Opinion ID: 2065759
Heading Depth: 1
Heading Rank: 3

Heading: Is PCIGC An Insurer?

Text: Relying on Uninsured Employers' v. Danner, 388 Md. 649, 882 A.2d 271 (2005) and a few out-of-State cases, the Court first holds that, despite a clear, unambiguous statutory provision to the contrary, PCIGC is not an insurer. In my view, Danner is distinguishable and the out-of-State cases do not accurately reflect the intent of the Maryland General Assembly. Like Mr. Yanni, Gerald Danner suffered a compensable accidental injury, filed a claim for workers' compensation benefits, and received an award. Unlike this case, however, his employer did not carry workers' compensation insurance and made no payments on the award. Danner therefore requested payment from the Uninsured Employer's Fund (UEF), which denied the request. The Workers' Compensation Commission thereafter ordered the Fund to pay the award, as well as a penalty and attorney's fee. On judicial review, we upheld the order to pay the benefits under the award but reversed the order to pay the penalty and attorney's fee. We are not concerned here with the discussion regarding the Fund's obligation to pay the basic benefits provided for in the award, but rather the reason why we held that the Fund was not liable for the penalty. That also was a matter of statutory construction. LE § 9-728  the statute that allows the Commission to assess penalties for late payment of awards  permits the Commission to assess a penalty if it finds that an employer or its insurer has failed, without good cause, to begin paying an award within the time allotted. (Emphasis added). The Fund was certainly not Danner's employer; the question was whether it qualified as the employer's insurer. The term insurer is not defined in § 9-728 or, indeed, anywhere in subtitle 7 of title 9. In the absence of any directly controlling statute, we looked to two other sections of the Workers' Compensation Law  LE § 9-401(b) and LE § 9-316(a)(3). Section 9-401(b), which is part of the subtitle dealing with the requirement of insurance coverage, defines authorized insurer as a stock corporation or mutual insurer that is authorized to provide workers' compensation insurance in the State, a governmental self-insurance group, a self-insurance group of private employers that meets certain statutory requirements, or an individual employer that self-insures in conformance with LE § 9-405. Section 9-316(a)(3), which permits the Commission to collect a tax from insurers to defray the expenses of the Commission, defines insurer for that purpose in much the same way as § 9-401(b). The UEF, we held, did not fit within either of those definitions, and we therefore concluded, in the absence of any other statute that might bring it within the ambit of an insurer, it could not be considered one. Because it was neither an employer nor an insurer, it was not an entity against which a penalty could be assessed under LE § 9-728. In marked contrast to the situation with respect to UEF, PCIGC is defined as an insurer, for the very purpose at issue here. PCIGC is created and its duties are defined in title 9, subtitle 3 of the Insurance Article. Title 9 deals with impaired insurance entities; subtitle 3 provides for PCIGC. Unlike UEF, PCIGC is a private corporation, not a State agency. INS § 9-306(a) provides that, except as to surety bonds, PCIGC is obligated to the extent of covered claims existing on or before the determination of insolvency and, within certain dollar limits, requires it to pay the full amount of any covered claim arising out of a workers' compensation policy. Of particular relevance and, to me, of governing importance in this regard, § 9-306(c) provides that: [PCIGC] shall be deemed the insurer to the extent of the Corporation's obligation on the covered claims and, to that extent, shall have the rights, duties, and obligations that the insolvent insurer would have had if the insurer had not become insolvent. (Emphasis added). Unlike the situation in Danner, we do not need to go hunting for definitions of insurer in other parts of the Labor and Employment Article that have nothing directly to do with PCIGC to determine whether PCIGC falls within them. The statute that creates PCIGC and sets forth its functions and obligations makes it an insurer for this very purpose and expressly imposes on it the duties and obligations that the insolvent insurer (Legion) would have had if it had not become insolvent. That, alone, renders the holding in Danner and the analysis underlying that holding inapposite. To the extent that the penalty assessed by the Commission constitutes part of a covered claim, PCIGC clearly is an insurer and therefore falls within the ambit of LE § 9-728. None of the out-of-State cases relied upon by the Court dictate a different result.