Code of Vermont Rules › Agency 21 - DEPARTMENT OF FINANCIAL REGULATION › Sub-Agency 020 - INSURANCE DIVISION › Chapter 046 - RULES GOVERNING NONPROFIT CORPORATION WORKERS' COMPENSATION PROGRAMS › Section 21 020 046 - RULES GOVERNING NONPROFIT CORPORATION WORKERS' COMPENSATION PROGRAMS

Current through June,
				2024
Section 1 PURPOSE
				AND AUTHORITY
This regulation is promulgated pursuant to and in accordance
				  with the provisions of Title 21 Section
				  687a
				  of the Vermont Statutes Annotated. Its purpose is to establish rules, forms,
				  and procedures relating to the administration and operation of any nonprofit
				  corporation formed by an association in existence in Vermont for 5 or more
				  continuous years for the purpose of securing workers' compensation and
				  employer's liability insurance for employees of participating association
				  member employers, for participating association member employers, for employees
				  of the association, and for the association itself; to expedite approval of
				  complying plans of operation; to provide for the fiscal integrity of agreements
				  entered into under
				  21 V.S.A. §
											687a; and to provide that trade, market, and
				  claim practices engaged in by such corporations are equitable, fair,
				  consistent, and in compliance with Vermont workers' compensation laws and
				  regulations.
Systems, processes and procedures implementing the
				  regulations governing intermunicipal insurance agreements authorized by
				  subchapter 6 of chapter 121 of Title 24 and captive insurance companies
				  chartered under chapter 141 of Title 8, to the extent applicable, may be
				  utilized by the Commissioner in regulating workers' compensation programs
				  subject to this regulation.
Section
				2 DEFINITIONS
A. "Actuary" or
				"Approved Actuary" means a person who is not an employee of the corporation,
				who is a member of the Casualty Actuarial Society, who has been approved by the
				Commissioner and who has experience in the area of self-insured workers'
				compensation programs. The actuary must apply to the Department to be placed
				upon the approved list and have demonstrated expertise and experience in
				workers' compensation self insurance to the satisfaction of the
				Commissioner.
B. "Administrator"
				means the individual, partnership, corporate or other entity authorized to
				serve as a representative of the corporation in carrying out the policies of
				the corporation's board and managing the corporation's activities.
C. "Association" means an association which
				has been in existence in Vermont for five or more continuous years which has
				chosen to establish a nonprofit corporation for purposes in accordance with
				21 V.S.A. §
											687a.
D. "Board" means the Board of Directors or
				other governing authority of the corporation selected by its members pursuant
				to the Member Agreement and the Bylaws, and in accordance with
				21 V.S.A. §
											687a and 11 V.S.A. chapter 19.
E. "Commissioner" means the Commissioner of
				the Department of Banking, Insurance, and Securities of the State of
				Vermont.
F. "Contribution" means
				money, or a money equivalent approved by the Commissioner, required of a
				corporation member for the purpose of distributing, sharing, or pooling workers
				compensation risks in a nonprofit corporation's workers' compensation
				program.
G. "Corporation" means a
				nonprofit corporation established in accordance with
				21 V.S.A. §
											687a and 11 V.S.A. chapter 19.
H. "Department" means the Vermont Department
				of Banking, Insurance and Securities.
I. "Excess funds" means funds in excess of
				Reserves, Surplus and the capital necessary to fund the general operation of
				the corporation, as set.forth in Section 14.
J. "Fiscal integrity" means the economic
				soundness and fairness of a nonprofit corporation's workers' compensation
				program.
K. "Member" means a
				Vermont employer which has membership rights in a nonprofit corporation
				established in accordance with
				21 V.S.A. §
											687a and 11 V.S.A. chapter 19.
L. "Member Agreement" means the written
				contract between a corporation member and the corporation, in addition to the
				corporation's bylaws, setting forth the conditions of membership in the
				corporation, and the obligations of each member to the other members.
M. "Program" or "Workers' Compensation
				Program" means the program of workers' compensation and employer's liability
				insurance, self insurance, risk management or combination thereof offered by
				the corporation, in accordance with
				21 V.S.A. §
											687a, to its members and to the
				association.
N. "Reserves" means
				capital set aside for payment of claims and claims-related expenses, as set
				forth in Section 11.
O. "Service
				agent" or "Agent" means any individual, partnership, corporation or other
				entity that may provide any or all of the services necessary to create or
				maintain an approved corporation's program, including but not limited to claims
				adjustment, safety engineering, compilation of statistics, the preparation and
				collection of contribution payments, loss reports and the administration of a
				claims fund.
P. "Surplus," as set
				forth in Section 10, means fund balance in excess of organization and ongoing
				general operation costs, and in excess of Reserves.
Q. "Trade, marketing and claim practices"
				means the methods employed by the corporation in advertising, promoting,
				selling, administering and managing its insurance program to and for its
				members and prospective members, and the corporation's treatment of any
				employee of a member or of the association or any claimant with respect to the
				members' or the association's obligations under 21 V.S.A. chapter 9.
R. "Workers' Compensation Program Contract"
				means the written contract between a corporation member and the corporation
				setting forth the terms of the Workers' Compensation Program.