STATEMENT OF BASIS AND PURPOSE FOR
AMENDMENTS TO THE WORKERS’ COMPENSATION RULES OF PROCEDURE
7 CCR 1101-3

BASIS:  §8-47-107, C.R.S. provides the Director of the Division of Workers’ Compensation with authority to adopt and amend proper rules and regulations to govern the proceedings and hearings of the Division. In addition, 8-43-304(1.5)(a) provides that the Director shall promulgate rules with respect to an insurer’s repeated violations that are subject to this subsection of the law.

PURPOSE:  Replaced the previous rule with an updated rule that provides information to those responsible for adjusting claims to assist them in understanding the Division’s audit responsibilities, authority, methods and processes.

The rule amendments addressed the following subjects:

Rule 4   Carrier Compliance

The adopted rule specifically informs insurers of claims adjusting matters that are subject to audit and compliance levels that are considered satisfactory.  The rule also provides information concerning the circumstances under which the Director may order a fine for repeated violations, and criteria for determining the amount of any fine.

Pursuant to §24-4-103(4)(b), C.R.S., the Director finds that: 1) there is a demonstrated need for the rule amendments; 2) the proper statutory authority exists for this regulation; 3) to the extent practicable, the rules are clearly stated so that their meaning will be understood by any party required to comply with the regulation; 4) the rules do not conflict with other provisions of law; and 5) the duplicating or overlapping of the regulation is explained by the agency proposing the rules.

   Effective date of the rule change will be September 1, 2007. 

Bob Summers							6/27/2007
Bob Summers							Date
Director
Division of Workers’ Compensation