REGULATORY ANALYSIS
FOR AMENDMENTS TO RULE 2-5
OF THE WORKERS' COMPENSATION RULES OF PROCEDURE
7 CCR 1101-3

1.	Description of classes of persons who will be affected by the rules, including classes that will bear the costs of the rules and classes that will benefit from the rules.

The classes of persons affected by the rules are insurers and employers who failed to carry workers’ compensation coverage as required by law.

2.	Description of the probable quantitative and qualitative impact of the proposed rule, economic or otherwise, upon the classes of affected persons.

The adopted rule updates regulations concerning the reporting of insurance policies and penalties for failure to carry insurance.  The adopted rules will streamline the investigation process by requiring accurate and timely filings when insurance policies are issued or cancelled.

3.	Probable costs to the agency and other agencies of the implementation and enforcement of the proposed rules and any anticipated effect on state revenues.

Impact will be minimal; however, it is anticipated that the requirements for accurate and timely reporting of policy information will improve efficiency of the investigations conducted by the agency.  This efficiency will be realized as increased capacity for investigations rather than as a cost savings.  

4.	Comparison of the probable costs and benefits of enacting the proposed rules to the probable costs and benefits of inaction. 

The adopted rule requires insurers to report specific information to the Division and allows for the imposition of penalties against insurers who fail to do so.  The new reporting requirements will impose insignificant costs upon insurers.  The reports are currently required and the rule amendments merely require some additional detail.  Insurers who fail to comply will face penalties; however, the Division will prioritize education over penalties.  Failure to enact the adopted rules would continue the status quo, in which erroneous information submit by insurers requires labor intensive investigations.      

5.	Determination of whether there are less costly or less intrusive methods for achieving the purpose of the proposed rules.

There are no known less costly or less intrusive means.   

6.	Description of any alternative methods for achieving the purpose of the proposed rules that were seriously considered by the agency.

Given the nature of these rules, no other alternative methods were considered.  The adopted rules were developed with significant stakeholder input.