Bill Summaries: H988 (2013-2014 Session)

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  • Summary date: Apr 18 2013 - View summary

    Enacts new GS 97-40.2, establishing the Uninsured Employers' Fund (Fund) as a reserve fund within the North Carolina Industrial Commission. Identifies the purpose of the Fund as providing for the payment of claims awarded against uninsured defaulting employers who do not provide compensation to employees or their beneficiaries as prescribed by GS Chapter 97, the NC Workers' Compensation Act.

    Directs the Chair of the North Carolina Industrial Commission (Chair) to administer, maintain, and disburse the Fund in accordance with the provisions of this section and all regulations adopted under this section. Confers responsibility for administering the collection of surcharges and the disbursement of the funds received under the provisions and regulations of this section on the NC Commissioner of Insurance (Commissioner).

    Provides that the annual surcharge imposed under this section applies to all workers' compensation and employers' liability insurance policies written or renewed or, in the case of self-insured employers, applies to coverage provided on or after January 1, 2014. Prohibits application of the surcharge to (1) any reinsurance or retrocessional transaction, (2) the state or to any local political subdivision of the state that acts as a self-insured employer, or (3) any workers' compensation endorsement required pursuant to any other exclusions. Provides additional details and specifications as to the administration of the Fund and for determining the surcharge. Defines policyholder and self-insured employer as those terms are used in subsection (b) of this section.

    Authorizes the Chair to assign and collect penalties from an uninsured defaulting employer and specifies standards for assessing the penalties. Provides details regarding the filing of a claim for compensation under the provisions of this Chapter, including timelines under which the defaulting employer must act and rules governing when benefits are to be paid to a claimant from the Fund.

    Directs the Chair to file an order for payment of compensation and assessments with the clerk of superior court after an award has been entered against an employer for compensation under any provision of this Chapter. Provides that the claimant may then apply to the Chair for compensation from the Fund in accordance with the procedures established by administrative rule. Sets out guidelines on when benefits may be paid.

    Assigns the duty to conserve the assets of the Fund to the Chair and prohibits any payments being made from the Fund without application and approval by the Chair. Provides that review of any decision by the Chair must be in accordance with the Administrative Procedures Act. Authorizes the Chair to adopt rules necessary for the processing and payment of compensation from theFund inaccordance with GS Chapter 150B. Sets out when an employee's beneficiaries may bring an action against an employer.Directs the Chair, acting on the behalf of the Fund, to exhaust all remedies at law against the uninsured delinquent employer of the claimant in an effort to collect the amount of any award that the Fund paid to the claimant. Provides that nothing in this section is intended, nor is to be deemed, to affect the obligations of insurance carriers or self-insured employers imposed by any other section of this chapter.

    Appropriates $2.5 million from the General Fund to the Uninsured Employers' Fund,created by this act, for the 2013-14 fiscal year to serve as the initial installment andcontent of the Fund.

    Requires the Chair to annually submit an accounting of the Fund to the State Treasurer and to the Joint Legislative Commission on Governmental Operations, beginning January 1, 2014. Specifies information that must be included in the report.

    Effective July 1, 2013.