054.00.97 Ark. Code R. 001
Neither the Plan Administrator(s) nor the servicing carrier(s) shall have a responsibility to determine whether the putative voluntary offer of coverage is truly "voluntary", but any agent or broker and any insurer knowingly submitting an offer of workers compensation coverage to an employer which does not meet the above definition of a bona fide "voluntary offer" may be in violation of Ark. Code Ann. §§ 23-66-205 et. seq. and Section 16.D. of this Rule and Regulation.
The following rules will govern the insuring of employers who are in "good faith entitled to workers' compensation insurance" as defined herein, hut who are unable to procure such insurance in a regular manner. For purposes of this Plan, the offer of any reasonable rating plan approved for use in this jurisdiction shall be deemed an offer of insurance in a regular manner. Any dispute arising hereunder shall be subject to the dispute resolution procedure provided in this Plan.
Good faith will be presumed in the absence of clear and convincing evidence to the contrary. An employer is not in good faith entitled to insurance if any of the following circumstances exist at the time of application or thereafter, or other evidence exists that such employer is not in good faith entitled to insurance.
Within sixty (60) days preceding the date of application, the employer must have applied for workers' compensation coverage and have been rejected by at least two (2) insurers, specifically including, where applicable, the insurer providing coverage to the employer at the time of application.
Within sixty (60) days preceding the date of application, the employer must not have rejected a "voluntary offer of coverage" from an insurer.
The employer or its representative shall maintain on record for this policy period the insurer name, contact person, address, phone number and date of contact for each insurance company with which it applied for workers' compensation coverage and make such information available to the Plan Administrator or servicing carrier upon request.
All policies issued to employers to which this Plan applies shall be written utilizing the classifications, forms, rates, and rating plans approved by the Commissioner and authorized for use in the residual market by the Plan Administrator.
The employer or its representative shall forward an application to the Plan Administrator using one of the submission methods established by the Plan Administrator.
The employer or its representative may request an effective date not later that sixty (60) days from the date of application; however, such requested effective date shall be the later of the following options:
If the producer forwards via U.S. mail a signed application to the Plan Administrator with a check payable to the Plan Administrator for the estimated annual or initial deposit premium, coverage will be bound at 12:01 a.m. on the day following the postmark on the envelope in which the application is mailed, including the estimated annual or deposit premium, or the expiration of existing coverage. If U.S. mail is used and/or there is no postmark, or if the application does not contain the required information as described in the Assigned Risk Supplement to the Basic Manual, provisions for securing a requested effective date as stated above and rules for binding coverage as stated in paragraph (1) below shall apply.
Subject to the review by the servicing carrier, employers which were formerly self-insured shall secure a requested effective date no later than 12:01 a.m. sixty (60) days following receipt by the Plan Administrator of a complete and eligible application.
In order to promote competition among servicing carriers and to improve the service thereof, the employer applying for initial coverage or renewal coverage within the Plan may strike up to a maximum of six (6) servicing carriers from the list of active-eligible servicing carriers then maintained, by the Commissioner and the Plan Administrator as provided on the Appendix A to the application.
Upon receipt of the application, the Plan Administrator shall review it for eligibility and completeness. The Plan Administrator may request additional information at its discretion to establish eligibility, to assign appropriate classification codes, to calculate applicable premium, and to otherwise appropriately process the application, Such information may include tax documentation, ownership information, contracts, or any other information deemed necessary to process the application. The employer and/or its representative shall provide this information/documentation, or provide an acceptable explanation for failure to provide the requested items within the timeframe established by the Plan Administrator.
Incomplete applications received by the Plan Administrator may, at the discretion of the Plan Administrator, be returned to the employer or its representative for completion or, with notice to the employer or its representative, may be retained by the Plan Administrator pending receipt of further information. Failure to comply in a timely manner with a request from the Plan Administrator may result in the rejection of the application.
Except as indicated on the binder/verification page, all assignments under this Plan are to be made on an intrastate basis. However, any employer desiring insurance for operations in states other than those covered by its servicing carrier may request its servicing carrier to furnish insurance in the additional state in accordance with the Interstate Assignments section of this Plan. Plan policies affording coverage on operations in more than one (1) state must clearly indicate the premium developed for each state separately.
Assignments shall not knowingly be made under this Plan unless all undisputed workers' compensation premium obligations on any previous insurance have been met by the employer whether the obligation is to a servicing carrier or voluntary insurer.
After the application has been reviewed and eligibility has been determined, the Plan Administrator shall calculate the initial or deposit premium (depending on state payment options) and inform the employer, its representative, or the producer of the applicable premium, using the submission options identified by the Plan Administrator.
Note: See individual state Special Rules pages of the Basic Manual for Workers' Compensation and Employers' Liability Insurance for applicable initial or deposit premium rules.
The producer or employer must submit the total required initial or deposit premium to the Plan Administrator, using one of the submission methods approved by the Plan Administrator. The required initial or deposit premium must be received within the timeframe established by the Plan Administrator in order for coverage to be bound on the requested effective date.
The effective date on the binder will be the secured effective date determined in the section entitled "Securing a Requested Effective Date" only if all of the following occur:
Coverage will not be bound by the Plan Administrator without a complete signed application and receipt of the appropriate deposit or initial premium.
The binder/verification page shall be sent to the insured, producer and servicing carrier and shall remain in effect until canceled or a policy has been issued. In accordance with Plan procedures, coverage shall not exist if a binder was not issued.
If the employer is dissatisfied with the servicing carrier, the employer may request reassignment to another insurer not less than thirty (30) days nor more than sixty (60) days prior to the expiration of the current policy unless otherwise approved by the Plan Administrator. The employer must submit a new application in accordance with the section entitled "Securing a Requested Effective Date."
The employer must also provide the Plan Administrator with an acceptable reason or reasons for the request with appropriate documentation. The request for reassignment is subject to approval by the Plan Administrator and the reassignment shall be made on random basis.
The servicing carrier shall pay a fee to the licensed producer designated by the employer on new and renewal policies upon payment and receipt of premium due under the policy. The producer fee shall be based on the state standard premium charged and collected, and will be paid at the rate filed by the Plan Administrator with the Commissioner.
The employer may designate a licensed producer, and with respect to any renewal of the assigned insurance, may change the designated producer by notice to the servicing carrier prior to the date of renewal or, with the consent of the servicing carrier, at any other time.
Additional coverages may be available to the employer through the servicing carrier. See the WCIP Supplement printed at the end of the Plan for those coverages available in each state.
The policy shall be issued for a term of at least one (1) year, unless insurance for a shorter term has been requested. A short-term policy may be obtained only once within a twelve (12)-month period unless agreed to by the servicing carrier.
A servicing carrier shall, however, have the right to cancel prospectively upon ten (10) days' written notice if the cancellation is for nonpayment of premium when due. A servicing carrier shall have the right to extend the notice of cancellation if provided reasonable assurance of payment by the employer, but it may not extend the original due date by more than a total of thirty (30) days.
The servicing carrier shall proceed according to Arkansas Code § 11-9-408(b) in canceling any binder or policy issued under the Plan, including the requisite notices to the employer and to the Workers Compensation Commission. All notices of cancellation shall state the hour and date at which the cancellation is to be effective. If, however, the employer procures other insurance or becomes self-insured as provided by law within the notice period, the cancellation date of the policy being cancelled shall be the effective date of the replacement coverage.
All insurers licensed to write and actually writing workers compensation insurance in this State are required to participate in this Plan and subscribe to the Articles of Agreement for this State. Any assessment that may be required of such carriers by reason of Ark. Code Ann. § 23-67-204(a)(6) may be offset to the extent provided under the terms of the "Take Out Credit Program" Rating Plan of the National Council on Compensation Insurance as approved by the Commissioner.
Insurers which, prior to this Regulation, provided coverage on a direct assignment basis shall continue to be responsible for all obligations arising from such operations with no reinsurance available through the Articles of Agreement.
Commencing with the effective date of this Regulation, all direct assignment carriers shall be required to participate in the Articles of Agreement. All former direct assignment carriers shall, during policy year 1994, participate in the Pool; with respect to assessments and refunds, on a prorated basis which recognizes the number of months as a Pool member in relationship to the twelve month period.
Whenever the Plan Administrator, with the consent of the Commissioner, determines the capacity of servicing carriers to handle assignments made pursuant to this Plan and this Rule and Regulation falls below a level which is adequate to handle all the assignments being made, the Commissioner may, if an adequate number of servicing carriers have not voluntarily made themselves available, appoint such number of qualified insurers as are reasonably necessary to service the needs of Arkansas employers under the Plan.
- verification of ongoing Plan eligibility of the employer
- timely and accurate issuance of policies and endorsements
- timely and accurate filings with administrative agencies, as required
- maintenance of premiums on policies consistent with manual rules, rates, rating plans, and classifications
- timely and accurate completion and billing of final audits
- collection of premium
- claim services, including investigation, disability management, and medical cost control
- loss control services and safety information to encourage employers to make safety a part of their business
- Cooperation with the Commissioner and with the Workers Compensation Commission and Arkansas Department of Labor in carrying out and effectuating the safety mandates of Act 796 of 1993 and such Rules and Regulations as may be promulgated thereunder
- payment of producer fees
- issuance of renewal proposals and non-renewal notices
- assurance of insured and insurer compliance with all terms and conditions of policy contract
- resolution of complaints and response to insured/producer inquiries
- reporting financial and statistical data to producers and insureds, as well as to the Commissioner
- requirement to consult with and keep insureds apprised of developments in incurred claim cases;
The Plan Administrator shall also be responsible for determining the expenses for the operation of the Plan, exclusive of the Plan Administrator's expenses incurred in connection with responsibilities it has under the Articles, and shall assess each insurer participating in the Plan for those expenses on an equitable basis as determined by the Plan Administrator and approved by the Commissioner,
Further, and within ninety (90) days following the end of the fourth quarter of 1994, and annually thereafter, the Plan Administrator shall file with the Commissioner a performance review and evaluation of each servicing carrier in accord with the "Performance Standards and Procedures for Measuring Servicing Carrier Performance" in Section 12 and the criteria set forth in paragraph D(5) above.
With respect to the servicing carriers appointed by the Plan Administrator and approved by the Commissioner, the following shall apply:
The written "Performance Standards and Procedures for Measuring Servicing Carrier Performance" hereunder are those currently in effect and and are those established by the Council, All of which said provisions are expressly incorporated herein and made a part hereof; such Performance Standards and Procedures for Measuring Servicing Carrier Performance may be amended and supplemented from time to time with the prior, express written approval of the Commissioner; provided, however, that no servicing carrier shall be subjected to the administrative fine or penalty provided for in subparagraph (7) hereof as to any particular performance standard of which it has not had at least three (3) month's notice. All servicing carriers shall be deemed to have Notice upon the Plan Administrator's receipt of approval from the Commissioner.
A servicing carrier unable to provide insurance for an employer in additional states in accordance with this Section 13.B. or unwilling to write voluntary coverage in accordance with Section 13.A., shall refer the request to the Plan Administrator which shall re-assign the employer to a servicing carrier or carriers that is/are able to provide coverage in accordance with this Section 13.A. and Section 13.B..
In the event coverage in another state cannot be obtained in the fashion as set forth above, then the services as rendered by employees of the Arkansas employer shall be deemed to be services rendered pursuant to a contract of "employment in this State" as provided by Ark. Code Ann. § 11-9-102(12) and as amended by Section 2 of Act 796 of 1993, and the servicing carrier shall provide coverage for such operations under this Plan and under the mandate of Ark. Code Ann. § 11-9-404(a)(1); PROVIDED, HOWEVER, that in the event any employee of any such employer incurs an injury or occupational disease compensable under the law of such other State, elects to recover under such laws and is finally successful in so doing, the servicing carrier shall be entitled to recoup from such employer the additional premium, if any, that would have been billed to that employer for the services of that employee in that other State by:
The rates, rating plans, classifications, and policy forms used to provide coverage in Arkansas shall be those that are applicable to residual market risks in this State and are on file and have been approved by the Commissioner.
The Administrator of the other Plan is authorized to assign employers with operations in Arkansas to the other Plan's servicing carriers subject to the following conditions:
Pursuant to the provisions of Ark. Code Ann. § 11-9-408(d) [as added by §12 of Act 796 of 1993] and Ark. Code Ann. § 23-67-211 [as added by §1 of Act 1269 of 1993] the Plan Administrator shall develop and administer a plan for the issuance of multiple coordinated policies of workers' compensation and employers' liability insurance subject to the approval of the Commissioner. Such multiple coordinated or group policies may only be issued to cover groups containing no fewer than five (5) separate employers who shall not be affiliated with one another in terms of ownership, control, or right to participate in the profits of an affiliated enterprise. The "sponsor" or administrator of such policies must either be a general contractor meeting the financial capacity and continuity guidelines as shall be set forth in the rating plan and approved by the Commissioner or a recognized industry association which is incorporated or organized as a not-for-profit corporation or association and which has been in existence for no fewer than three (3) years prior to application for approval as a "sponsor". Further,
Multiple coordinated policies shall be issued in the name of each employer but delivered to the sponsor, and all premiums shall he calculated upon the wages paid to or received by the employers in accordance with Plan Rules. All claims experience shall be identified to each employer and records maintained relative thereto by the Plan Administrator, including experience modifiers as appropriate.
The Plan Administrator shall develop and provide to the Commissioner detailed procedures for the equitable distribution of employers under this Plan to servicing carriers. These procedures shall provide for the random distribution of employers based an the amount of estimated premium in the Plan, so far as practicable. The procedures shall also define those circumstances where the Plan Administrator will have the discretion to override the random selection process and shall account for the variations necessitated by the "striking procedure" set forth at Section 6 hereinabove.
Any person affected by the operation of the Plan including, but not limited to, participating companies, employers, producers, and servicing carriers, who may have a dispute with respect to any aspect of the Plan, including rating and classification, eligibility, and auditing disputes and any dispute arising under the Articles of Agreement, may seek a review of the matter by the Plan Administrator by setting forth in writing with particularity the nature of the dispute, the parties to the dispute, the relief sought and the basis thereof. The Plan Administrator, as designee of the Commissioner, may secure such additional information as it deems necessary to make a decision and shall in the instance of disputes involving, comply with all requirements of due process and Ark. Code Ann. § 23-67-119(3) and the Arkansas Appeals Board Objectives and Rules as approved by the Commissioner.
Appeals from employers and insurers on Plan matters regarding employer disputes shall be within the jurisdiction of the mechanism established to handle such appeals under the applicable rating law i.e. Ark. Code § 23-67-119(3). All other disputes shall be handled as follows:
In reviewing any such matter not coming with the scope of Ark. Code Ann. § 23-67-119(3)(B), the Commissioner shall follow those procedures applicable to administrative hearings in this State. The Commissioner shall decide the dispute in accordance with the state law, regulation, and policy and in the interests of the reasonable and proper administration of this Plan. The Commissioner's decision shall be final, subject to court review under Ark. Code Ann. § 23-61-307.
If the dispute relates to the expulsion of a participating company under the Articles of Agreement by the Board of Governors, any appeal may be taken directly to the Commissioner without first complying with the procedures contained herein.
It is ultimately essential for maintaining the viability of the Plan to establish and maintain rates at a level that will permit the Plan to operate as a self-funded mechanism. The Plan Administrator shall maintain necessary ratemaking data in order to permit the actuarial determination of rates and rating plans appropriate for the business insured through the Plan. All assigned carriers are required to report their experience on business written under the Plan to the Administrator in a format prescribed by the Council. It is the responsibility of the Plan Administrator to monitor both rate adequacy and Plan results. The Plan Administrator shall notify the Commissioner if excessive losses are indicated to enable the Commissioner to take corrective action.
The Commissioner deems a small deductible policy option to be* "feasible" within the meaning of Ark. Code Ann. § 11-9-813(d), and, accordingly, a Small Deductible Policy Rating Plan which shall be applicable to both the voluntary market and to the WCIP shall be made effective, under which each employer shall have the option, in accordance with the dictates of Ark. Code Ann. § 11-9-813, of applying for coverages which incorporate deductible amounts of no less than $1,000 per incident and further deductibles in further increments of $500 each up to a maximum of $5,000 per incident. The Plan Administrator shall develop an appropriate application incorporating the deductible option and policy form, along with an actuarially sound premium adjustments for submission to and approval by the Commissioner. The Commissioner hereby determines under the dictates of Ark. Code Ann. § 11-9-813(d), however, that it is not "feasible" to require insurers or the Plan Administrator and servicing carriers to ignore claim frequency and/or severity if losses happen to be within the deductible limit chosen by an employer, and, accordingly, there shall be no prohibition against insurers, the Plan Administrator, or servicing carriers using true loss data, including frequency and severity of losses even within deductibles, for purposes of experience rating.
If any provision of this Rule and Regulation, or the application thereof to any person or circumstance, is held invalid, such invalidity shall not affect other provisions or applications of this Rule and Regulation which can be given effect without the invalid provision or application, and to that end the provisions of this Rule and Regulation are severable.
054.00.97 Ark. Code R. 001