These exams were the first limited market conduct exams conducted by the Division of Insurance of workers' compensation companies. The exams revealed these companies had, at times, failed to issue workers' compensation policies with correct premiums. As with American Compensation, the other insurers examined used inaccurate rating elements, which resulted in inaccurate premiums. Two of the companies, Business Insurance Company and American Compensation, also failed to disclose to insureds various actions available to reduce premiums, as required by Colorado law. For example, premium credits are allowed for the implementation of a risk management program that is certified by the Colorado Workers Compensation Cost Containment Board, as well as for an insured that selects a medical provider.
Accurate information is important because the data is used to help establish future rates.
This filing was made on behalf of approximately 150 insurance companies that write workers' compensation insurance in Colorado, and represents the loss experience of those companies for a five-year period. The hearing will afford interested parties the opportunity to comment on the proposal before the Commissioner approves, denies, or modifies the loss cost filing.