La. Admin. Code tit. 40 § I-1713

Current through Register Vol. 50, No. 11, November 20, 2024

Section I-1713 - Contract of Excess Insurance

A. Aggregate and specific excess insurance with liability limits and retention amounts acceptable to the Office of Workers' Compensation shall be required as a condition of approval of any individual self-insurer as hereinafter provided.

1. The retention of specific excess policies shall be no more than $250,000 or one percent of the self-insurer's net worth, whichever is greater. The maximum retention so calculated shall be rounded to the nearest $50,000. Acceptable retention levels, subject to the above maximum, shall be determined by the office for each self-insurer. Such acceptable retention shall be based on an evaluation of the self-insurer's financial condition and exposure to loss.

2. In cases where the upper limit of a corporation's excess insurance is not statutory, the Office of Workers' Compensation will require that the amount be at least the greater of the average incurred workers' compensation losses for the last three years or $5,000,000.

B. No contract or policy of excess insurance shall be recognized by the office in considering the ability of an applicant to fulfill its financial obligation under the Workers' Compensation Act unless such contract or policy:

1. is issued by a recognized, admitted or approved casualty insurance company with a financial rating as shown in the most current issue of Best's Key Rating Guide, Property-Casualty of not less than "B" and "IV;"

2. is not cancelable except upon 20 days written notice by registered or certified mail to the other party to the policy and the Office of Workers' Compensation. The required notice is 10 days if the cancellation is for non-payment of policy premium; and

3. is renewable at the expiration of the policy period unless written notice by registered or certified mail is given to the other party to the policy and the Office of Workers' Compensation, 20 days prior to such expiration, by the party desiring to cancel or not to renew the policy. The required notice or nonrenewal is 10 days if the nonrenewal is for nonpayment of policy premium.

C. Additionally, a contract or policy of excess insurance containing any commutation clause shall only be recognized by the office in considering the ability of an applicant to fulfill its financial obligation under the Workers' Compensation Act where the office is satisfied that sufficient security is provided to assure future payments of compensation to employee(s) entitled thereto.

La. Admin. Code tit. 40, § I-1713

Promulgated by the Department of Employment and Training, Office of Workers' Compensation, LR 17:961 (October 1991).

AUTHORITY NOTE: Promulgated in accordance with R.S. 23:1168 of Act 938 of 1988 Regular Session.