Arkansas Administrative Code › Agency 054 - Arkansas Insurance Department › Rule 054.00.96-006 - Reg. 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,
			 23-67-219,
			 23-67-310,
			 23-79-109,
			 and
			 25-15-201 et
			 seq.
SECTION 2. EFFECTIVE
		  DATE
The provisions of this Rule and Regulation shall become effective
			 January 1, 1997, upon statutory filing per Arkansas law.
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. WCIP DEFINITIONS
A.
		  "Affiliated Insurer" An insurer that directly, or indirectly through one (1) or
		  more intermediaries, controls, or is controlled by, or is under common control
		  with another 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.
B. "Articles of Agreement" or "Articles" The
		  reinsurance mechanism authorized under this Plan to provide reinsurance to the
		  servicing carriers on employers assigned to them under this Plan, 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.
C. "Assigned Carrier" or "Servicing Carrier"
		  The insurer authorized to receive Plan assignments and provide coverage to
		  eligible employers on behalf of those participating companies subscribing to
		  the Articles of Agreement incorporated as a part of the Plan in this
		  state.
D. "Collected Premium" The
		  gross direct premium charged and physically collected and receipted for all
		  employers subject to this Plan.
E.
		  "Commissioner" The Insurance Commissioner for the State of Arkansas.
F. "Employer" Any business organization or
		  enterprise that is required by statute to maintain workers' compensation
		  insurance in this State. The term shall include any business organizations or
		  enterprises that are affiliated as a result of common management or common
		  ownership.
G. "National Council on
		  Compensation Insurance, Inc." or "NCCI" The rating organization or advisory
		  organization licensed in this State to make and file rates, rating values,
		  classifications, and rating plans for workers' compensation insurance
		  .
H. "Net Premiums Written" 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.
I. "Plan" or, "WCIP" The Arkansas Workers'
		  Compensation Insurance Plan.
J.
		  "Plan Administrator" 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.
K.
		  "Premium in Dispute" A workers' compensation insurance premium obligation in
		  which a bona fide dispute exists only if the employer or its representative has
		  provided:
(a) written notice to the insurer or
		  the servicing carrier detailing the specific areas of dispute;
(b) an estimate of the premium the employer
		  believes to be correct, with an explanation of the premium
		  calculation;
(c) payment of the
		  undisputed portion of the premium; and
(d) a written request that includes all
		  information relevant to the dispute to the Plan Administrator for a hearing
		  before the appropriate administrative or regulatory body having jurisdiction
		  over appeals on Plan matters.
L. "Producer" A licensed casualty insurance
		  agent or broker as defined in the State Insurance Code, whose privileges under
		  the Plan have not been suspended or revoked. Provided however, that such
		  producer shall, for purposes of the Plan, be considered to be acting on behalf
		  of the insured or employer applying under the Plan and not as an agent of the
		  Plan Administrator or of any assigned carrier for Plan business.
M. "Undisputed Premium" A workers'
		  compensation insurance premium obligation that is not the subject of a bona
		  fide dispute.
N. "Voluntary Offer
		  of Coverage" 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 16.D. of this Rule and Regulation.
O. "Workers'
		  Compensation Insurance"
(a) Statutory
		  workers' compensation and occupational disease liability insurance including
		  insurance for 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.