West Virginia Code of State Rules › Agency 85 - Workers' Compensation › Title 85 - PROCEDURAL RULE WORKERS' COMPENSATION RULES OF THE WEST VIRGINIA INSURANCE COMMISSIONER › Series 85-18 - Self Insurance, Self Administration And Third Party Administrators › Section 85-18-8 - Security and Bond

Current through Register Vol. XLI, No. 28, July 12, 2024
8.1. In
				accordance with the provisions of the rules of the Commissioner, self-insured
				employers must secure certain obligations for payments. In such instances where
				security or bond is required by the Commissioner, the security or bond shall be
				tendered to the Commissioner in accordance with this section.
8.2. Acceptable types of security and bond
				include, but are not limited to, occurrence type security or bond, marketable
				securities, and letters of credit. The Commissioner has sole discretion to
				determine that a particular type of security or bond is acceptable or
				unacceptable.
a. If the self-insured employer
				obtains an occurrence-type security or bond, the security or bond is liable in
				the place of the employer should the employer be unable to meet its obligations
				for any or all injuries or deaths that may occur during the time period for
				which the security or bond is effective. The security or bond remains liable at
				the time any awards for the injuries or deaths are subsequently made and for
				the entire time period in which benefits will be paid under the awards,
				including death benefits to surviving dependents.
No language to the contrary contained in any writing
				  associated with or included as a part of the security or bond shall defeat this
				  obligation of the security or bond posted by a self-insured employer as
				  described herein. Every surety, guarantor, warrantor, or other person or entity
				  who purports to stand in the place of the self-insured employer for the payment
				  of benefits shall be considered to have given the security or bond in
				  compliance with this subsection, and no statement or disclaimer in the security
				  or bond shall negate this requirement. The surety company issuing the bond must
				  meet and maintain the Commissioner's financial strength requirements. The
				  Commissioner shall review the financial strength of the issuers of all the
				  surety provided by the self-insured employer in the course of the
				  Commissioner's annual review and recommendation to the Industrial
				  Council.
b. If the
				self-insured employer wishes to post marketable securities to meet its
				obligation for security or bond, the securities must satisfy the following
				requirements:
1. The securities must be fixed
				term debt instruments with a fixed and determinable principal amount;
2. The issuer of the securities must be a
				governmental entity or governmental agency or corporation of this state, or any
				other state or of the United States;
3. The maturity date of the instrument cannot
				be more than ten years from the date the securities are posted with the
				Commissioner; and
4. The payment of
				both principal and interest are denominated and payable in United States
				dollars with the interest payable at fixed periodic payment dates and at a
				fixed rate of the principal amount of the indebtedness.
c. If the self-insured employer wishes to
				post a letter of credit to meet its obligation for security or bond, the letter
				of credit must satisfy the following requirements:
1. The letter of credit must be issued by a
				bank operating in the United States;
2. The letter of credit must utilize the
				letter of credit forms approved by the Commissioner and in accordance with this
				rule; and
3. Before it will be
				considered security for self-insured risks, the letter of credit must contain
				an "evergreen" clause as specified by the Commissioner, which holds the issuer
				responsible for the employer-applicant's liability resulting from all injuries
				incurred by or deaths of the employer's employees prior to the expiration of
				the letter of credit. In the event that the employer-applicant is unable to
				obtain the issuance of the evergreen form of letter of credit, then the
				employer-applicant must obtain permission from the Commissioner to use the
				letter of credit with a non-renewal draw clause. The employer must also provide
				the form letter of Authority and Acknowledgment which authorizes the draw of
				the entire amount of the letter of credit in the event of cancellation of the
				letter of credit, although the self-insured employer is not then in default
				under chapter twenty-three of the West Virginia Code or the rules promulgated
				thereunder.
4. The bank issuing the
				letter of credit must meet and maintain the Commissioner's financial strength
				requirements.