform policyholders of their rights to appeal employee classification designations, the procedures to be used for such an appeal, and the types of medical case management that the carrier has available to employees to promote medical cost containment. 

8-44-110.  Notice of cancellation. 

Every insurance carrier authorized to transact business in this state, including Pinnacol Assurance, which insures employers against liability for compensation under the provisions of articles 40 to 47 of this title, shall notify any employer insured by the carrier or Pinnacol Assurance, and any agent or representative of such employer, if applicable, by certified mail of any cancellation of such employer's insurance coverage.  Such notice shall be sent at least thirty days prior to the effective date of the cancellation of the insurance.  However, if the cancellation is based on one or more of the following reasons, then such notice may be sent less than thirty days prior to the effective date of the cancellation of the insurance:  Fraud, material misrepresentation, nonpayment of premium, or any other reason approved by the commissioner of insurance.

 8-44-111.  Workers' compensation insurance - deductibles.

(1) (a) Any employer may agree, as a condition of any contract for the insurance of compensation and benefits as provided in articles 40 to 47 of this title or against liability therefor, to pay an amount not to exceed the split point approved by the commissioner of insurance per claim toward the total amount of any claim payable under articles 40 to 47 of this title. The amount of premium to be paid by an employer who agrees to pay such deductible shall be reduced based upon such deductible in an amount determined by the insurance carrier.
(b) As used in this subsection (1), "split point" means the amount of each loss approved by the commissioner of insurance that an insurer may apply as the primary loss in each workers' compensation claim. The full amount of primary losses counts in each employer's experience modification calculation that determines the employer's percentage credit or surcharge on workers' compensation coverage. The loss amount above the split point is excess loss and constitutes part of each employer's experience modification calculation.
(c) Nothing in this section abrogates an employer's responsibility to pay the full amount of any compensation and benefits due under articles 40 to 47 of this title. It is a violation of this title for an employer or, if insured, the insurer to require any employee to pay any part of the compensation and benefits due under articles 40 to 47 of this title.
(d) It is a violation of this title for an employer or, if insured, the insurer to require an employee to use any other type of insurance, regardless of whether it is provided as a benefit of employment, or any other employment benefit, to pay any portion of any compensation and benefits due under articles 40 to 47 of this title.
(e) Nothing in this subsection (1) allows a carrier to stop offering no-deductible policies.
(1.5)  Whenever any insurer, including Pinnacol Assurance created in section 8 45 101, issues a workers' compensation policy in this state, and annually thereafter, the insurer must issue a policy including the deductible provision if requested by the insured employer; except that the commissioner shall promulgate rules establishing criteria to allow the insurer to deny a deductible policy to an employer based on financial inability to reimburse the insurer for the deductible plan selected.
(2)  The existence of an insurance contract with a deductible or the fact of payment as a result of a deductible shall not affect the requirement of an employer to report an injury or death to the division as required in section 8-43-103 (1).
(3)  The deductible amounts paid by any employer under the provisions of this section shall be excluded from consideration by insurance carriers authorized to transact business in Colorado, including Pinnacol Assurance, which insure employers against liability for compensation under the provisions of articles 40 to 47 of this title, in establishing the modification factors based upon experience used by such insurance carriers to determine premiums.
(4)  Every insurance carrier authorized to transact business in Colorado, including Pinnacol Assurance, which insures employers against liability for compensation under the provisions of articles 40 to 47 of this title, shall clearly and conspicuously inform policyholders of the availability of the deductible option specified in subsection (1) of this section. 

 

8-44-112.  Surcharge on workers' compensation insurance premiums - funds.

(1) (a)  Notwithstanding the provisions of sections 10 3 209 (1) (c) and 10 6 128 (3), C.R.S., for the purpose of offsetting the direct and indirect costs of the administration of the workers' compensation system, every person, partnership, association, and corporation, whether organized under the laws of this state or of any other state or country, every mutual company or association, every captive insurance company, and every other insurance carrier, including Pinnacol Assurance, insuring employers in this state against liability for personal injury to their employees or death caused thereby under the provisions of the "Workers' Compensation Act of Colorado" shall, as provided in this section, pay a surcharge upon the premiums received, whether in cash or not, in this state, or on account of business done in this state, for such insurance in this state, at a rate established by the director by rule, which surcharge shall be reviewed and adjusted annually based upon appropriations made for the direct and indirect costs of the administration of the workers' compensation system, as provided in subsection (7) of this section.  Such insurance carriers shall be credited with all cancelled or returned premiums actually refunded during the year of such insurance.
 (b) (I)  For the purpose of funding the direct and indirect costs of the activities of the division related to the "Workers' Compensation Cost Containment Act", article 14.5 of this title, there shall be added to the surcharge imposed pursuant to paragraph (a) of this subsection (1) an increment not to exceed three-hundredths of one percent upon the premiums received, said surcharge to be reviewed and adjusted annually and paid over to the division in the same manner as specified in this section for the surcharge.
 (II)  Notwithstanding any other provisions of this section, no employer acting as a self-insurer under the provisions of the "Workers' Compensation Act of Colorado" shall be subject to the increment added to the surcharge pursuant to subparagraph (I) of this paragraph (b).
 (III)  All moneys collected pursuant to subparagraph (I) of this paragraph (b) shall be transmitted to the state treasurer, who shall credit the same to the cost containment fund, created in section 8-14.5-108.
 (2)  Every such insurance carrier shall, on July 1, 1987, and semiannually thereafter, make a return, verified by affidavits of its president and secretary, or other chief officers or agents, to the division of workers' compensation, stating the amount of all such premiums received and credits granted during the period covered by such return.  Every insurance carrier required to make such return shall file the same with the division within thirty days after the close of the period covered thereby and shall, at the same time, pay to the division of workers' compensation a surcharge ascertained as provided in subsection (1) of this section, less return premiums on cancelled policies.
 (3)  Every employer acting as a self insurer under the provisions of the "Workers' Compensation Act of Colorado" shall, under oath, report to the division of workers' compensation the business payroll in such form as may be prescribed by the director and at the times in this section provided for premium reports by insurance companies in subsection (2) of this section.  The division shall assess against such payroll a surcharge for the purposes of this section ascertained as provided in subsection (2) of this section on the basic premiums chargeable against the same or most similar industry or business taken from the manual insurance rates, including any discount or experience modification allowed, chargeable by the Pinnacol Assurance fund, and, upon receipt of notice from the division of workers' compensation of the surcharge so assessed, every such self insurer shall, within thirty days after the receipt of such notice, pay to the division of workers' compensation the surcharge so assessed.
 (4)  If any such insurance carrier or self-insurer fails or refuses to make the return required by this article, the director shall assess the surcharge against such insurance carrier or self-insurer at the rate provided for in this section on such amount of premium as the director may deem just, and the proceedings thereof shall be the same as if the return had been made.
 (5)  If any such insurance carrier or self-insurer withdraws from business in this state before the surcharge falls due as provided in this section, or fails or neglects to pay such surcharge, the director shall at once proceed to collect the same; and the director is authorized to employ such legal processes as may be necessary for that purpose.  Suit shall be brought by the director in any of the courts of this state having jurisdiction.
 (6)  The director, in the enforcement of this section, shall have all of the powers granted to said director in the "Workers' Compensation Act of Colorado", and any insurance carrier or self-insurer violating any of the provisions of this section, or failing to pay the surcharge imposed in this section, is guilty of violation of said act and subject to the penalties therein prescribed.
 (7) (a)  All moneys collected pursuant to this section shall be transmitted to the state treasurer, who shall credit the same to the workers' compensation cash fund, which fund is hereby created.  The moneys in the workers' compensation cash fund shall be subject to annual appropriation by the general assembly for the direct and indirect costs of the administration of the "Workers' Compensation Act of Colorado", articles 40 to 47 of this title.  Any interest earned on the investment or deposit of moneys in the workers' compensation cash fund shall remain in the fund and shall not revert to the general fund of the state at the end of any fiscal year.
Notwithstanding any provision of paragraph (a) of this subsection (7) to the contrary, on March 5, 2003, the state treasurer shall deduct six million dollars from the workers' compensation cash fund and transfer such sum to the general fund.
 (b) Notwithstanding any provision of paragraph (a) of this subsection (7) to the contrary, on March 5, 2003, the state treasurer shall deduct six million dollars from the workers' compensation cash fund and transfer such sum to the general fund.
 (c)  Notwithstanding any provision of paragraph (a) of this subsection (7) to the contrary, on March 30, 2009, the state treasurer shall deduct fifteen million seven hundred thousand dollars from the workers' compensation cash fund and transfer such sum to the general fund.

 8-44-113.  Data from insurance carriers and self-insured employers related to workers' compensation - studies related to workers' compensation system.  (Repealed) 
 8-44-114.  Determination of premium.

The amount of the premium to be paid by an employer for a contract of insurance of compensation and benefits as provided in articles 40 to 47 of this title or against liability therefor shall be on the basis of the annual expenditure of money by said employer for the services of persons engaged in such employer's employment; except that no portion of such expenditure representing a per diem payment shall be considered unless such payment is considered wages for federal income tax purposes. 

8-44-115.  Calculation of premium - motor vehicle accidents.

(1)  The amount by which an employer's experience rating is modified, if at all, as the result of a motor vehicle accident in which an employee is injured or killed shall be reduced in accordance with this section if:
 (a)  The employee is entitled to benefits under articles 40 to 47 of this title; and
 (b)  The accident was not caused, wholly or in part, by the employee or the employer; and
 (c)  The use of a motor vehicle is not an integral part of the employer's business, as determined under rules promulgated by the commissioner of insurance under section 10-4-408 (5) (e), C.R.S.
 (2) (a)  Any modification of an employer's experience rating resulting from an accident described in subsection (1) of this section shall reflect the deduction of a loss limitation, the amount of which shall be determined by the commissioner of insurance under rules adopted pursuant to section 10-4-408 (5) (e), C.R.S.
 (b)  All loss experience remaining after deduction of the loss limitation referred to in paragraph (a) of this subsection (2) shall be distributed among all workers' compensation classifications in use in the state as determined by the commissioner of insurance.  For purposes of such distribution, classifications of businesses of which use of a motor vehicle is an integral part may be treated differently from classifications of businesses of which use of a motor vehicle is not an integral part.
 (3)  This section applies to all insurers, including Pinnacol Assurance created in section 8 45 101, offering workers' compensation insurance under articles 40 to 47 of this title.  The provisions of this section shall be disclosed to all policyholders annually.

 

8-44-116.  Reversionary interests in indemnity benefits prohibited.

No provision in a contract for insurance regulated by this article or any contract ancillary to such a contract, including specifically a contract setting up an annuity for indemnity benefits, shall establish a reversionary interest in the insurer for the indemnity benefits. Any such provision is void and unenforceable as against public policy.

PART 2
SELF-INSUREDS
 8-44-201.  Employer as own insurance carrier - revocation of permission.

(1)  The executive director has the discretion to grant to any employer who has accepted the provisions of articles 40 to 47 of this title permission to be its own insurance carrier for the payment of the compensation and benefits provided by said articles.  Such permission may be granted by the executive director after the filing by an employer of such statement and the giving of such information as may be required by the executive director.  The executive director has the sole power to prescribe the rules, regulations, orders, terms, and conditions upon which said permit shall be granted or continued.  Permission for self-insurance may be revoked at any time by the executive director, and the employer, upon notice of revocation, shall immediately insure otherwise all liability.
 (2)  Notwithstanding the provisions of subsection (1)  of this section, the executive director shall not prescribe or apply security requirements in granting or continuing permission for the self-insurance program of the department of human services established pursuant to section 8-44-203 but shall provide instead for alternatives to such security requirements including trust funds, surety bonds, excess insurance, or other security acceptable to the executive director.  The alternative security requirements provided by this subsection (2) shall apply only to claims arising on or after July 1, 1985, and before July 1, 1990.  The trust fund in existence on May 24, 1990, pursuant to the trust agreement between the department of human services, a third party administrator, and the state treasurer, dated June 27, 1985, shall remain in existence through June 30, 1990.
 (3)  Notwithstanding the provisions of subsection (1)  of this section, the executive director shall not prescribe or apply security requirements in continuing permission for an employer which is acting as its own insurance carrier on July 1, 1986, which are in excess of those security requirements in effect on July 1, 1986, unless there is a substantial change in the economic condition or potential liability of such employer.
 (4)  Notwithstanding the provisions of subsection (1) of this section, the executive director shall not prescribe or apply security requirements in granting or continuing permission for a self-insurance program established by the state pursuant to section 24-30-1510.7, C.R.S. 

 8-44-202.  Workers' compensation self-insurance fund - created.

(1)  The executive director shall establish and collect such fees as the executive director determines are necessary to administer this section, which fees shall not supplant funding for any other function of the department of labor and employment.  The fees established pursuant to this subsection (1) shall not exceed two thousand dollars for an initial application or for an annual review of any employer acting as a self-insurer under this section.
 (2)  The executive director shall transmit any moneys received pursuant to subsection (1) of this section to the state treasurer, who shall place such moneys in the workers' compensation self-insurance fund, which fund is hereby created.  The general assembly shall make appropriations from such fund for the purposes of administering this section. 

8-44-203.  Department of human services - self-insurance program.

 The general assembly hereby finds and declares that a program shall be established by the department of human services and the department of labor and employment to provide for a self-insurance program for the department of human services, which shall apply only to claims arising on or after July 1, 1985, and before July 1, 1990. 

8-44-204.  Public entities - self-insurance authorized for workers' compensation - pooled insurance.

(1)  "Public entity", as used in this section, means and includes any county, municipality, school district, and any other type of district or authority organized pursuant to law.
 (2)  A public entity may, after receiving permission pursuant to section 8-44-101 (1) (c), act as its own insurance carrier for compensation and benefits.  Any public entity other than a school district may establish and maintain an insurance reserve fund for self-insurance purposes and may include in the annual tax levy of the public entity such amounts as are determined by its governing body to be necessary for the uses and purposes of the insurance reserve fund, subject to the limitations imposed by section 29-1-301, C.R.S. School districts may establish and maintain an insurance reserve fund in accordance with the provisions of section 22-45-103 (1) (e), C.R.S., using moneys allocated thereto pursuant to the provisions of section  22-54-105 (2), C.R.S. In the event that a public entity has no annual tax levy, it may appropriate from any unexpended balance in the general fund such amounts as the governing body shall deem necessary for the purposes and uses of the insurance reserve fund.
 (3)  Public entities may cooperate with one another to form a self-insurance pool to provide the insurance coverage required by this article for the cooperating public entities.  Any such insurance pool shall be formed pursuant to the provisions of part 2 of article 1 of title 29, C.R.S.  The provisions of articles 10.5 and 47 of title 11, C.R.S., shall apply to moneys of such self-insurance pool.
 (4)  Any self-insurance pool authorized by subsection (3)  of this section shall not be construed to be an insurance company nor otherwise subject to the provisions of the laws of this state regulating insurance or insurance companies; except that the pool shall comply with the applicable provisions of sections 10-1-203 and 10-1-204 (1) to (5) and (10), C.R.S.
 (5)  Prior to the formation of a self-insurance pool, there shall be submitted to the commissioner of insurance a complete written proposal of the pool's operation, including, but not limited to, the administration, claims adjusting, membership, plan for reinsurance, and capitalization of the pool.  The commissioner shall review the proposal within thirty days after receipt to assure that proper insurance techniques and procedures are included in the proposal.  After such review, the commissioner shall have the right to approve or disapprove the proposal.  If the commissioner approves the proposal, the commissioner shall issue a certificate of authority.  The costs of such review shall be paid by the public entities desiring to form such a pool.
 (6)  Each self-insurance pool for public entities created in this state shall file, with the commissioner of insurance on or before March 30 of each year, a written report in a form prescribed by the commissioner, signed and verified by its chief executive officer as to its condition.
 (7)  The commissioner of insurance, or any person authorized by the commissioner of insurance, shall conduct an insurance examination at least once a year to determine that proper underwriting techniques and sound funding, loss reserves, and claims procedures are being followed.  This examination shall be paid for by the self-insurance pool out of its funds at the same rate as provided for foreign insurance companies under section 10-1-204 (9), C.R.S.
 (8) (a)  The certificate of authority issued to a public entity under this section may be revoked or suspended by the commissioner of insurance for any of the following reasons:
 (I)  Insolvency or impairment;
 (II)  Refusal or failure to submit an annual report as required by subsection (6) of this section;
 (III)  Failure to comply with the provisions of its own ordinances, resolutions, contracts, or other conditions relating to the self-insurance pool;
 (IV)  Failure to submit to examination or any legal obligation relative thereto;
 (V)  Refusal to pay the cost of examination as required by subsection (7) of this section;
 (VI)  Use of methods which, although not otherwise specifically proscribed by law, nevertheless render the operation of the self-insurance pool hazardous, or its condition unsound, to the public;
 (VII)  Failure to otherwise comply with the law of this state, if such failure renders the operation of the self-insurance pool hazardous to the public.
 (b)  If the commissioner of insurance finds upon examination, hearing, or other evidence that any participating public entity has committed any of the acts specified in paragraph (a) of this subsection (8) or any act otherwise prohibited in this section, the commissioner may suspend or revoke such certificate of authority if the commissioner deems it in the best interest of the public.  Notice of any revocation shall be published in one or more daily newspapers in Denver which have a general state circulation.  Before suspending or revoking any certificate of authority of a public entity, the commissioner shall grant the public entity fifteen days in which to show cause why such action should not be taken.
 (9) (a)  Any self-insurance pool organized pursuant to this section may invest in securities meeting the investment  requirements established in part 6 of article 75 of title 24, C.R.S., and may also invest in membership claim deductibles and in any other security or other investment authorized for such pools by the commissioner of insurance.
 (b)  Any public entity which is a member of a self-insurance pool which is organized pursuant to this section or any instrumentality formed by two or more of such members may invest in subordinated debentures issued by such self-insurance pool.
 (10)  In addition to workers' compensation coverage pursuant to subsection (3) of this section, a self-insurance pool authorized by subsection (3) of this section may provide property coverage pursuant to section 29-13-102, C.R.S., and liability coverage pursuant to section 24-10-115.5, C.R.S.

 8-44-205.  Employers - self-insurance pools authorized for workers' compensation.

(1)  "Employers", as used in this section, means a bona fide trade or professional association or two or more employers which are engaged in the same or similar type of business or are members of the same bona fide trade or professional association.
 (2)  Employers may cooperate with one another to form a self-insurance pool to provide the insurance coverage required by this article for cooperating employers.
 (3)  Any self-insurance pool authorized by subsection (2)  of this section shall not be construed to be an insurance company nor otherwise subject to the provisions of the laws of this state regulating insurance or insurance companies; except that the pool shall comply with the applicable provisions of sections 10-1-203 and 10-1-204 (1) to (5) and (10), C.R.S., and shall be subject to proceedings authorized by part 5 of article 3 of title 10, C.R.S.
 (4)  Prior to the formation of a self-insurance pool, there shall be submitted to the commissioner of insurance a complete written proposal of the pool's operation, including, but not limited to, the administration, claims adjusting, membership, plan for reinsurance, capitalization of the pool, and risk management programs.  The commissioner shall review the proposal within forty-five days after receipt to assure that proper insurance techniques and procedures are included in the proposal.  After such review, the commissioner shall have the right  to approve or disapprove the proposal.  If the commissioner of insurance has not disapproved the proposal within ninety days of receipt of the proposal, such proposal shall be deemed approved.  If the commissioner approves the proposal, the commissioner shall issue a certificate of authority.  The costs of such review shall be paid by the employers desiring to form such a pool.
 (5)  Each self-insurance pool for employers created in this state shall file with the commissioner of insurance, on or before March 30 of each year, a written report in a form prescribed by the commissioner, signed and verified by its chief executive officer as to its condition.
 (6)  The commissioner of insurance, or the commissioner's designee, shall conduct an insurance examination at least once a year to determine that proper underwriting techniques and sound funding, loss reserves, and claims procedures are being followed.  This examination shall be paid for by the self-insurance pool out of its funds at the same rate as provided for foreign insurance companies under section 10-1-204 (9), C.R.S. 
 (7) (a)  The certificate of authority issued to an employer self-insurance pool under this section may be revoked or suspended by the commissioner of insurance for any of the following reasons:
 (I)  Insolvency or impairment;
 (II)  Refusal or failure to submit an annual report as required by subsection (5) of this section;
 (III)  Failure to comply with the provisions of its own rules, resolutions, contracts, or other conditions relating to the self-insurance pool;
 (IV)  Failure to submit to examination or any legal obligation relative thereto;
 (V)  Refusal to pay the cost of examination as required by subsection (6) of this section;
 (VI)  Use of methods which, although not otherwise specifically proscribed by law, nevertheless render the operation of the self-insurance pool hazardous, or its condition unsound, to the public;
 (VII)  Failure to otherwise comply with the law of this state, if such failure renders the operation of the self-insurance pool hazardous to the public.
 (b)  If the commissioner of insurance finds upon examination, hearing, or other evidence that any participating employer self-insurance pool has committed any of the acts specified in paragraph (a) of this subsection (7) or any act otherwise prohibited in this section, the commissioner may suspend or revoke such certificate of authority if the commissioner deems it in the best interest of the public.  Notice of any revocation shall be published in one or more daily newspapers in Denver which have a general state circulation.  Before suspending or revoking any certificate of authority of an employer self-insurance pool, the commissioner shall grant the employer self-insurance pool fifteen days in which to show cause why such action should not be taken.
 (8)  The commissioner of insurance may supervise or rehabilitate an employer self-insurance pool pursuant to the provisions of parts 4 and 5 of article 3 of title 10, C.R.S., for any of the following reasons:
 (a)  Insolvency or impairment;
 (b)  Failure to comply with the provisions of its own rules, resolutions, contracts, or other conditions relating to the self-insurance pool;
 (c)  Failure to submit to examination or any legal obligation relative thereto;
 (d)  Use of methods which, although not otherwise specifically proscribed by law, nevertheless render the operation of the self-insurance pool hazardous, or its condition unsound, to the public;
 (e)  Failure to otherwise comply with the law of this state, if such failure renders the operation of the self-insurance pool hazardous to the public.
 (9)  The commissioner of insurance may promulgate reasonable rules and regulations necessary to effectuate the purposes of this section.
 (10)  Any self-insurance pool or any trust which provides insurance coverage for purposes of articles 40 to 47 of this title which is in existence and is operating prior to July 10, 1987, is not subject to the requirements of this section and may continue to operate such pool or trust as authorized by law.
 (11)  Each self-insurance pool created under this section shall establish a trust fund, on an annual basis, to provide payment of the total workers' compensation loss cost incurred by all pool members within each given year.  Aggregate excess insurance shall be provided by each self-insurance pool to the statutory limit of coverage, attaching at the maximum amount of each annual trust fund balance, or, in lieu thereof, the commissioner of insurance shall set other security standards which assure payment of workers' compensation in the event that a self-insurance pool disbands or defaults. 

8-44-206.  Guaranty fund and immediate payment fund.

(1)  The general assembly hereby finds and declares that benefits awarded under articles 40 to 47 of this title to claimants employed by self-insurers may be unreasonably delayed or not paid at all if receipt of the proceeds of the bond required of the self-insurer is delayed or if the self-insurer declares bankruptcy or has insufficient reserves to cover the claim.  The general assembly further finds and declares that the creation of an immediate payment fund and a guaranty fund will assure prompt and complete payment of benefits awarded to such claimants.

 (2)  Creation of special funds board - duties.

(a)  For the purposes of carrying out this section, there is hereby created a special funds board which shall exercise its powers and perform its duties and functions as specified in this subsection (2) under the department of labor and employment as if the same were transferred to the department by a type 2 transfer as such transfer is defined in the "Administrative Organization Act of 1968", article 1 of title 24, C.R.S.  Said board shall be composed of five members:  Four members who are managers or employees of self-insured employers in good standing, two of whom shall demonstrate knowledge of risk management and finance, and the executive director.
 (b)  With the exception of the executive director, the board members shall be appointed by the governor and approved by the senate.  The terms of the members of the board first appointed shall be four years, three years, two years, and one year, respectively.  Thereafter, the term for each appointed board member shall be four years.  Members of the board may be reappointed and the executive director shall serve continuously.
 (c)  The members of the board shall receive no compensation but shall be reimbursed for actual and necessary traveling and subsistence expenses incurred in the performance of their duties as members of the board.
 (d)  (I)  The board shall determine the assessments to be made pursuant to subsections (3) and (4) of this section and shall determine the qualifications and requirements for any claims administrators hired to adjust the claims of a self-insurer who fails to meet his obligations with respect to benefits awarded pursuant to articles 40 to 47 of this title.
 (II)  The board shall also participate, in an advisory capacity only, in matters concerning the granting or termination of self-insurance permits and the setting of security requirements.

(3)  Immediate payment fund - assessments - creation of fund.

(a)  The board shall impose an assessment upon each employer self-insured under section 8-44-201.  Assessments under this subsection (3) shall be based upon a ratio equal to the self-insured employer's paid workers' compensation medical and indemnity losses for the most recent self-insurance permit year divided by the aggregate sum of paid medical and indemnity losses by all self-insured employers for that year.  Such losses shall be determined on July 1, 1990, for the most recently completed permit year, and on the first day of July for each year thereafter until the minimum fund balance has been reached.  Contributions to the fund shall not be assets of the self-insured employer.
 (b) (I)  All moneys received by the executive director pursuant to this subsection (3) shall be deposited in the state treasury in the immediate payment fund, which fund is hereby created, and all moneys credited to such fund shall be used solely for the administration and payment of benefits to employees pursuant to this section.  The general assembly shall make annual appropriations out of such fund for the administration of the fund.  The moneys in such fund for the payment of benefits are hereby continuously appropriated to the department for payment of such benefits.  Any moneys not utilized in the fund shall not revert to the general fund.
 (II)  The minimum fund balance shall be three hundred thousand dollars, to be assessed during the first three years at the rate of one hundred thousand dollars annually.  Interest shall accrue to the fund to a maximum fund balance of one million dollars.  Thereafter, the fund balance shall be maintained at one million dollars by refunding the excess funds to each self-insured employer, on a pro rata basis, based on that employer's contribution.

(4)  Guaranty fund - assessments - creation of fund.

(a)  When the board determines that existing security held by an employer self-insured under section 8-44-201 is insufficient to meet its existing liability for workers' compensation benefits, the board shall impose an assessment on each self-insured employer.  The assessment shall be based on a ratio which equals each self-insured employer's paid workers' compensation medical and indemnity losses for the most recent self-insurance permit year divided by the aggregate sum of paid medical and indemnity losses by all self-insured employers for that year.  If necessary, the executive director may direct the board to make an annual assessment thereafter until such time as the present value of the guaranty fund, created in paragraph (b) of this subsection (4), equals the total liability for workers' compensation benefits which are in excess of the security held by the defaulting self-insured employers.
 (b) (I)  All moneys received by the executive director pursuant to this subsection (4) shall be deposited in the state treasury in the guaranty fund, which fund is hereby created.  Such moneys credited to the fund shall be used solely for the administration and payment of benefits to employees pursuant to this section.  The general assembly shall make annual appropriations out of such fund for the administration of the fund.  The moneys in such fund for the payment of benefits are hereby continuously appropriated to the department for payment of such benefits.  Any moneys not utilized in the fund shall not revert to the general fund.
 (II)  All interest shall accrue to the fund.  No amounts shall be refunded until all liability in excess of security held by self-insured employers has been discharged and until the dates imposing limitations on actions, as specified in sections 8-43-103 and 8-43-303 have passed.  When those conditions have been met, the remaining moneys in the fund shall be refunded to each self-insured employer, on a pro rata basis, based on that employer's contribution.
 (c)  Public entities self-insuring under section 8-44-201 shall be exempt from and shall not participate in this subsection (4).
 (5)  The department shall select any claims administrators required under this section based on the qualifications and requirements established by the board.  For the purpose of contracting for such services, the department shall not be subject to articles 101 to 114 of title 24, C.R.S.