(a) An insurer securing an employer’s liability under this division shall notify the employer, within 15 days, of each claim for indemnity filed against the employer directly with the insurer if the employer has not timely provided to the insurer a report of occupational injury or occupational illness pursuant to Section 6409.1. The insurer shall furnish an employer who has not filed this report with an opportunity to provide to the insurer, prior to the expiration of the 90-day period specified in Section 5402, all relevant information available to the employer concerning the claim.

(b) An employer shall promptly notify its insurer in writing at any time during the pendency of a claim when the employer has actual knowledge of any facts which would tend to disprove any aspect of the employee’s claim. When an employer notifies its insurer in writing that, in the employer’s opinion, no compensation is payable to an employee, at the employer’s written request, to the appeals board, the appeals board may approve a compromise and release agreement, or stipulation, that provides compensation to the employee only where there is proof of service upon the employer by the insurer, to the employer’s last known address, not less than 15 days prior to the appeals board action, of notice of the time and place of the hearing at which the compromise and release agreement or stipulation is to be approved. The insurer shall file proof of this service with the appeals board.

Failure by the insurer to provide the required notice shall not prohibit the board from approving a compromise and release agreement, or stipulation; however, the board shall order the insurer to pay reasonable expenses as provided in Section 5813.

(c) In establishing a reserve pursuant to a claim that affects premiums against an employer, an insurer shall provide the employer, upon request, a written report of the reserve amount established. The written report shall include, at a minimum, the following:

(1) Estimated medical-legal costs.

(2) Estimated vocational rehabilitation costs, if any.

(3) Itemization of all other estimated expenses to be paid from the reserve.

(d) When an employer properly provides notification to its insurer pursuant to subdivision (b), and the appeals board thereafter determines that no compensation is payable under this division, the insurer shall reimburse the employer for any premium paid solely due to the inclusion of the successfully challenged payments in the calculation of the employer’s experience modification. The employee shall not be required to refund the challenged payment.

(Amended by Stats. 1994, Ch. 1118, Sec. 5. Effective January 1, 1995.)