Arkansas Administrative Code › Agency 054 - Arkansas Insurance Department › Rule 054.00.94-004 - Rule #54 - Arkansas Workers Compensation Insurance Plan

Current through Register Vol. 49, No. 6, June, 2024
SECTION 1. AUTHORITY
This Rule and Regulation is adopted and promulgated by the
			 Insurance Commissioner for the State of Arkansas ("Commissioner") pursuant to
			 the authority vested in the Commissioner by Act 561 of 1991 [codified at
			 Arkansas Code §§
								23-67-201 et
			 seq.]; Act 1155 of 1993 [An Act amending Arkansas Code §§
								23-67-201 et
			 seq.] ; Act 796 of 1993 [An Act amending Chapter 9 of Title 11, Arkansas Code];
			 Act 1269 of 1993 [An Act supplementing Chapter 67 of Title 23, Arkansas Code];
			 and by Arkansas Code §§
								23-61-108,
			 23-67-119,
			 23-79-109,
			 and
			 25-15-201 et
			 seq.
SECTION 2. EFFECTIVE
		  DATE
The provisions of this Rule and Regulation shall become effective
			 March 31, 1994.
SECTION 3.
		  PURPOSE
The purpose of this Rule and Regulation, as amended, is to reform
			 the mandatory Workers' Compensation Insurance Plan ("WCIP" or "Plan") to assure
			 coverage for employers who are in good faith entitled, but unable to procure,
			 workers' compensation and employers' liability insurance in the voluntary
			 market, and to provide for the fair, efficient, and equitable operation and
			 regulation of the Plan.
SECTION
		  4. DEFINITIONS
A. "Commissioner"
		  shall mean the Insurance Commissioner of the State of Arkansas.
B. "Plan" or "WCIP", shall mean the Arkansas
		  workers' Compensation Insurance Plan.
C. "Plan Administrator" means such
		  organization or organizations to which the responsibility for administering the
		  affairs of the Plan may, from time to time, be delegated, including but not
		  limited to such functions and duties as rates, forms, and statistics.
D. "National Council on Compensation
		  Insurance" or "Council" means a rating organization or advisory organization of
		  that name which is licensed in this State to make and file rates,
		  classifications, and rating plans for workers' compensation insurance including
		  rates for the residual market.
E.
		  "Producer" means a person designated by and representing an employer which said
		  person is properly licensed to sell or place workers' compensation and
		  employers' liability insurance in the State of Arkansas whose privileges under
		  the Plan have not been suspended or revoked by the Commissioner.
F. "Affiliated Insurers" means an insurer
		  that directly, or indirectly through one (1) or more intermediaries, controls,
		  or is controlled by, or is under common control with, the insurer specified.
		  The term "control" means the possession, direct or indirect, of the power to
		  direct or cause the direction of the management and policies of an insurer,
		  whether through the ownership of voting securities, by contract, or otherwise.
		  Control shall be deemed to exist if any person or business enterprise, directly
		  or indirectly, owns, controls, holds with the power to vote, or holds proxies,
		  representing ten (10) percent or more of the voting securities of any other
		  insurer.
G. "Servicing Carrier"
		  means an insurer selected by the Commissioner pursuant to Section 12(1) hereof
		  to receive and service assignments on behalf of the Plan.
H. "Employer" means any business organization
		  or enterprise that is required by statute to maintain workers compensation
		  insurance in this State, regardless of the domicile or principal place of
		  business of such organization or enterprise. The term shall include any
		  business organizations or enterprises that are affiliated as a result of common
		  management or common ownership.
I.
		  "Articles of Agreement" or "Articles" means the reinsurance mechanism
		  authorized under this Plan to provide reinsurance to the servicing carriers on
		  employers assigned to them under this Plan, and to assure equitable and
		  efficient distribution of its profits and losses among the participating
		  carriers, which said agreement and any amendments thereto shall be provided to
		  and approved by the Commissioner but which, in cases of conflict between them
		  and this Rule and Regulation, shall be subordinate to this Rule and
		  Regulation.
J. "Workers'
		  Compensation Insurance" means:
(a) Statutory
		  workers' compensation and occupational disease coverage as required by Arkansas
		  Code §§
									11-9-401
		  et. seq., 23-67-119, and
		  23-67-201 et
		  seq., including also liability under the Longshore and Harbor "Workers'
		  Compensation Act, as amended, and the Federal Coal Mine Health and Safety Act
		  of 1969, as amended;
(b) Employers
		  liability insurance written in connection with a workers' compensation policy;
		  and
(c) Such other coverages as
		  approved by the Commissioner.
K. "Net Premiums Written" means the gross
		  direct premiums charged less all premiums (except dividends and savings
		  refunded under participating policies) returned to insureds for all Workers
		  Compensation and Occupational Disease Insurance, exclusive of premiums for
		  employers subject to this Plan, and for employers written under the National
		  Defense Projects Rating Plan and under excess policies.
L. "Collected Premium" means the gross direct
		  premium charged and physically collected and receipted for all employers
		  subject to this Plan.
M. "Voluntary
		  Offer of Coverage" means a legitimate, good faith offer of workers'
		  compensation insurance made by a workers' compensation insurer to an employer
		  on a "voluntary" basis outside this Plan, which said offer is either:
(i) of such workers' compensation insurance
		  on a monoline basis and on a reasonable rating plan approved for use in
		  Arkansas by the Commissioner for that insurer; or
(ii) of such workers' compensation insurance
		  in combination or coordination with other property and/or casualty coverages
		  and limits desired by the employer and as such insurer may also offer; provided
		  however, that such insurer shall apply its filed rating plan (including all
		  applicable discounts or credits) to such employer in a good faith,
		  non-discriminatory manner. "Voluntary Offer of Coverage" shall in no event be
		  interpreted as including or referring to an offer, entreaty or opportunity
		  presented for coverage under any type of self-insured workers' compensation
		  plan.
Neither the Plan Administrator(s) nor the servicing carrier(s)
			 shall have a responsibility to determine whether the putative voluntary offer
			 of coverage is truly "voluntary", but any agent or broker and any insurer
			 knowingly submitting an offer of workers compensation coverage to an employer
			 which does not meet the above definition of a bona fide "voluntary offer" may
			 be in violation of Ark. Code Ann. §§
										23-66-205
			 et. seq. and Section 19.D. of this Rule and Regulation.
N. "Good faith bona fide dispute"
		  means a dispute between an employer and an insurer where the employer, or
		  someone on its behalf, has provided written notice of the dispute to the
		  insurer. The employer must have given reasonable notice to the insurer of the
		  specific areas of the dispute and have requested voluntary resolution or
		  conciliation of the matter(s) in dispute.