46th legislature - STATE OF NEW MEXICO - first session, 2003

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:

(1) for a fixed term of coverage;

(2) for a single construction project, including all related activities on the construction site and travel to and from the construction site;

(3) established and administered by either the owner or the principal contractor of a construction project; and

(4) coverage for the employees of the contractors and subcontractors who are engaged in a construction project;

[A.] B. "director" means the director of the workers' compensation administration;

[B.] C. "division" means the workers' compensation administration;

[C.] D. "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;

[D.] E. "workman" or "workmen" means worker or workers;

[E.] F. "Workmen's Compensation Act" means the Workers' Compensation Act; and

[F.] G. "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:

"[NEW MATERIAL] CONTROLLED INSURANCE PLAN--PENALTY.--

A. An owner or the principal contractor of a construction project may establish and administer a controlled insurance plan for a construction project that has an estimated cost equal to or greater than three hundred million dollars ($300,000,000). As used in this section, "estimated cost" 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. The owner shall include in requests for proposals for bids a notice that participation in a controlled insurance plan is a condition of the bid and shall provide a copy of the terms and conditions of the controlled insurance plan. The terms and conditions shall include a statement of contractor's or subcontractor's duty regarding costs.

C. The owner shall not extend a controlled insurance plan beyond a single construction site or term of the construction project. A controlled insurance plan shall be job-specific.

D. A contractor or subcontractor may retain separate insurance coverage without consequence if the net rate is lower than the composite rate under the controlled insurance plan. The controlled insurance plan shall:

(1) cover the entire job, including activities at the site of the construction project and transportation of materials to and from the site of the project; and

(2) provide for resolving disputed issues, including repayment of the responsible party, by resolution before the worker's compensation administration.

E. An owner or principal contractor who enters into a contract for a controlled insurance plan shall file a copy of the contract with the insurance division of the public regulation commission at least thirty days before the date on which the bid advertisement is scheduled to begin. The terms and conditions shall include a statement of contractor's or subcontractor's duty regarding costs. The insurance division shall review and approve or reject the contract within thirty days after receiving a copy of a contract. If the insurance division does not reject the contract within thirty days after receiving it, the contract shall be deemed approved.

F. An excess premium from a retrospectively rated or dividend policy from the controlled insurance plan shall be returned on a proportional basis to each contractor and subcontractor who participated in the controlled insurance plan.

G. An owner or principal contractor shall provide for the safety of an employee engaged in the construction project when the employee works at the site of the construction project. The owner or principal contractor of the construction project shall develop and carry out a health and safety program approved by the insurance division of the public regulation commission. 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) provide a contractor or subcontractor the same information on an employee's work-related injury under the controlled insurance plan as is required under the contractor's or subcontractor's other insurance coverage;

(2) provide experienced units statistical rating information and any other statistical information required by the insurance division of the public regulation commission for all contractors and subcontractors, including losses and payroll, to the appropriate rating service within thirty days of a policy period for a controlled insurance plan; and

(3) provide a contractor or subcontractor with the same rights of payroll audit access and access to information on injured employees in the same manner as employees of a non-controlled insurance plan project.

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 fine of not less than five thousand dollars ($5,000) and not more than ten thousand dollars ($10,000) for each occurrence."

Section 3. Section 59A-2-8 NMSA 1978 (being Laws 1984, Chapter 127, Section 26) is amended to read:

"59A-2-8. GENERAL POWERS, DUTIES OF SUPERINTENDENT.--The superintendent shall:

A. organize and manage the insurance [department] division and direct and supervise all its activities;

B. execute the duties imposed upon him by the Insurance Code;

C. enforce those provisions of the Insurance Code [which] that are administered by him;

D. have the powers and authority expressly conferred by or reasonably implied from the provisions of the Insurance Code;

E. conduct such examinations and investigations of insurance matters, in addition to those expressly authorized, as he may deem proper upon reasonable and probable cause to determine whether any person has violated any provision of the Insurance Code or to secure information useful in the lawful enforcement or administration of any such provision; [and]

F. have such additional powers and duties as may be provided by other laws of this state; and

G. adopt rules for approval and establishment of controlled insurance plans, including performance standards compliance enforcement."