Source: http://www.wvlegislature.gov/WVCODe/ChapterEntire.cfm?chap=23&art=2C
Timestamp: 2018-11-12 23:30:50
Document Index: 383544118

Matched Legal Cases: ['§23', '§23', '§23', '§23', '§23', '§23', '§19', '§23', '§23', '§23', '§23', '§23', '§23', '§23', '§23', '§23', '§23', '§23', '§23', '§23', '§23', '§23']

WV Code Chapter 23 Article 2C
§23-2C-1. Findings and purpose.
(1) There is a long-term actuarial funding crisis in the state-run monopolistic workers' compensation system;
(2) Similar short-term and long-term crises have been ongoing during the past two decades;
(3) During the current crisis, employers in West Virginia find it increasingly difficult to afford the rates charged by the Workers' Compensation Commission for workers' compensation coverage and that paying said rates adversely impacts employers' ability to compete in a global economic environment;
(4) The cost of obtaining workers' compensation coverage from the state system may result in many employers leaving the state;
(5) Employers' access to competitive workers' compensation rates and the resulting economic development benefit is of utmost importance to the citizens of West Virginia;
(6) A mechanism is needed to provide an enduring solution to this recurring workers' compensation crisis;
(7) An employers' mutual insurance company or a similar entity has proven to be a successful mechanism in other states for helping employers secure insurance and for stabilizing the insurance market;
(8) There is a substantial public interest in creating a method to provide a stable workers' compensation insurance market in this state;
(9) The state-run workers' compensation program is a substantial actual and potential liability to the state;
(10) There is substantial public benefit in transferring certain actual and potential future liability of the state to the private sector and creating a stable self-sufficient entity which will be a potential source of workers' compensation coverage for employers in this state;
(11) A stable, financially viable insurer in the private sector will aid in providing a continuing source of insurance funds to compensate injured workers; and
(12) Because the public will greatly benefit from the formation of an employers' mutual insurance company, state efforts to encourage and support the formation of such an entity, including providing funding for the entity's initial capital, is in the clear public interest.
(b) The purpose of this article is to create a mechanism for the formation of an employers' mutual insurance company that will provide:
(1) A means for employers to obtain workers' compensation insurance that is reasonably available and affordable; and
(2) Compensation to employees of mutual policyholders who suffer work place injuries as defined in this chapter.
(c) The further purpose of this article is to transfer New Fund assets relating to the workers' compensation insurance business to the company, including a reasonable level of policyholder surplus, and for the company to assume the New Fund liabilities related to the transferred assets. It is the intent of this article to provide for the initial capitalization of the company to comply with and to meet the requirements of section 351 and related sections of the Internal Revenue Code.
§23-2C-2. Definitions.
(a) "Executive director" means the Executive Director of the West Virginia Workers' Compensation Commission as provided in section one-b, article one of this chapter.
(b) "Commission" means the West Virginia Workers' Compensation Commission as provided by section one, article one of this chapter.
(c) "Insurance Commissioner" means the Insurance Commissioner of West Virginia as provided in section one, article two, chapter thirty-three of this code.
(d) "Company" or "successor to the commission" means the employers' mutual insurance company created pursuant to the terms of this article.
(e) "Policy default" means a policyholder that has failed to comply with the terms of its workers' compensation insurance policy and is consequently without workers' compensation insurance coverage.
(f) "Workers' compensation insurance" means insurance which provides all compensation and benefits required by this chapter.
(g) "Insurer" includes:
(1) A self-insured employer; and
(2) A private carrier.
(h) "Industrial Council" means the advisory group established in section five of this article.
(i) "Mutualization Transition Fund" is a fund over which the state Treasurer is custodian. Moneys transferred or otherwise payable to the Mutualization Transition Fund shall be deposited in the state Treasury to the credit of the Mutualization Transition Fund. Disbursements shall be made from the Mutualization Transition Fund upon requisitions signed by the executive director, and, upon termination of the commission, the Insurance Commissioner, and shall be reasonably related to the legal, operational, consultative and human resource-related expenses associated with the establishment of the company and the transferring of personnel from the commission to the company.
(j) "New Fund" means a fund owned and operated by the commission and, upon termination of the commission, the successor organization of the West Virginia Workers' Compensation Commission and consists of those funds transferred to it from the Workers' Compensation Fund and any other applicable funds. New Fund includes all moneys due and payable to the Workers' Compensation Fund for the quarters ending September 30, 2005, and December 31, 2005, which have not been collected by the Workers' Compensation Fund as of December 31, 2005.
(k) "New Fund liabilities" means all claims payment obligations (indemnity and medical expenses) for all claims, actual and incurred but not reported, for any claim with a date of injury or last exposure on or after July 1, 2005: Provided, That New Fund liabilities begin with claims payments becoming due and owing on said claims on or after January 1, 2006.
(l) "Old Fund" means a fund held by the state Treasurer's office consisting of those funds transferred to it from the Workers' Compensation Fund or other sources and those funds due and owing the Workers' Compensation Fund as of June 30, 2005, that are thereafter collected. The Old Fund and assets in the fund remain property of the state and do not novate or otherwise transfer to the company.
(m) "Old Fund liabilities" mean all claims payment obligations (indemnity and medical expenses), related liabilities and appropriate administrative expenses necessary for the administration of all claims, actual and incurred but not reported, for any claim with a date of injury or last exposure on or before June 30, 2005: Provided, That Old Fund liabilities include all claims payments for any claim, regardless of date of injury or last exposure, through December 31, 2005: Provided, however, That Old Fund liabilities include all claims with dates of injuries or last exposure prior to July 1, 2004, for bankrupt self-insured employers that had defaulted on their claims obligations which have been recognized by the commission in its actuarially determined liability number as of June 30, 2005.
(n) "Private carrier" means any insurer or the legal representative of an insurer authorized by the Insurance Commissioner to provide workers' compensation insurance pursuant to this chapter. The term does not include a self-insured employer or private employers but does include any successor to the commission.
(o) "Uninsured Employer Fund" means a fund held by the state Treasurer's office consisting of those funds transferred to it from the Workers' Compensation Fund and any other source. Disbursements from the Uninsured Employer Fund shall be upon requisitions signed by the Insurance Commissioner, and as otherwise set forth in an exempt legislative rule promulgated by the Workers' Compensation Board of Managers.
(p) "Self-Insured Employer Guaranty Risk Pool" is a fund held by the state Treasurer's office consisting of those funds transferred to it from the guaranty pool created pursuant to 85 CSR 19 (2007) and any future funds collected through continued administration of that exempt legislative rule as administered by the Insurance Commissioner. Disbursements shall be made from the Self-Insured Employer Guaranty Risk Pool upon requisitions signed by the Insurance Commissioner. The obligations of the fund are as provided in 85 CSR 19 (2007).
(q) "Self-Insured Employer Security Risk Pool" is a fund held by the state Treasurer consisting of those funds paid into it through the Insurance Commissioner's administration of 85 CSR 19 (2007). Disbursement from the fund shall be made from the Self-Insured Employer Security Risk Pool upon requisitions signed by the Insurance Commissioner. The obligations of the fund are as provided in 85 CSR 19: Provided, That the liabilities are limited to those self-insured employers who default on their claims obligations after the termination of the commission.
(r) "Private Carrier Guaranty Fund" is a fund held by the state Treasurer's office consisting of funds deposited pursuant to this article. Disbursements shall be made from the Private Carrier Guaranty Fund upon requisitions signed by the Insurance Commissioner. The obligations of the fund are as provided in this article. The Private Carrier Guaranty Fund terminates on June 30, 2008, and any moneys remaining in the fund on the date of its termination shall be transferred to the Old Fund.
(s) "Assigned Risk Fund" is a fund held by the state Treasurer's office consisting of funds deposited pursuant to this article. Disbursements shall be made from the Assigned Risk Fund upon requisitions signed by the Insurance Commissioner. The obligations of the fund are as provided in this article. The Assigned Risk Fund terminates on June 30, 2008, and any moneys remaining in the fund on the date of its termination shall be transferred to the Old Fund.
(t) "Comprehensive financial plan" means the plan compiled by the director for acceptance by the Insurance Commissioner identifying and forecasting cash flows, funding sources, debt terms and structures and scheduled amortization and permanent resolution of all Old Fund liabilities. The comprehensive financial plan shall provide for the retirement of the revenue bonds authorized by article two-d of this chapter and all realized and potential claims against the Old Fund shall be fully reserved. The comprehensive financial plan may include any other information the Insurance Commissioner may require as a basis for managing the post-transition fiscal soundness of the Old Fund.
(u) "Voluntary market" means the workers' compensation insurance market in which insurers voluntarily offer coverage to applicants who meet the insurers' underwriting standards or guidelines.
(B) By May 1 each year, the self-insured employer community shall be assessed a cumulative total of $9 million. The methodology for the assessment shall be fair and equitable and determined by exempt legislative rule issued by the Industrial Council. The amount collected pursuant to this subdivision shall be remitted to the Insurance Commissioner for deposit in the Workers’ Compensation Debt Reduction Fund created in section five, article two-d of this chapter: Provided, That, notwithstanding any provision of this subdivision or any other provision of this code to the contrary, if the budget shortfall, as determined by the state Budget Office as of December 1, 2015, is greater than $100 million, then the Governor may, by Executive Order, redirect deposits of the amount collected pursuant to this subdivision, for any period commencing after February 29, 2016, and ending before July 1, 2016, to the General Revenue Fund, instead of to the fund otherwise mandated in this subdivision, in article two-d, chapter twenty-three of this code or in any other provision of this code: Provided, however, That, notwithstanding any provision of this subdivision or any other provision of this code to the contrary, the Governor may, by Executive Order, redirect one-half of the deposits of the amount collected pursuant to this subdivision, for any period commencing after June 30, 2016, and ending before July 1, 2017, to the General Revenue Fund, instead of to the funds otherwise mandated in this subdivision, in article two-d, chapter twenty-three of this code or in any other provision of this code, until certification of the Governor to the Legislature that an independent actuary has determined that the unfunded liability of the Old Fund, as defined in chapter twenty-three of this code, has been paid or provided for in its entirety: Provided further, That, notwithstanding any provision of this subdivision or any other provision of this code to the contrary, the Governor may, by Executive Order, redirect seventy-five percent of the deposits of the amount collected pursuant to this subdivision, for any period commencing after June 30, 2017, and ending before July 1, 2018, to the General Revenue Fund, instead of to the funds otherwise mandated in this subdivision, in article two-d, chapter twenty-three of this code or in any other provision of this code, until certification of the Governor to the Legislature that an independent actuary has determined that the unfunded liability of the Old Fund, as defined in chapter twenty-three of this code, has been paid or provided for in its entirety.
§23-2C-3a. Employers' mutual insurance company - additional provisions enacted in November 2005.
(a) Notwithstanding any other provisions of this article to the contrary, the employers' mutual insurance company:
(1) May not be dissolved.
(2) May not transact such other kinds of property and casualty insurance for which the company is otherwise qualified under the provisions of this code prior to January 1, 2009.
(b) As soon as practical following the effective date of this section, the company established pursuant to the provisions of this article shall, through a vote of a majority of its provisional board, file its amended articles of incorporation and amended bylaws with the Insurance Commissioner and apply for a license with the Insurance Commissioner to transact insurance in this state. Notwithstanding any other provision of this code, the Insurance Commissioner shall act on the documents within fifteen days of the filing by the company.
(c) Notwithstanding any provision of subsection (g), section three of this article to the contrary, in the event the Governor certifies to the Legislature that revenue bonds issued pursuant to article two-d of this chapter have been retired and that the unfunded liability of the Old Fund has been paid or has been provided for in its entirety, whichever occurs last, then:
(1) The premiums surcharge imposed by subdivision (2), subsection (f), section three of this article shall not sunset and shall continue to be remitted in accordance with the provisions of said subsection; and
(2) The premiums surcharge imposed by subdivision (3), subsection (f), section three of this article shall sunset and not be collectible with respect to workers' compensation insurance premiums paid when the policy is renewed on or after the first day of the month following the month in which the Governor makes the certification.
(d) Except as may otherwise be provided in this subsection, all provisions of section three of this article shall remain in full force and effect.
§23-2C-4. Governance and organization.
(a) (1) The commission shall implement the initial formation and organization of the company as provided by this article.
(2) From the inception of the company, until January 1, 2006, the company shall be governed by a provisional board of directors consisting of the three persons on the executive committee of the workers' compensation board of managers and four members of the Legislature. Two members of the West Virginia Senate and two members of the West Virginia House of Delegates shall serve as advisory nonvoting members of the board. The Governor shall appoint the legislative members to the board. No more than three of the legislative members shall be of the same political party. The provisional board shall have the authority to function as necessary to establish the company and cause it to become operational, including the right to contract on behalf of the company. Each voting board member shall receive compensation of not more than $350 per day and actual and necessary expenses for each day during which he or she is required to and does attend a meeting of the board.
(3) Except as limited by this section and applicable insurance rules and statutes, the company may: (1) On its own; (2) through the formation or acquisition of subsidiaries; or (3) through a joint enterprise, offer:
(A) Workers' compensation insurance in a state other than West Virginia to the extent it also provides workers' compensation or occupational disease insurance coverage to the employer pursuant to this chapter;
(B) Other workers' compensation products and services and related products and services in West Virginia or other states; and
(C) Other property and casualty insurance in West Virginia and other states on or after January 1, 2009.
(b) Any election process for the board of directors developed, implemented and overseen by the company's provisional board prior to the effective date of the amendments to this section enacted during the fifth extraordinary session of the Legislature in 2005 is nullified and the designation of the company's initial board of directors shall be governed by the following: Effective January 1, 2006, the company shall be governed by a board of directors consisting of seven directors, as follows:
(1) Three owners or officers of an entity that has purchased or will immediately upon termination of the commission purchase and maintain an active workers' compensation insurance policy from the company. At least one shall be a certified public accountant with financial management or pension or insurance audit expertise and at least one shall be an attorney with financial management experience. These three directors shall be appointed by the Governor.
(2) Two directors who have substantial experience as an officer or employee of a company in the insurance industry, one of whom is from a company with less than fifty employees. These two directors shall be appointed by the Governor.
(3) One director with general knowledge and experience in business management who is an officer and employee of the company and is responsible for the daily management of the company.
(4) The chief executive officer of the company.
(c) The initial board of directors appointed by the Governor shall serve from the termination of the commission through December 31, 2008, and may be not removed from that position except for cause.
(d) Any board vacancy that occurs from the termination of the commission through December 31, 2008, shall be filled through appointment by the Governor for the unexpired term.
(e) Upon expiration of the initial terms or upon a vacancy of the board following December 31, 2008, the directors of the company are to be chosen in accordance with the articles of incorporation and bylaws of the company, as amended, which shall provide for the policyholders to nominate and elect future directors. Furthermore, owners, directors or employees of employers otherwise licensed to write workers' compensation insurance in this state or licensed or otherwise authorized to act as a third-party administrator shall not be eligible to be nominated, appointed, elected or serve on the company's board of directors.
(f) The Executive Director shall prepare and file amended articles of incorporation and bylaws in accordance with the provisions of this article and the provisions of chapters thirty-one and thirty-three of this code.
(g) It is the intent of this legislation to create an entity exempt from federal taxation, as provided for in Section 501(c)(27)(B) of the Internal Revenue Code, for as long as the company meets the federal qualification requirements of Section 501(c)(27)(B) of the Internal Revenue Code.
§23-2C-5. Creation of the industrial council; duties.
(a) There is hereby created within the office of the Insurance Commissioner an industrial council.
(b) On or before July 1, 2005, the Governor with the advice and consent of the Senate, shall appoint five voting members to the industrial council who meet the requirements and qualifications prescribed in this subsection. Two members of the West Virginia Senate and two members of the West Virginia House of Delegates shall serve as advisory nonvoting members of the board. The Governor shall appoint the legislative members to the board. No more than three of the legislative members may be of the same political party. The Insurance Commissioner shall serve as an advisory nonvoting member of the board.
(1) (A) Five members shall be appointed by the Governor with the advice and consent of the Senate for terms that begin upon appointment after the effective date of this legislation and expire as follows:
(i) One member shall be appointed for a term ending June 30, 2007;
(ii) Two members shall be appointed for a term ending June 30, 2008; and
(iii) Two members shall be appointed for a term ending June 30, 2009.
(B) Except for appointments to fill vacancies, each subsequent appointment shall be for a term ending June 30 of the fourth year following the year the preceding term expired. In the event a vacancy occurs, it shall be filled by appointment for the unexpired term. A member whose term has expired shall continue in office until a successor has been duly appointed and qualified. No member of the council may be removed from office by the Governor except for official misconduct, incompetency, neglect of duty or gross immorality.
(C) No appointed member may be a candidate for or hold elected office. Members may be reappointed for no more than two full terms.
(2) Each of the appointed voting members of the council shall be appointed based upon his or her demonstrated knowledge and experience to effectively accomplish the purposes of this chapter. They shall meet the minimum qualifications as follows:
(A) Each shall hold a baccalaureate degree from an accredited college or university: Provided, That no more than one of the appointed voting members may serve without a baccalaureate degree from an accredited college or university if the member has a minimum of fifteen years' experience in his or her field of expertise as required in this subdivision;
(B) Each shall have a minimum of ten years' experience in his or her field of expertise. The Governor shall consider the following guidelines when determining whether potential candidates meet the qualifications of this subsection: Expertise in insurance claims management; expertise in insurance underwriting; expertise in the financial management of pensions or insurance plans; expertise as a trustee of pension or trust funds of more than two hundred beneficiaries or $300 million; expertise in workers' compensation management; expertise in loss prevention and rehabilitation; expertise in occupational medicine demonstrated by licensure as a medical doctor in West Virginia and experience, board certification or university affiliation; or expertise in similar areas of endeavor;
(C) At least one shall be a certified public accountant with financial management or pension or insurance audit expertise; at least one shall be an attorney with financial management experience; one shall be an academician holding an advanced degree from an accredited college or university in business, finance, insurance or economics; and one shall represent organized labor.
(D) The council shall appoint one member to serve as chairperson. The chairperson shall serve for a one-year term and may serve more than one consecutive term. The council shall hold meetings at the request of the chairperson or at the request of at least three of the members of the council, but no less frequently than once every three months. The chairperson shall determine the date and time of each meeting. Three members of the council constitute a quorum for the conduct of the business of the council. No vacancy in the membership of the council shall impair the right of a quorum to exercise all the rights and perform all the duties of the council. No action shall be taken by the council except upon the affirmative vote of three members of the council.
(3) (A) Each voting appointed member of the council shall receive compensation of not more than $350 per day for each day during which he or she is required to and does attend a meeting of the board.
(B) Each voting appointed member of the council is entitled to be reimbursed for actual and necessary expenses incurred for each day or portion thereof engaged in the discharge of official duties in a manner consistent with guidelines of the travel management office of the Department of Administration.
(C) Each member of the council shall be provided appropriate liability insurance, including, but not limited to, errors and omissions coverage, without additional premium, by the state Board of Risk and Insurance Management established pursuant to article twelve, chapter twenty-nine of this code.
(c) The industrial council shall:
(1) In consultation with the Insurance Commissioner, establish operating guidelines and policies designed to ensure the effective administration of the workers' compensation insurance market in West Virginia.
(2) Review and approve, reject or modify rules that are proposed by the Insurance Commissioner for operation and regulation of the workers' compensation insurance market before the rules are filed with the Secretary of State. The rules adopted by the industrial council are not subject to sections nine through sixteen, inclusive, article three, chapter twenty-nine-a of this code. The industrial council shall follow the remaining provisions of said chapter for giving notice to the public of its actions and for holding hearings and receiving public comments on the rules.
(3) In accordance with the laws and rules of West Virginia, establish and monitor performance standards and measurements to ensure the timeliness and accuracy of activities performed under chapter twenty-three of this code and applicable rules.
(4) Submit for approval by the Legislature, as an isolated and clearly discernable component of the Insurance Commissioner's budget, a budget for the sufficient administrative resources and funding requirements necessary for their duties under this article.
(5) Perform all record and information gathering functions necessary to carry out its duties under this code.
(6) Every two years, conduct an overview of the safety initiatives currently being utilized or which could be utilized in the workers' compensation insurance market and report said finding to the Joint Committee on Government and Finance. Each private carrier and self-insured employer shall cooperate with the council in the performance of its duties to evaluate insurer services provided to employers in controlling losses and providing information on the prevention of industrial accidents or occupational diseases. Each employer, private carrier and self-insured employer shall provide to the council, upon request, any information, statistics or data in its records requested by the council in the performance of these duties.
(7) Perform all other duties as specifically provided in this chapter for the industrial council and those duties incidental thereto.
(8) Establish a method of indexing claims of injured workers that will make information concerning the injured workers of one insurer available to other insurers.
(A) Every insurer shall provide information, as required by the industrial council, for establishing and maintaining the claims index.
(B) If an employee files a claim with an insurer, the insurer is entitled to receive from the administrator a list of the prior claims of the employee. If the insurer desires to inspect the files related to the prior claims, he or she must obtain the written consent of the employee or the Insurance Commissioner or his or her designee. The use of the information contained in the files is limited to the administration of the claim.
§23-2C-6. Creation of new fund, old fund, mutualization transition fund, uninsured employer fund, self-insured employer guaranty risk pool, self-insured employer security risk pool, private carrier guaranty fund, and assigned risk fund.
(a) Effective upon the date upon which this enactment is made effective by the Legislature, there is hereby created in the state Treasury a "Workers' Compensation Old Fund", "Workers' Compensation New Fund", "Mutualization Transition Fund", "Workers' Compensation Uninsured Employers' Fund", "Self-insured Employer Guaranty Risk Pool", "Self-insured Employer Security Risk Pool", "Private Carrier Guaranty Fund" and an "Assigned Risk Fund". The Executive Director of the Workers' Compensation Commission shall have full authority to administer the old fund, the new fund, the mutualization transition fund, the uninsured employers' fund, the self-insured employer guaranty risk pool, the self-insured employer security risk pool and the private carrier guaranty fund until termination of the commission. As soon as practicable upon the establishment of the mutualization transition fund, the executive director shall cause $35 million to be transferred from the Workers' Compensation Fund into the mutualization transition fund. All unencumbered funds remaining in the mutualization transition fund as of termination of the commission shall be transferred into the private carrier guaranty fund or, if the proclamation set forth in this article has not been issued, back to the Workers' Compensation Fund. Expenditures from the funds established by this section shall be upon appropriation of the Legislature except that during the fiscal year ending June 30, 2005, expenditures from the mutualization transition fund up to amounts expended for the purposes of this article are authorized rather than pursuant to an appropriation by the Legislature.
(b) If the proclamation set forth in this article is issued, then upon termination of the commission, the funds contained in the Workers' Compensation Fund shall be disbursed as follows: (1) A minimum of $300 million into the Workers' Compensation Old Fund, the exact amount of which shall be set forth in the Governor's proclamation provided in this article; (2) $5 million into the uninsured employers' fund; and (3) the remainder into the new fund. Additionally, the funds contained in the guaranty pool provided in 85 CSR §19 (2004) shall be transferred into the self-insured employer guaranty risk pool created in this article.
§23-2C-7. Custody, investment and disbursement of funds.
(a) The State Treasurer shall be the custodian of the workers' compensation Old Fund, workers' compensation Uninsured Employer Fund, the Self-Insured Employer Guaranty Risk Pool, the Self-Insured Employer Security Risk Pool, the Private Carrier Guaranty Fund and the Assigned Risk Fund and moneys payable to each of these funds shall be deposited in the state Treasury to the credit of the funds. Each fund shall be a separate and distinct fund upon the books and records of the Auditor and Treasurer. Disbursements from these funds shall be made upon requisitions signed by the executive director and, effective upon termination of the commission, the Insurance Commissioner. The workers' compensation Old Fund, the workers' compensation Uninsured Employer Fund, the Self-Insured Employer Guaranty Risk Pool, Self-Insured Employer Security Risk Pool, the Private Carrier Guaranty Fund and the Assigned Risk Fund are participant plans as defined in section two, article six, chapter twelve of this code and are subject to the provisions of section nine-a of said article. The funds may be invested by the Investment Management Board in accordance with said article.
(b) If the Governor issues the proclamation set forth in this article, then, effective upon termination of the commission, all remaining assets and funds contained in the Workers' Compensation Fund which are payable to the New Fund shall be so disbursed and paid to the company by communication of the executive director to the state Treasurer or other appropriate state official prior to the termination of the commission.
(2) The State Treasurer may disburse money from the fund only upon written requisition of the Insurance Commissioner.(3) Assessments. -- The Insurance Commissioner shall assess each private carrier and may assess self-insured employers an amount to be deposited in the fund. The assessment may be collected by each private carrier from its policyholders in the form of a policy surcharge. To establish the amount of the assessment, the Insurance Commissioner shall determine the amount of money necessary to maintain an appropriate balance in the fund for each fiscal year and shall allocate a portion of that amount to be payable by each of the groups subject to the assessment. After allocating the amounts payable by each group, the Insurance Commissioner shall apply an assessment rate to:
(c) Initial determination upon receipt of a claim. --
If a claim is filed against the Uninsured Employer Fund, the Insurance Commissioner or his or her third-party administrator shall: (1) Accept the claim into the fund if it is determined that the employer was required to maintain workers' compensation coverage with respect to the injured worker but failed to do so; (2) reject the claim if it is determined that the employer maintained such coverage or was not required to do so; or (3) in a claim involving the availability of benefits pursuant to section one-d, article two of this chapter, either reject or conditionally accept the claim. An aggrieved party may file a protest with the Office of Judges to any decision by the Insurance Commissioner or the third-party administrator to accept or reject a claim into the fund, as well as to any claims decisions made with respect to any claim accepted into the fund and such protests shall be determined in the same manner as disputed claims are determined pursuant to the provisions of article five of this chapter: Provided, That in any proceeding before the Office of Judges involving the decision to accept or refuse to accept a claim into the fund, the employer has the burden of proving that it either provided mandatory workers' compensation insurance coverage or that it was not required to do so.
§23-2C-9.
Acts, 2008 Reg. Sess., Ch. 120.
§23-2C-10. West Virginia adverse risk assignment.
(a) The Insurance Commissioner shall provide for the development and administration of an assigned risk plan to provide workers' compensation insurance coverage to employers who are unable to procure coverage in the voluntary market.
(b) To qualify for coverage under the plan, an employer must have been categorically declined coverage by at least two insurers that are not affiliated with each other. The employer has the burden of establishing that at least two unaffiliated insurers are unwilling to provide coverage at any premium level that is reasonably related to the risk presented by the employer. The assigned risk plan may also provide for other reasonable qualifications and for the termination of coverage under the plan for specified reasons.
(c) Any employer that satisfies the requirements of subsection (b) of this section and other qualifications established in the plan shall be provided coverage at a premium level to be determined or approved by the Insurance Commissioner, which premiums shall be actuarially sound, consistent with classification and rate-making methodologies found in the insurance industry, and calculated to enable the plan to be self-sustaining and, to the greatest extent possible, able to operate without subsidies from employers and insurers in the voluntary market. Rates may not be excessive, inadequate or unfairly discriminatory.
(d) The Insurance Commissioner may designate any third party, including any private carrier or rating organization with substantial experience in developing and administering similar programs in other states, to develop and administer the assigned risk plan for a period of three years, and thereafter, shall contract with any qualified party, including the then current administrator, to continue the administration of the assigned risk plan: Provided, That the Insurance Commissioner must approve the plan prior to the plan becoming operative. The plan established pursuant to this section shall require that all private carriers participate as a condition of their authority to transact business in this state.
(e) In the event the plan incurs a deficit in one or more policy years, the Insurance Commissioner may assess all private carriers providing workers' compensation insurance in voluntary market funds as are necessary to cover the deficits. The assessments shall result in an equitable distribution of costs among private carriers based upon premiums received by the private carriers in the private market. Assessments made upon the policies of each private carrier pursuant to this section may be collected by each carrier in the form of a surcharge.
§23-2C-11. Transfer of assets from new fund to the mutual insurance company established as a successor to the commission; transfer of commission employees.
(a) If the Governor determines that:
(1) The old fund assets are sufficient to satisfy the old fund liabilities or that a revenue source has been secured to satisfy the old fund liabilities as they occur from time to time;
(2) The executive director has established a mutual insurance company pursuant to this code;
(3) The comprehensive financial plan has been accepted by the Insurance Commissioner; and
(4) The Commissioner of Insurance has determined that the mutual insurance company established by the executive director qualifies:
(A) For a certificate of authority to transact Workers' Compensation insurance in this state; and
(B) For the authority to issue nonassessable policies of insurance pursuant to this code, the Governor shall issue a proclamation stating that the events described in subdivisions (1) through (4), inclusive, of this subsection have occurred, along with the exact amount of funds to be transferred from the Workers' Compensation Fund to the old fund. The Governor shall establish the effective date of the termination of the commission in the proclamation.
(b) If the Governor issues said proclamation:
The executive director shall cause the transfer to the mutual insurance company established pursuant this code the premiums and other money paid or payable, transferred or transferable from the Workers' Compensation Fund into the new fund, old fund, and any other applicable fund. The Investment Management Board, State Treasurer and any other agency or board shall fully cooperate in the transfer of the new fund assets.
(c) Upon the issuance of the proclamation set forth in subsection (a) of this section, all commission employees assigned regulatory duties shall transfer, along with the assets necessary to support the functions being performed, from the Commission to the Insurance Commissioner: Provided, That the executive director shall, in consultation with the Insurance Commissioner, have sole authority to identify and select the employees that are employed by the Commission to be assigned and transferred to the Insurance Commission. For purposes of this section, regulatory duties shall include, but may not be limited to, self-insurance, rating services, office of judges and board of review.
(d) The Division of Personnel shall cooperate fully by assisting in all personnel activities necessary to expedite all changes for the commission and the Insurance Commissioner. Due to the emergency currently existing at the commission and the urgent need to develop fast, efficient claims processing, management and administration, the Insurance Commissioner is hereby granted authority to reorganize internal functions and operations and to delegate, assign, transfer, combine, establish, eliminate and consolidate responsibilities and duties to and among the positions transferred under the authority of this subsection. These actions shall not be subject to the grievance process. The provisions of this subsection are not effective after December 31, 2006.
§23-2C-12. Certain personnel provisions governing employees laid-off by the mutual during its initial year of operation.
(a) If a mutual insurance company is established pursuant to this article, a person who:
(1) Is employed on January 1, 2005, by the commission;
(2) Was employed by the commission upon its termination; and
(3) Is laid off by the company on or before June 30, 2008, is entitled to be placed on an appropriate reemployment list maintained by the Department of Personnel and to be allowed a preference on that list. The Department of Personnel shall maintain such an employee on the reemployment list indefinitely, or until the employee has declined three offers of employment at a paygrade substantially similar to that of his or her position upon termination of the commission, or until he or she is reemployed by the executive branch of state government, whichever occurs earlier.
(b) The executive director may select former bureau of employment program employees who are, upon the termination of the commission, employees of the office of information services and communication and who enter into an employment contract with the company before December 1, 2005, to become employees of the company and said employees shall be afforded the benefits of this section.
§23-2C-13. Certain retraining benefits to those employees laid-off by the mutual during its first year of operation.
If a domestic mutual insurance company is established pursuant to this article, the chief executive officer of the company shall enter into an agreement with the Department of Personnel for the provision of services and training to an employee of the company who is laid off during the first year of the company's operation and requires additional training to obtain other gainful employment. The Department of Personnel shall administer the program. The fees required for those services and training shall be in an amount established by the Department of Personnel, must not exceed $2 million , in the aggregate, and shall be paid out of the Mutualization Transition Fund. The executive director may select former Bureau of Employment Program employees who are, upon the termination of the commission, employees of the Office of Information Services and Communication and who enter into an employment contract with the company before December 1, 2005, to become employees of the company and said employees shall be afforded the benefits of this section.
§23-2C-14. Certain benefits provided to commission employees.
(a) If a domestic mutual insurance company is created pursuant to this article and becomes operational as a private carrier, then the company shall pay the full actuarial cost to purchase years of credit for not more than five years of service under the state's Public Employee Retirement System to those individuals who retire upon termination of the commission or who become employed by the company upon termination of the commission. The amount purchased per employee shall be calculated by allowing six months of credit to be purchased for each year of service with the commission or its predecessors, including the Bureau of Employment Programs, and shall be paid out of the Mutualization Transition Fund. If upon said purchase, an employee does not vest in the Public Employee Retirement Plan, the employee can receive his or her contribution from the retirement plan and an amount equal to the employer's contribution to be payable out of the Mutualization Transition Fund.
(b) The Public Employees' Retirement System shall take such action as is necessary to carry out the provisions of subsection (a).
(c) All employees employed by the commission on December 31, 2004, who are employed by the company immediately upon termination of the commission shall have the following options related to their accrued sick leave: Freeze said accrued sick leave at the balance that existed as of December 31, 2004 and use said sick leave at the time of retirement to purchase insurance through the Public Employee Insurance Agency. Any related charges shall be paid from the old fund; have their accrued sick leave irrevocably surrendered in exchange for one hour of pay for each hour of accrued sick leave surrendered to be payable from the Mutualization Transition Fund.
(d) The executive director may select former Bureau of Employment Program employees who are, upon the termination of the Commission, employees of the office of information services and communication and who enter into an employment contract with the company before December 1, 2005, to become employees of the company and said employees shall be afforded the benefits of this section.
§23-2C-16. Administration of Old Fund, Uninsured Employer Fund, Self-Insured Employer Guaranty Risk Pool, Self-Insured Employer Security Risk Pool and Private Carrier Guaranty Fund.
(a) Notwithstanding any provision of this code to the contrary, the company shall be the initial third-party administrator of the Old Fund, Uninsured Employer Fund, Self-Insured Employer Guaranty Risk Pool, Self-Insured Employer Security Risk Pool and Private Carrier Guaranty Fund from the termination of the commission and thereafter for a term of at least six months but not more than three years pursuant to an agreement to be entered into between the Insurance Commissioner and the company prior to the termination of the commission. The company shall be paid a reasonable fee for services provided. The company's administrative duties may include, but not be limited to, receipt of all claims, processing said claims, providing for the payment of said claims through the state Treasurer's office or other applicable state agency and ensuring, through the selection and assignment of counsel, that claims decisions are properly defended. The administration of said funds thereafter shall be subject to the procedures set forth in article three, chapter five-a of this code.
(b) The Insurance Commissioner shall review claims determined to be payable from said funds and may contest the determination pursuant to the provisions of article five of this chapter.
(c) The Insurance Commissioner may conduct or cause to be conducted an annual audit to be performed on said funds.
(d) The Insurance Commissioner may contract or employ counsel to perform legal services related solely to the collection of moneys due the Old Fund, including the collection of moneys due the Old Fund and enforcement of repayment agreements entered into for the collection of moneys due on or before June 30, 2005, in any administrative proceeding and in any state or federal court.
§23-2C-18. Ratemaking; Insurance Commissioner.
(a)(1) The rate-making provisions and premium provisions contained in article two of this chapter shall not be applicable to the company or other private carriers. Rates for workers' compensation insurance are subject to the provisions of this section, section eighteen-a of this article and article twenty, chapter thirty-three of this code.
(2) In the event of any conflict, the provisions of this article shall have paramount effect, but the provisions in this chapter and chapter thirty-three of this code shall be construed as complementary and harmonious unless so clearly in conflict that they cannot reasonably be reconciled.
(b) An insurer shall file its rates by filing a multiplier or multipliers to be applied to prospective loss costs that have been filed by the designated advisory organization on behalf of the insurer in accordance with section eighteen-a of this article and may also file carrier specific rating plans.
(c) Rates must not be excessive, inadequate or unfairly discriminatory, nor may an insurer charge any rate which if continued will have or tend to have the effect of destroying competition or creating a monopoly.
(d) The Insurance Commissioner may disapprove rates if there is not a reasonable degree of price competition at the consumer level with respect to the class of business to which they apply. In determining whether a reasonable degree of price competition exists, the Insurance Commissioner shall consider all relevant tests, including:
(1) The number of insurers actively engaged in the class of business and their shares of the market;(2) The existence of differentials in rates in that class of business;
(3) Whether long-run profitability for private carriers generally of the class of business is unreasonably high in relation to its risk;
(4) Consumers' knowledge in regard to the market in question; and
(5) Whether price competition is a result of the market or is artificial. If competition does not exist, rates are excessive if they are likely to produce a long-run profit that is unreasonably high in relation to the risk of the class of business, or if expenses are unreasonably high in relation to the services rendered.
(e) Rates are inadequate if they are clearly insufficient, together with the income from investments attributable to them, to sustain projected losses and expenses in the class of business to which they apply.
(f) One rate is unfairly discriminatory in relation to another in the same class if it clearly fails to reflect equitably the differences in expected losses and expenses. Rates are not unfairly discriminatory because different premiums result for policyholders with similar exposure to loss but different expense factors, or similar expense factors but different exposure to loss, so long as the rates reflect the differences with reasonable accuracy. Rates are not unfairly discriminatory if they are averaged broadly among persons insured under a group, franchise or blanket policy.
§23-2C-18a. Designation of rating organization.
(1) "Classification system" or "classification" means the plan, system or arrangement for grouping risks with similar characteristics or a specified class of risk by recognizing differences in exposure to hazards.
(2) "Experience rating" means a statistical procedure utilizing past risk experience to produce a prospective premium credit, debit or unity modification.
(3) "Prospective loss costs" means historical aggregate losses and loss adjustment expenses projected through development to their ultimate value and through trending to a future point in time. Prospective loss costs do not include provisions for profit or expenses other than loss adjustment expenses.
(4) "Statistical plan" means the plan, system or arrangement used in collecting data for ratemaking or other purposes.
(b) The Insurance Commissioner shall designate one rating organization to:
(1) Assist the commissioner in gathering, compiling and reporting relevant statistical information on an aggregate basis;
(2) Develop and administer, subject to approval by the commissioner, the uniform statistical plan, uniform classification plan and uniform experience rating plan;
(3) Develop and file manual rules, subject to the approval of the commissioner, that are reasonably related to the recording and reporting of data pursuant to the uniform statistical plan, uniform experience rating plan and the uniform classification plan; and
(4) File with the commissioner for approval all prospective loss costs, provisions for special assessments, all supplementary rating information and any changes, amendments or modification of the forgoing proposed in this state.
(c) Each workers' compensation insurer shall:
(1) Record and report its workers' compensation experience to the designated rating organization as set forth in the uniform statistical plan approved by the commissioner; and
(2) Adhere to the uniform classification plan and uniform experience rating plan developed by the designated rating organization and approved by the commissioner.
(d) The commissioner may promulgate exempt legislative rules to implement the provisions of this section, including a rule providing for the equitable sharing and recovery of the expense of the designated rating organization in performing the functions set forth in subsection (b) of this section.
§23-2C-19. Premium payment; employer default; special provisions as to employer default collection.
(a) Each employer who is required to purchase and maintain workers' compensation insurance or who elects to purchase workers' compensation insurance shall pay a premium to a private carrier. Each carrier shall notify its policyholders of the mandated premium payment methodology and under what circumstances a policyholder will be found to be in policy default.
(b) An employer who is required to purchase and maintain workers' compensation insurance but fails to do so or otherwise enters policy default shall be deprived of the benefits and protection afforded by this chapter, including section six, article two of this chapter, and the employer is liable as provided in section eight of said article: The policy defaulted employer's liability under these sections is retroactive to the day the policy default occurs: The private carrier shall notify the policy defaulted employer of the method by which the employer may be reinstated with the private carrier.
(c) In addition to any other liabilities provided in this section, the Insurance Commissioner may impose an administrative fine of not more than $10,000 against an employer if the employer fails to provide mandatory coverage required by this chapter.
(d) The company and the Insurance Commissioner shall be provided extraordinary powers to collect any premium amounts payable to the workers' compensation fund or the new fund and due from July 1, 2005, through June 30, 2008: Those powers shall include: (1) Withholding of coverage effective January 1, 2006: Employers without coverage shall immediately be deprived of the benefits and protection afforded by this chapter, including section six, article two of this chapter and the employer is liable as provided in section eight of said article; (2) the right to maintain a civil action against all officers and directors of the employer individually for collection of the premium owed; and (3) the right to immediately report the employers to the state Tax Department and other state agencies to secure suspension of any and all licenses, certificates, permits, registrations and other similar approval documents necessary for the employer to conduct business in this state.
(e) Every agency shall, upon notification of employer default by the Insurance Commissioner, immediately begin the process to revoke or terminate any contract, license, permit, certificate or other authority to conduct a trade, profession or business in this state and shall refuse to issue, grant or renew any such contract, license, permit, certificate or authority.
(1) The term "employer default" means having an outstanding balance or liability to the old fund or to the uninsured employers' fund or being in policy default, as defined in section two of this article, or failure to maintain mandatory workers' compensation coverage. An employer is not in default if it has entered into a repayment agreement with the Insurance Commissioner and remains in compliance with the obligations under the repayment agreement.
(2) The term "agency" includes any unit of state government such as officers, agencies, divisions, departments, boards, commissions, authorities or public corporations.
(f) Any amounts owed by an employer to the state as a result of an employer default is a personal liability of the employer, its officers, owners, partners and directors and is immediately due and owing and shall, in addition, be a lien enforceable against all the property of the employer, its officers, owners, partners and directors: Provided, That the lien shall not be enforceable as against a purchaser, including a lien creditor, of real estate or personal property for a valuable consideration without notice, unless docketed as provided in section one, article ten-c, chapter thirty-eight of this code: Provided, however, That the lien may be enforced as other judgment liens are enforced through the provisions of said chapter and the same is considered by the circuit court to be a judgment lien for this purpose.
(g) The Insurance Commissioner shall propose rules for adoption by the industrial council to effectuate the purposes of this section including the conditions under which agencies shall comply with the provisions of subsection (e) of this section and specifying how notice of default shall be given by the commissioner.
§23-2C-20. Claims administration issues.
(a) A self-insured employer shall continue to comply with rules promulgated by the board of managers governing the self-administration of its claims and the successor to the commission shall also comply with the rules promulgated by the board of managers governing the self-administration of claims.
(b) The successor to the commission, any other private carrier and any employer that self-insures its risk and self-administers its claims shall exercise all authority and responsibility granted to the commission in this chapter and provide notices of action taken to effect the purposes of this chapter to provide benefits to persons who have suffered injuries or diseases covered by this chapter. The successor to the commission, private carriers and self-insured employers shall at all times be bound and shall comply fully with all of the provisions of this chapter. Furthermore, all of the provisions contained in article four of this chapter pertaining to disability and death benefits are binding on and shall be strictly adhered to by the successor to the commission, private carriers and the self-insured employer in their administration of claims presented by employees of the self-insured employer.
(c) Upon termination of the commission, the Occupational Pneumoconiosis Board shall be transferred to the Insurance Commissioner and shall be administered by the Insurance Commissioner. The company and other private carriers shall have all authority and responsibility granted to the self-insured employers in the administration and processing of occupational pneumoconiosis claims.
(d) Upon termination of the commission, all claims allocation responsibilities shall transfer from the commission to the Insurance Commissioner.
(e) Upon termination of the commission, the third-party administrator of the Old Fund shall have all administrative and adjudicatory authority vested in the commission in administering old law liabilities and otherwise processing and deciding old law claims.
(c) Upon a determination by the Office of Judges that a denial of compensability, a denial of an award of temporary total disability or a denial of an authorization for medical benefits was unreasonable, reasonable attorney's fees and the costs actually incurred in the process of obtaining a reversal of the denial shall be awarded to the claimant and paid by the private carrier or self-insured employer which issued the unreasonable denial. A denial is unreasonable if, after submission by or on behalf of the claimant, of evidence of the compensability of the claim, the entitlement to temporary total disability benefits or medical benefits, the private carrier or self-insured employer is unable to demonstrate that it had evidence or a legal basis supported by legal authority at the time of the denial which is relevant and probative and supports the denial of the award or authorization. Payment of attorney's fees and costs awarded under this subsection will be made to the claimant at the conclusion of litigation, including all appeals, of the claimant's protest of the denial.
§23-2C-22. Rules.
Except as otherwise provided in this chapter, all rules applicable to the former Workers' Compensation Commission are hereby adopted and made effective as to the operation of the Workers' Compensation insurance market to the extent that they are not in conflict with the current law. Authority to enforce the existing rules and the regulatory functions of the commission as set forth in chapter twenty-three of the code shall transfer from the commission to the Insurance Commissioner effective upon termination of the commission.
§23-2C-23. Transfer of assets and contracts.
With the establishment of the company, all commission assets, excluding those necessary to perform the regulatory function of the Insurance Commissioner under this chapter are hereby transferred and assigned to the company.
§23-2C-24. Surplus note or other loan arrangement for new fund.
(a) Notwithstanding any other provision of this article to the contrary, the transfer of all or a portion of the remainder of funds to be disbursed into the new fund as provided subsection (b), section six of this article, in such amount as may be determined by the Governor, may be conditioned upon the repayment thereof and subject to the terms of a surplus note or other loan arrangement. The Governor shall specify the amount that is to be transferred to the new fund conditioned upon the repayment thereof and subject to loan arrangement in the proclamation issued pursuant to section eleven of this article. The terms of any such surplus note or other loan arrangement must be approved by the Insurance Commissioner before execution of the said proclamation.
(b) Payments received by the Treasurer from the company in repayment of any outstanding surplus note or other loan arrangement made pursuant to this subsection shall be deposited in the treasury of the state to the credit of the old fund.
(c) The Insurance Commissioner may enter into such agreements, including loan arrangements, with the company that are necessary to accomplish the transfers addressed in this article.