SB 175 — Adjust Experience Modification Factor in Workers' Compensation

SecondNOTE: Regular Session Seventy-fifth General Assembly STATE OF COLORADO REREVISED This Version Includes All Amendments Adopted in the Second House LLS NO.

26-1004.01This Yelanabill Lovehas x2295been SENATEprepared BILLfor 26-175the SENATEsignatures SPONSORSHIPof Snyderthe andappropriate Catlin,legislative Benavidez,officers Coleman, Exum, Kipp, Liston, Pelton R., Rodriguez HOUSE SPONSORSHIP Mauro and Richardson,the Barron,Governor. Caldwell, Flanell, Gonzalez R., Keltie e n m 6 E n 0 U U , O i y H a a Senate Committees House Committees R M Business, Labor, & Technology Business Affairs & Labor r d A BILL FOR AN ACT d e 2 C ONCERNING THE ADJUSTMENT OF AN EMPLOYER 'S EXPERIENCE S a 2 U U 7 MODIFICATION FACTOR IN WORKERS 'COMPENSATION .

HTo gdetermine awhether dthe MGovernor ehas Billsigned Summarythe dbill (Note:or taken other action on it, please consult the legislative status sheet, the legislative history, or the Session Laws.

ThisSENATE summaryBILL applies26-175 toBY thisSENATOR(S) billSnyder as introduced and doesCatlin, notreflectanyamendmentsthatmaybesubsequentlyadopted.IfthisbillBenavidez, dExum, passesKipp, thirdListon, readingPelton inR., theRodriguez, houseColeman; of introduction, a bill summary that e m 2 applies to the reengrossed version of this bill will be available at T n 2 http://leg.colorado.gov.) N g 4 E i y S e M The bill creates a process for employers and licensed insurance R r producers to update an employer's experience modification factor when:

3also !REPRESENTATIVE(S) AnMauro openand claimRichardson, isBarron, reportedCaldwell, byFlanell, anGonzalez insuranceR., carrierKeltie. to the rating bureau with a higher open claim amount than the amount after the claim was closed;

andC eONCERNING nTHE !ADJUSTMENT TheOF lowerAN claimEMPLOYER amountS wouldEXPERIENCE reduceMODIFICATION anFACTOR employer'sIN mWORKERS 6'COMPENSATION T. n 0 A U , E i y Shading denotes HOUSE amendment.

Double underlining denotes SENATE amendment.

S a a Capital letters or bold & italic numbers indicate new material to be added to existing law.

R M Dashes through the words or numbers indicate deletions from existing law.

d experiencemodificationfactoratleast.05comparedtothe previouslyreleasedexperiencemodificationfactororfrom above 1.0 to 1.0 or below.

The employer must notify the insurance carrier between the time the claim is reported to a rating bureau and 31 days after the employer's rating effective date.

The insurance carrier is required to credit the employer for a premium change resulting from the revised experience modification factor.

(1) (a) ECHE ACH INSURANCE CARRIER AUTHORIZED TO TRANSACT BUSINESSBUSINESSINTHISSTATE IN THIS STATE, INCLUDING PINNACOLP INNACOL ASSURANCE ,,THAT THAT INSURES AN EMPLOYER AGAINST LIABILITY FOR COMPENSATION UNDER ARTICLES40ARTICLES TO4740 OFTHISTO TITL847OFTHIS UPONTITLE8 NOTIFICATIONUPONNOTIFICATIONBYANEMPLOYEROR BY AN EMPLOYER OR A LICENSED INSURANCEINSURANCEPRODUCERSHALLNOTIFYTHEEMPLOYER PRODUCERSAUTHORIZEDRATING SHALL NOTIFY THE EMPLOYER S AUTHORIZED RATING ORGANIZATION TO REVISE THE EMPLOYER S EXPERIENCE MODIFICATION FACTOR TO REFLECT THE ACTUAL DOLLAR AMOUNT PAID FOR A CLOSED CLAIM________ INSTEADCapital OFletters THEor ACTUALbold DOLLAR& AMOUNTPAIDPLUSRESERVESDETERMINEDPRIORTOTHECLOSUREOFTHEitalic CLAIM.numbers indicate new material added to existing law;

(b)dashes THEthrough EMPLOYERwords ORor LICENSEDnumbers INSURANCEindicate PRODUCERdeletions MUSTfrom NOTIFYexisting THElaw INSURANCEand CARRIERsuch BETWEENmaterial THEis TIMEnot THEpart CLAIMof ISthe REPORTEDact. TO A RATING BUREAU AND THIRTY -ONE DAYS AFTER THE EMPLOYER 'S RATING EFFECTIVE DA.E (2) A N EMPLOYER OR LICENSED INSURANCE PRODUCER MAY NOTIFYANINSURANCECARRIERTOMODIFYANEXPERIENCEMODIFICATION FACTOR PURSUANT TO THIS SECTION ONLY WHEN:

-2- 175 (a) AN OPEN CLAIM ISINSTEAD REPORTEDOF BY THE INSURANCEACTUAL CARRIERDOLLAR TOAMOUNT THEPAID RATINGPLUS BUREAURESERVES WITHDETERMINED APRIOR HIGHERTO OPEN CLAIM AMOUNT THAN THE AMOUNTCLOSURE AFTEROF THE CLAIMCLAIM. WAS CLOSED ;AND (b) THE LOWER CLAIM AMOUNT WOULD REDUCE AN EMPLOYER S EXPERIENCE MODIFICATION FACTOR:

(I)(b) A T LEASTHE .05COMPAREDEMPLOYER TOOR LICENSED INSURANCE PRODUCER MUST NOTIFY THE PREVIOUSLYINSURANCE RELEASEDCARRIER EXPERIENCEBETWEEN MODIFICATIONTHE FACTOR;ORTIME (II)THE ROMCLAIM ABOVEIS 1.0TO1.0REPORTED ORTO BELOW.A RATING BUREAU AND THIRTY ONE DAYS AFTER THE EMPLOYER 'S RATING EFFECTIVE DAT.

(3)(2) THEANEMPLOYERORLICENSEDINSURANCEPRODUCERMAYNOTIFY AUTHORIZEDANINSURANCECARRIERTOMODIFYANEXPERIENCEMODIFICATIONFACTOR RATINGPURSUANT ORGANIZATIONTO SHALLTHIS ADJUSTSECTION THEONLY EXPERIENCEWHEN MODIFICATION: FACTOR WITHIN THIRTY DAYS AFTER NOTIFICATIONFROMTHEINSURANCECARRIERPURSUANT TOSUBSECTION (1) OF THIS SECTION.

THE(a) INSURANCEANOPENCLAIMISREPORTEDBYTHEINSURANCECARRIERTOTHE CARRIERRATING SHALLBUREAU CREDITWITH ANA EMPLOYERHIGHER FOROPEN ACLAIM PREMIUMAMOUNT CHANGETHAN CALCULATEDTHE ASAMOUNT AAFTER RESULTTHE OFCLAIM WAS CLOSED ;AND (b) THE UPDATEDLOWER EXPERIENCECLAIM MODIFICATIONAMOUNT FACTORWOULD WITHINREDUCE THEAN EMPLOYER S'S POLICYEXPERIENCE PERIOD.MODIFICATION FACTOR :

(I) AT LEAST .05 COMPARED TO THE PREVIOUSLY RELEASED EXPERIENCE MODIFICATION FACTOR ;OR (II) ROM ABOVE 1.0TO 1.0OR BELOW .

(3) THE AUTHORIZED RATING ORGANIZATION SHALL ADJUST THE EXPERIENCE MODIFICATION FACTOR WITHIN THIRTY DAYS AFTER NOTIFICATIONFROMTHEINSURANCECARRIERPURSUANTTOSUBSECTION (1) OFTHISSECTION .THEINSURANCECARRIERSHALLCREDITANEMPLOYERFOR A PREMIUM CHANGE CALCULATED AS A RESULT OF THE UPDATED EXPERIENCEMODIFICATIONFACTORWITHINTHEEMPLOYER SPOLICYPERIOD .

except that, if a referendumreferendumpetitionisfiledpursuanttosection1(3)ofarticleVofthestate petitionconstitutionagainstthisactoranitem, is filed pursuant to section 1 (3) of article V of the state constitution against this act or an item, section, or part of this actactwithinthe withinninety-dayperiod the ninety-day period after final adjournment of the general assembly, then the act, item, section, or part will not take effect unless approved bybythe the people at the general election to be held in November 2026 and, in such case, will take effect January1,January 1, 2027, or on the date of the official declaration of the vote thereon bytheby the governor, whichever is later.

PAGE 2-SENATE BILL 26-175 (2) This act applies to claims closed on or after the applicable effective date of this act.

-3-____________________________ 175____________________________ James Rashad Coleman, Sr.

Julie McCluskie PRESIDENT OF SPEAKER OF THE HOUSE THE SENATE OF REPRESENTATIVES ____________________________ ____________________________ Esther van Mourik Vanessa Reilly SECRETARY OF CHIEF CLERK OF THE HOUSE THE SENATE OF REPRESENTATIVES APPROVED________________________________________ (Date and Time) _________________________________________ Jared S.

Polis GOVERNOR OF THE STATE OF COLORADO PAGE 3-SENATE BILL 26-175