STATEMENT OF BASIS AND PURPOSE FOR
ADOPTION OF AMENDMENT OF RULE 7-2 OF
THE WORKERS’ COMPENSATION RULES OF
PROCEDURE, 7 C.C.R. 1101-3 BY ADDING A NEW SUBSECTION 3

Section 8-47-107, C.R.S. (1997) provides the Director of the Division of Workers’ Compensation with authority to adopt proper rules and regulations to govern proceedings and hearings of the Division, and the discretion to amend these rules from time to time.  Pursuant to section 8-47-101, the Director of the Division of Workers’ Compensation is charged with administering the workers’ compensation system.  

Section 8-43-204 sets out certain requirements for settling all or part of a workers’ compensation claim.  The settlement is to be reviewed with the injured worker, though an injured worker who has legal counsel is allowed to waive such review.   Statute requires that the settlement agreement be approved by an Administrative Law Judge or the Director.    

The rule amendment was a complete strike and replace of the previous Rule 7-2 language.  The purpose of this rule amendment is to set up a standardized process for settling workers’ compensation claims.  A uniform settlement agreement will be required, though the rule does recognize a distinction between an injured worker who is unrepresented from one that has the benefit of legal counsel.  Under the former rule settlement agreements were being presented for approval and some of these agreements contained terms and conditions which were outside the Workers’ Compensation Act.  Administrative Law Judges and the Director are not in a position to advise an injured worker about issues outside the Workers’ Compensation Act, nor is there any statutory authority to approve such terms and conditions.          

Pursuant to section 24-4-103(4)(b), C.R.S. (1999), the director also finds that:
(1) there is a demonstrated need for the rule amendment; (2) the proper statutory authority exists for this regulation; (3) to the extent practicable, the rule is clearly stated so that its meaning will be understood by any party required to comply with the regulation; (4) the rule does not conflict with other provisions of the law; and (5) the duplicating or overlapping of regulations is explained by the agency adopting the rule.

   Effective date of the rule change will be February 1, 2009.

Bob Summers						 December 4, 2008
Director						 DATE