(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.
Employers may cooperate with one another to form a self-insurance pool to providethe insurance coverage required by this article for cooperating employers.
Any self-insurance pool authorized by subsection (2) of this section shall not beconstrued to be an insurance company nor otherwise subject to 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 is subject to proceedings authorized by part 5 of article 3 of title 10.
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.
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.
The commissioner of insurance, or the commissioner's designee, shall conduct aninsurance 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.
(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:
Insolvency or impairment;
Refusal or failure to submit an annual report as required by subsection (5) of thissection;
Failure to comply with the provisions of its own rules, resolutions, contracts, orother conditions relating to the self-insurance pool;
Failure to submit to examination or any legal obligation relative thereto;
Refusal to pay the cost of examination as required by subsection (6) of this section;
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;
Failure to otherwise comply with the law of this state, if such failure renders theoperation 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 selfinsurance 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:
Insolvency or impairment;
Failure to comply with the provisions of its own rules, resolutions, contracts, or otherconditions relating to the self-insurance pool;
Failure to submit to examination or any legal obligation relative thereto;
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;
Failure to otherwise comply with the law of this state, if such failure renders theoperation of the self-insurance pool hazardous to the public.
The commissioner of insurance may promulgate reasonable rules and regulationsnecessary to effectuate the purposes of this section.
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.
Each self-insurance pool created under this section shall establish a trust fund, on anannual 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 selfinsurance pool disbands or defaults.
Source: L. 90: Entire article R&RE, p. 529, § 1, effective July 1. L. 92: (3) amended, p. 1500, § 36, effective July 1; (6) amended, p. 1613, § 166, effective July 1. L. 94: (6) amended, p. 1627, § 18, effective May 31. L. 97: (5) amended, p. 1475, § 12, effective June 3. L. 2017: (3) amended, (HB 17-1231), ch. 284, p. 1575, § 13, effective January 1, 2018.
Editor's note: This section is similar to former § 8-44-112 as it existed prior to 1990.