SECTIONS 11750-11759.2 - California Statutes

INSURANCE CODE

SECTION 11750-11759.2

11750. (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.

11750.1. 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.

11750.2. 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.

11750.3. 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.

11751. 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.

11751.1. 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.

11751.2. 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.

11751.25. 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.

11751.3. (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.

11751.35. (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.

11751.4. 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.

11751.5. 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.

11751.55. 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.

11751.7. (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.

11751.8. 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.

11751.82. (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
3106 of the Civil Code, and covering two or more of the contractors
or subcontractors that work on that work of improvement.

11751.82. (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.

11751.9. 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.

11752. 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.

11752.1. 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.

11752.2. The reasonable cost of any examination authorized by this
article of any rating or advisory organization shall be paid by the
organization examined.

11752.5. (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.

11752.6. (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.

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) 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.

11752.75. (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.

11752.8. (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.

11752.9. 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.

11753. 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.

11753.1. (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.

11753.2. (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.

11753.3. 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.

11754. 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.

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.

11754.2. 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.

11754.3. 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.

11754.4. 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.

11754.5. 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.

11755. 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.

11756. (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.

11757. 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.

11758. 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.

11758.1. 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.

11759. 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.

11759.1. 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.

11759.2. (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.