AN ACT
RELATING TO INSURANCE; PROVIDING FOR
REGULATION OF CONTROLLED INSURANCE PLANS; AMENDING THE WORKERS' COMPENSATION
ACT; PROVIDING A PENALTY.
BE IT ENACTED BY THE LEGISLATURE OF
THE STATE OF NEW MEXICO:
Section 1. Section 52-1-1.1 NMSA 1978 (being Laws 1986,
Chapter 22, Section 26, as amended) is amended to read:
"52-1-1.1. DEFINITIONS.--As used in Chapter 52, Articles
1 through 6 NMSA l978:
A. "controlled insurance plan" means a
plan of insurance coverage that is established by an owner or principal
contractor that requires participation by contractors or subcontractors who are
engaged in the construction project, including coverage plans that are for a
fixed term of coverage on a single construction site;
B. "director" means the director of
the workers' compensation administration;
C. "division" means the workers'
compensation administration;
D. "rolling wrap-up or consolidated
insurance plan" means coverage for an ongoing project or series of
projects in which the common insurance program remains in place indefinitely
and contracted work is simply added as it occurs under the control of one owner
or principal contractor;
E. "workers' compensation judge" means
an individual appointed by the director to act as a workers' compensation judge
in the administration of the Workers' Compensation Act or the New Mexico
Occupational Disease Disablement Law;
F. "workman" or "workmen"
means worker or workers;
G. "Workmen's Compensation Act" means
the Workers' Compensation Act; and
H. "workmen's compensation
administration" or "administration" means the workers'
compensation administration administratively attached to the labor
department."
Section 2. A new section of the Workers' Compensation
Act is enacted to read:
"CONTROLLED INSURANCE
PLAN--PENALTY.--
A. An owner or the principal contractor of a
construction project may establish and administer a controlled insurance plan,
provided the covered project is a construction project, a plant expansion or
real property improvements within New Mexico with an aggregate construction
value in excess of one hundred fifty million dollars ($150,000,000) expended
within a five-year period. As used in
this section, "aggregate construction value" includes design,
utilities, site excavation, construction costs of improvements to real property
and acquisition of equipment and furnishings but does not include the cost of
fees or charges associated with financing the construction project.
B. Rolling wrap-ups are prohibited. Controlled insurance plans covering
non-contiguous construction sites are prohibited.
C. The owner shall include in any request for
proposals for bids a notice that participation in a controlled insurance plan
is a requirement of the bid and shall provide a copy of the specifications of
the controlled insurance plan. The
specifications shall include a statement of the bidding contractor's or
subcontractor's responsibilities relative to the plan.
D. A dispute regarding which workers'
compensation coverage or insurer is responsible shall be resolved by the
administration. An administrative or
judicial finding shall include appropriate reimbursement of benefit payments
and expenses. For disputed cases as
described herein, initial benefits shall be provided by the controlled insurance
plan until such time as the coverage dispute is resolved.
E. An owner or principal contractor who
enters into a contract for a controlled insurance plan shall file a copy of the
contract and evidence of compliance with the requirements of this section with
the superintendent of insurance and the workers' compensation administration at
least thirty days before the date on which the owner is to begin receiving bids
or requests for proposals on the project.
F. An owner or principal contractor using a controlled
insurance plan shall distribute any project performance-based refunded premium
or dividend to each participating contractor and subcontractor on a
proportional basis if provided in the construction contract.
G. An owner or principal contractor shall
provide for a safety plan for an employee engaged in the construction project
when the employee is present at the construction project site. The owner or principal contractor of the
construction project shall develop and carry out a health and safety program
approved by the workers' compensation administration. The plan shall include a protocol that
encourages return to work guidelines pursuant to the Workers' Compensation Act.
H. The owner or principal contractor of a
construction project that uses a controlled insurance plan shall:
(1) establish a method for timely reporting of
job-related injuries to the employer, the insured and the administration;
(2) provide modifier experienced units statistical
rating information and any other statistical information required by the
superintendent of insurance for all contractors and subcontractors, including
losses and payroll, to the appropriate rating service within six months
following the end of the annual policy period;
(3) provide contractors or subcontractors or
their representatives with actual and specific payroll audit data generated
under the controlled insurance plan, as would be customarily provided to the
employer from a non-controlled insurance plan; and
(4) provide the same access to information on
injured employees as would customarily be available to the employer from a
non-controlled insurance plan.
I. In addition to any other penalties provided
under the law, a person found to have violated any requirement of this section
shall be subject to a penalty pursuant to Section 52-1-61 NMSA 1978."
Section 3. Section 52-5-4 NMSA 1978 (being Laws 1986,
Chapter 22, Section 30, as amended) is amended to read:
"52-5-4. AUTHORITY TO ADOPT RULES, REGULATIONS AND FEE
SCHEDULES.--
A. The director is authorized to adopt
reasonable rules and regulations, after notice and public hearing, for
effecting the purposes of the Workers' Compensation Act or the New Mexico
Occupational Disease Disablement Law.
All rules and regulations shall be published upon adoption and be made
available to the public and, if not inconsistent with law, shall be binding on
the administration of the Workers' Compensation Act or the New Mexico
Occupational Disease Disablement Law.
All rules and regulations adopted shall be filed in accordance with the
State Rules Act.
B. Such rules and regulations shall include
provisions for procedures in the nature of conferences or other techniques to
dispose of cases informally or to expedite claim adjudication, narrow issues
and simplify the methods of proof at hearings.
C. The director shall promulgate and enforce
schedules of reimbursement for such nonprofessional services as providing
testimony and depositions, the production of records or the completion of
medical capacity forms to health care providers as defined in Section 52-4-1
NMSA 1978 as he deems appropriate and necessary in the administration of the
Workers' Compensation Act or the New Mexico Occupational Disease Disablement
Law.
D. The director shall adopt rules for approval
and establishment of controlled insurance plans, including performance
standards compliance enforcement. In an
advisory role only to participate in the rulemaking process, the director shall
provide for the participation of:
(1) general contractors;
(2) subcontractors;
(3) organized labor;
(4) municipalities;
(5) counties; and
(6) business."
HBIC/HB 281
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