Bill > SB5463

This bill modifies the regulations surrounding industrial insurance self-insured employers and third-party administrators, strengthening the requirements for good faith and fair dealing in workers' compensation claims. Under the new provisions, if a self-insurer commits two or more violations of good faith and fair dealing within a three-year period, the state department must impose corrective actions, including a probationary period with specific restrictions and mandatory compliance audits. If the self-insurer commits subsequent violations while under corrective action or receives multiple corrective actions within a 10-year period, the department can withdraw the employer's self-insurance certification. The bill clarifies that minor or inadvertent errors are not considered violations, and the new rules apply to all claims regardless of injury date. The legislation aims to protect workers by ensuring that self-insured employers and their administrators treat workers fairly and provide appropriate compensation, with potential penalties ranging from one to 52 times the average weekly wage depending on the severity of the violation. The new regulations will take effect on January 1, 2026, providing self-insurers time to adjust to the updated requirements.