S 1231 Session 109 (1991-1992)
S 1231 General Bill, By Saleeby, Land, McConnell, M.F. Mullinax and T.H. Pope
A Bill to amend Section 42-7-50, Code of Laws of South Carolina, 1976,
relating to participation under the State Workers' Compensation Fund, so as to
include employers with twenty-five or fewer employees at the time of initial
coverage, provide for notification when coverage expires, and provide for
private employers to exercise their option to participate; and to amend
Section 42-7-70, relating to rates and premiums paid by participants, so as to
require premiums collected and investment income from private employers to be
determined, maintained, and accounted for separately from premiums of
governmental entities.
01/28/92 Senate Introduced and read first time SJ-9
01/28/92 Senate Referred to Committee on Judiciary SJ-9
01/29/92 Senate Recalled from Committee on Judiciary SJ-85
01/29/92 Senate Committed to Committee on Banking and Insurance SJ-85
03/12/92 Senate Committee report: Favorable with amendment
Banking and Insurance SJ-12
04/23/92 Senate Special order SJ-38
04/28/92 Senate Debate interrupted SJ-132
05/19/92 Senate Debate interrupted SJ-32
CORRECTED AND REPRINTED
Indicates Matter Stricken
Indicates New Matter
COMMITTEE REPORT
March 12, 1992
S. 1231
Introduced by SENATORS Saleeby, Pope, Land, Mullinax and
McConnell
S. Printed 3/16/92--S.
Read the first time January 28, 1992.
THE COMMITTEE ON BANKING AND
INSURANCE
To whom was referred a Bill (S. 1231), to amend Section 42-7-50,
Code of Laws of South Carolina, 1976, relating to participation under
the State Workers' Compensation Fund, etc., respectfully
REPORT:
That they have duly and carefully considered the same, and
recommend that the same do pass with amendment:
Amend the bill, as and if amended, by striking all after the title and
inserting therein:
/ Whereas the General Assembly of South Carolina finds that there
is a substantial risk that the workers' compensation insurance market in
this State could collapse, leaving South Carolina employers with no way
to comply with laws requiring them to insure workers against work place
injuries; and
Whereas, twenty-five states have created state workers' compensation
funds to protect against such threats; and
Whereas, the State of South Carolina has a State Workers'
Compensation Fund that is not currently authorized to write such
coverage for any private insurance risks; and
Whereas, the Budget and Control Board should be enabled to
authorize the State Workers' Compensation Fund to write coverage for
private risks if market conditions should deteriorate to the point that this
is required to meet the needs of employers in this State. Now,
Therefore,
Be it enacted by the General Assembly of the State of South
Carolina:
SECTION 1. Section 42-7-50 of the 1976 Code is amended to
read:
"Section 42-7-50. (A) Any A
county or municipality in the State or any, an
agency or institution thereof shall have of a county or
municipality, and, subject to subsection (B), any other employer in this
State has the option of participating under the provisions of
this article but. However, no county,
municipality, agency or institution thereof shall be employer
is covered by the workers' compensation insurance provided in this
article until payment of the annual charge provided in this title shall
have been is made to the fund, nor shall any county,
municipality, agency or institution thereof may an employer
be covered by this insurance after the lapse of the period for which the
annual charge has been paid. The director shall notify
bill each county, municipality, agency or institution
thereof covered employer at least thirty days before the
expiration date of its coverage in order that the county, municipality,
agency, or institution employer may keep its insurance in
force continuously. If the billed premium payment is not received
by the fund by the commencement of the next coverage period, the
director shall notify the employer and the commission promptly that
coverage through the fund has expired.
(B) The option of private employers to participate under the
provisions of this article may be exercised only after:
(1) a plan of operation has been developed by the fund and
approved by the Chief Insurance Commissioner, the Workers'
Compensation Commission and the Budget and Control Board; and
(2) funds required to establish an appropriate reserve and properly
process the anticipated new business under the plan of operation have
been approved by the Budget and Control Board; and
(3) the Budget and Control Board has declared that the private
workers' compensation insurance market has collapsed or is no longer
adequate to meet the needs of employers in this State.
(C) The plan of operation must be completed within twelve
months from the effective date of this act and must provide for:
(1) an actuarially sound initial reserve as recommended by the
funds consulting actuary;
(2) initially awarding contracts to private companies, pursuant to
the provisions of the Procurement Code, to underwrite workers'
compensation insurance, adjust and pay losses with respect thereto or to
administer loss control and cost containment programs on behalf of the
fund;
(3) a formal application for workers' compensation insurance to
be made directly by a qualified employer or by any licensed property
and casualty agent or broker on behalf of such employer;
(4) a reasonable commission to be paid to agents who write
applications for the fund;
(5) initial minimum standards regarding loss control and cost
containment which the fund may impose on employers as an
underwriting criteria for initial and renewal policies; and
(6) such additional provisions as the Budget and Control Board
might require to ensure a financially and actuarially sound
implementation of the plan of operation should it be required.
(D) The Budget and Control Board is directed to provide
for immediate funding sufficient to develop the plan of operation. The
funding to implement the plan as specified in item (2) of paragraph (B)
of this section shall be authorized by the board if and when it makes the
emergency determination specified in item (3) of paragraph (B) of this
section.
(E) (1) At the end of each three years of operation, and at any
other time considered prudent, the Chief Insurance Commissioner shall
examine the affairs of the private employer business of the fund and
make findings and recommendations as provided by this section. For
purposes of examination, the commissioner or persons making the
examination has free access to all relevant records, books, and papers in
the possession of any person or entity and may summon, administer
oaths to, and examine as witnesses any persons in relation to matters
relevant to the examination.
(2) The Chief Insurance Commissioner shall examine all methods of
operation of the private employer business of the fund to determine
whether the funds are being administered in accordance with sound
insurance practices and in the best interest of the State. Following
examination, the Chief Insurance Commissioner shall prepare a report
for submission to the State Budget and Control Board, the Speaker of the
House of Representatives, and the President of the Senate containing his
findings and conclusions and any recommendations to improve the
efficiency, effectiveness, and overall operations of the fund."
SECTION 2. Section 42-7-70 of the 1976 Code is amended to
read:
"Section 42-7-70. The rates and premiums paid by
employers insured in the fund shall must not be
excessive, inadequate, or unfairly discriminatory. Employers may be
grouped by classifications for the establishment of rates and minimum
premiums, and classification rates may be modified to produce rates for
individual employers in accordance with rating laws which establish
standards for measuring any variations in hazards or expense
provisions, or both, that can be demonstrated to have a probable effect
upon losses or expenses. All premiums
Premiums collected by the fund shall must be
deposited by it in the State Treasury to the credit of the State Workers'
Compensation Fund. The premiums collected and investment
income from private employers must be determined, maintained, and
accounted for separately from premiums of governmental entities. The
fund must pay a premium tax on private employer premiums as provided
in Section 38-7-50."
SECTION 3. This act takes effect upon approval by the
Governor. /
Amend title to conform.
JOHN A. MARTIN, for Committee.
A BILL
TO AMEND SECTION 42-7-50, CODE OF LAWS OF SOUTH
CAROLINA, 1976, RELATING TO PARTICIPATION UNDER THE
STATE WORKERS' COMPENSATION FUND, SO AS TO INCLUDE
EMPLOYERS WITH TWENTY-FIVE OR FEWER EMPLOYEES AT
THE TIME OF INITIAL COVERAGE, PROVIDE FOR
NOTIFICATION WHEN COVERAGE EXPIRES, AND PROVIDE
FOR PRIVATE EMPLOYERS TO EXERCISE THEIR OPTION TO
PARTICIPATE; AND TO AMEND SECTION 42-7-70, RELATING
TO RATES AND PREMIUMS PAID BY PARTICIPANTS, SO AS TO
REQUIRE PREMIUMS COLLECTED AND INVESTMENT INCOME
FROM PRIVATE EMPLOYERS TO BE DETERMINED,
MAINTAINED, AND ACCOUNTED FOR SEPARATELY FROM
PREMIUMS OF GOVERNMENTAL ENTITIES.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Section 42-7-50 of the 1976 Code is amended to read:
"Section 42-7-50. (A) Any A
county or municipality in the State or any, an
agency or institution thereof shall have of a county or
municipality, and, subject to subsection (B), another employer in the
State with twenty-five or fewer employees at the time of initial coverage
with the State Workers' Compensation Fund has the option of
participating under the provisions of this article
but. However, no county, municipality,
agency or institution thereof shall be employer is covered
by the workers' compensation insurance provided in this article until
payment of the annual charge provided in this title shall have
been is made to the fund, nor shall any county,
municipality, agency or institution thereof may an employer
be covered by this insurance after the lapse of the period for which the
annual charge has been paid. The director shall notify
bill each county, municipality, agency or institution
thereof covered employer at least thirty days before the
expiration date of its coverage in order that the county, municipality,
agency, or institution employer may keep its insurance in
force continuously. If the billed premium payment is not received
by the fund by the commencement of the next coverage period, the
director shall notify the employer and the commission promptly that
coverage through the fund has expired.
(B) The option of private employers to participate under this
article may be exercised only after the General Assembly provides for
an initial reserve of four hundred thousand dollars and to the extent that
sufficient staff and expenditures are authorized to process properly the
additional business contemplated. After that time the option must be
restricted by the fund as necessary to maintain a minimum of fifty
percent mix of premium volume from private employers whose present
or last coverage is or was in the voluntary market. The option is further
subject to compliance with reasonable loss control and cost containment
requirements established by the fund to reduce injuries and contain costs
of the system. The initial reserve advanced by the State must be repaid
to the State when an appropriate reserve has been established from
private employer premiums."
SECTION 2. Section 42-7-70 of the 1976 Code is amended to read:
"Section 42-7-70. The rates and premiums paid by
employers insured in the fund shall must not be
excessive, inadequate, or unfairly discriminatory. Employers may be
grouped by classifications for the establishment of rates and minimum
premiums, and classification rates may be modified to produce rates for
individual employers in accordance with rating laws which establish
standards for measuring any variations in hazards or expense
provisions, or both, that can be demonstrated to have a probable effect
upon losses or expenses. All premiums
Premiums collected by the fund shall must be
deposited by it in the State Treasury to the credit of the State Workers'
Compensation Fund. The premiums collected and investment
income from private employers must be determined, maintained, and
accounted for separately from premiums of governmental
entities."
SECTION 3. This act takes effect upon approval by the Governor.
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