Michigan Administrative Code › Department - Labor and Economic Opportunity › Workers Compensation Agency › Workers' Compensation Agency - General Rules › Part 3 - HEARINGS › Section R. 408.43m - Servicing self-insured employers or groups; application; requirements; noncompliance

Current through Vol. 24-12, July 15, 2024
Rule 13m.
(1) An
				  individual, partnership, limited liability company, or corporation that desires
				  to engage in the business of providing 1 or more services for an individual
				  self-insurer or a self-insurers' group shall apply to the agency before
				  entering into a contract with the individual or group self-insurer and shall
				  satisfy the agency that it has adequate facilities and competent staff with
				  Michigan workers' compensation adjusting experience within the state to service
				  a self-insured program in a manner that fulfills the employers' obligations
				  under the act and the rules of the agency. Workers' compensation claims of
				  Michigan individual or group self-insured employers shall be handled within the
				  state of Michigan by its staff, except that the director, at his or her
				  discretion, may permit an approved service company to handle the claims of a
				  Michigan individual self-insurer outside of this state upon specific written
				  request by the individual self-insurer and the service company. The request for
				  permission must set forth documentation sufficient to the agency that claims
				  will be handled pursuant to Michigan law, administrative rules, and agency
				  policy. The director will respond to the request in writing, giving the reasons
				  for denial, or if approved, the conditions of approval. The approval may be
				  withdrawn by the director at any time based upon the failure of the service
				  company or employer, or both, to comply with the conditions of the approval.
				  Service may include claims adjusting, loss control services, underwriting, and
				  the capacity to provide required reporting. Any individual, partnership,
				  limited liability company, or corporation that provides claims adjusting or
				  loss control services to an approved self-insured employer, where the
				  self-insured employer has designated within its own organization an individual
				  to be responsible to the agency for its claims program or loss control
				  services, or both, shall not be considered a service company for purposes of
				  this rule.
(2) An applicant shall
				  apply to the agency for approval to act as a servicing company for self-insured
				  employers or group funds on a form prescribed by the agency. The application
				  must contain answers to all questions. An applicant shall give the answers
				  under oath. The agency shall approve the application prior to the service
				  company entering into a contract with an approved self- insurer. Approval to
				  act as a service company for self-insurers is granted for a period of 1 year
				  and is subject to renewal annually.
(3) If a service company seeks approval to
				  service claims for self-insurers, then it shall submit proof that it has,
				  within its organization at least 1 person who has the knowledge and Michigan
				  workers' compensation adjusting experience necessary to handle claims involving
				  the act. The service company shall attach a resume covering the principal
				  person's background to the application of the service company. The principal
				  individuals adjusting workers' compensation claims shall hold a current
				  workers' disability compensation adjuster's license under chapter 12 of the
				  insurance code of 1956, 1956 PA 218, MCL 500.1200 to 500.1247.
(4) If a service company seeks approval to
				  provide underwriting service to selfinsurers, then it shall submit proof that
				  it has, within its organization or under contract on a full-time basis, at
				  least 1 person who has the knowledge and experience necessary to provide
				  underwriting services for workers' compensation excess liability insurance
				  coverage. The service company shall attach a resume detailing the principal
				  person's background to the application of the service company.
(5) If a service company seeks approval to
				  furnish loss control services to selfinsurers, then it shall submit proof that
				  it has, within its organization or under contract on a full-time basis, at
				  least 1 person who has the knowledge and background necessary to adequately
				  provide loss control and health services.
(6) A service company shall maintain adequate
				  staff in the state. The service company shall authorize staff to act for the
				  service company on all matters covered by the act and the rules of the
				  agency.
(7) A service company shall
				  attach to the application a copy of its standard service agreement that it will
				  enter into with self-insured employers or group funds. The service company
				  shall certify, in writing, that the service agreement complies with the act and
				  these rules. The service company shall certify, and include a provision in its
				  standard service contract, which states that the contract provides for the
				  handling of all claims with dates of injury or disease within the contract
				  until conclusion of the claims, unless the service company is relieved by the
				  agency, in writing, of the responsibility for handling claims. If the service
				  contract calls for additional fees for any reason, then the service company
				  shall clearly define the additional fees in the contract. For a service company
				  to be relieved of the responsibility of handling claims to conclusion, the
				  client, the previous service company, and the new service company shall sign a
				  claims transfer agreement. The claims transfer agreement shall be completed on
				  a form prescribed by the agency and shall include a written request made by the
				  previous service company to be relieved of its claims handling responsibilities
				  to the agency. A requesting company is relieved of its claims handling
				  responsibility only after receiving a written response from the agency
				  approving a request. The service company shall certify that it will report to
				  the specific excess insurance carrier or aggregate excess insurance carrier, or
				  both, and put the specific excess insurance carrier or aggregate excess
				  insurance carrier, or both, on notice of all claims as required by the
				  self-insurers' or group self-insurers' insurance policies. The standard service
				  contract filed with the agency for approval and renewal of the service company
				  authority must include language specifically stating that the service company
				  is responsible for reporting to the excess insurance carrier. The agency may
				  waive the reporting requirement upon written request to the agency. Any dispute
				  involving late reporting of excess liability insurance claims and potential
				  penalties must be reported to the agency immediately.
(8) A service company shall certify, and
				  provide for in all service contracts, that all documents generated or prepared
				  by the service company for the group or the individual self-insurer or any
				  materials relating to an individual or group self-insurer held by a service
				  company are the property of the individual or group self-insurer and must be
				  surrendered to the individual or group self-insurer within 10 days of
				  termination of the service contract, subject to written request by the
				  individual or group self-insurer.
(9) Failure to comply with the provisions of
				  the act constitutes good cause for withdrawal of the approval to act as a
				  service company for self-insurers. The agency shall give 30 days' notice of
				  withdrawal. The agency shall give the notice by certified or registered mail,
				  served upon all interested parties.