287.865. Moneys not deemed state moneys--use of funds--reports to director, when--additional powers of corporation--assessments, division shall levy, amount--no dividends to be paid--bankruptcy, disso - Missouri Statutes

Moneys not deemed state moneys--use of funds--reports to director,when--additional powers of corporation--assessments, division shalllevy, amount--no dividends to be paid--bankruptcy, dissolution,or insolvency of self-insured member, procedure.

287.865. 1. Moneys collected by or on behalf of the division ofworkers' compensation and dispersed to the corporation shall be vested in thecorporation and shall not thereafter be deemed state property and shall notthereafter be subject to appropriation by the legislature, the treasurer, orany other state agency.

2. All moneys in the insolvency fund, exclusive of administrative costsreasonably necessary to conduct the business of the corporation, as determinedat the discretion of the board, as described in section 287.867, shall be usedsolely to compensate persons entitled to receive workers' compensationbenefits from a Missouri self-insurer which is unable to meet its workers'compensation benefit obligations and to defray the expenses of the fund.

3. The board of directors of the corporation shall direct the investmentof the moneys in the fund, and all returns on the investments shall beretained in the fund. The corporation shall, at the request of the directorof the division, annually submit to an audit by an independent certifiedpublic accountant or by such other person or persons as the director deemssufficient, and a copy of the audit report shall be transmitted to theMissouri division of workers' compensation and to the corporation.

4. The board of directors of the corporation shall, based on suchinformation as is reasonably available, report to the director of the divisionupon all matters germane to the solvency, liquidation, rehabilitation orconservation of any workers' compensation self-insurer and such reports shallnot be deemed public documents under the provisions of section 610.010, RSMo,or any other law.

5. Upon creation of the insolvency fund pursuant to the provisions ofsection 287.867, the corporation is obligated for payment of compensationunder this chapter to insolvent members' employees resulting from incidentsand injuries to the extent of covered claims existing prior to the issuance ofan order of liquidation against the member employer with a finding ofinsolvency which has been entered by a court of competent jurisdiction in themember employer's state of domicile or of this state under the provisions ofsections 375.950 to 375.990, RSMo, in which the order of liquidation has notbeen stayed or been the subject of a writ of supersedeas or other comparableorder; or prior to the date of determination by the board of directors thatthe member employer has fully expended all surety bonds, insurance orreinsurance, and all other available assets and is not able to paycompensation benefits at that time. All incidents giving rise to claims forcompensation under this chapter must occur during the year in which suchinsolvent member is a member of the guaranty fund and was assessable pursuantto the plan of operation, except as provided for certain claims existing priorto August 28, 1992, pursuant to the provisions of subsection 7 of thissection, and the employee must make timely claim for such payments accordingto procedures set forth by a court of competent jurisdiction over thedelinquency or bankruptcy proceedings of the insolvent member. Any proceedsderived by such claim of the employee in bankruptcy shall be an offset of anyamounts due and owing to the employee under the workers' compensation law.Any such obligation of the corporation includes only the amount due theinjured worker or workers of the insolvent member under this chapter. In noevent is the corporation obligated to a claimant in an amount in excess of theobligation of the insolvent member employer. The corporation shall be deemedthe insolvent employer for purposes of this chapter to the extent of itsobligation on the covered claims and, to such extent, shall have all therights, duties, and obligations of the insolvent employer as if the employerhad not become insolvent. However, in no event shall the corporation beliable for any penalties or interest. The division, upon notice of aself-insured member filing bankruptcy, liquidation, or dissolution, shallnotify in writing any employee of the self-insured member, who has an openclaim for compensation or first report of injury filed with the division, atthat employee's last known address of his or her obligation to file a proof ofclaim with the court of jurisdiction and of the need of the employee toprovide the guaranty fund and the division with the records set out in thissection. Any claimant claiming benefits under this chapter against aninsolvent self-insured member of the Missouri Private Sector and IndividualGuaranty Corporation shall, before the division of workers' compensation forthe state of Missouri attaches jurisdiction, file with the bankruptcy courthaving jurisdiction over the bankruptcy of the self-insured employer, a proofof claim or other claim forms required by the appropriate bankruptcy court tosecure a claim against the bankrupt employer. Any such claimant shall provideto the Missouri private sector self-insurance guaranty corporation and to thedivision of workers' compensation a copy, certified by the bankruptcy court,attesting to the filing of such claim or claim forms. Certification shallinclude the date of alleged loss alleged against the bankrupt employer;description of injuries claimed; and date the claim or claims were filed withthe bankruptcy court. Failure of the claimant to provide such informationshall bar the division from invoking jurisdiction over any matter for which anemployee may otherwise be entitled to benefits under this chapter.

6. The corporation may:

(1) Request that the director revoke any member employer's authority toact as a qualified private sector individual self-insurer if the self-insurermember fails to maintain membership in the corporation or fails to pay theassessments levied by the division under sections 287.860 to 287.885;

(2) Sue or be sued, including appearing in, prosecuting or defending andappealing any action on a claim brought by or against the corporation. Thecorporation shall have full rights of subrogation against any source ofpayment or reimbursement for payments by the corporation on behalf of aMissouri workers' compensation self-insurer. The corporation shall have aright of recovery through the maintenance of an action against any thirdparty, other than a coemployee, who is in any way responsible or liable forinjury or death to a covered worker. The corporation is also authorized totake all necessary action, including bringing an action at law or in equity toseek any available relief, including any action against any workers'compensation self-insurer, where the self-insurer has not paid all assessmentslevied by the division or the board of directors of the corporation. If thecorporation is required to bring an action at law or in equity to enforce anyobligations, rights or duties as regards a workers' compensation self-insurer,the court may award reasonable attorney's fees and costs to the corporation;

(3) Employ or retain such persons, including utilization of an in-houseor a third-party administrator, fund manager, attorney, certified publicaccountant, auditor or other such person, and sufficient clerical staff,experts, professional staff and equipment, including sharing clerical staffand other costs with the division upon a mutually agreed upon paid basis, asare necessary to handle the claims and perform other duties of thecorporation;

(4) Borrow funds, including authority to issue bonds or purchase excessor any appropriate insurance or reinsurance, necessary to effectuate thepurposes of sections 287.860 to 287.885 or to protect the assets of this fundand the members of the board and their employees in accordance with the planof operation;

(5) Negotiate and become a party to such contracts and perform suchother acts as are necessary or proper to effectuate the purpose of sections287.860 to 287.885;

(6) Become members of any trade association whose purpose includesfurthering the understanding of the self-insurance industry in the state ofMissouri, including the National Council of Self-Insurers, or otherappropriate state, regional or national organizations;

(7) Review, on its own motion, or at the request of the director, allapplications for initial and for membership renewal in the corporation,including financial or other appropriate background studies, actuarialstudies, and other information or guidelines as may be necessary to ensurethat the member is fully complying with the privileges of self-insurance. Itshall be the primary duty of the division to provide adequate staff andequipment and technical assistance to thoroughly review initial applicationsand membership renewals through budgeted funds and initial applications andmembership renewal application fees. The corporation, however, shall have theright to, in difficult cases or situations where the work load cannot beadequately done without the help of the corporation, to assist in anyassessment of any applicant;

(8) Issue opinions prior to a final determination by the division ofworkers' compensation as to whether or not to approve any applicant formembership in the corporation, to the division concerning any applicant, whichopinions shall be considered by the division;

(9) Charge an applicant, in addition to the applicant's assessment, forinitial or membership renewal in the corporation, a fee sufficient to coverthe actual cost of examining the financial and safety conditions of theapplicant.

7. To the extent necessary to secure funds for the payment of coveredclaims and also to pay the reasonable costs to administer them, the division,upon certification of the board of directors, shall levy assessments based onthe annual modified standard premium, provided that no such assessments shallever exceed, in the aggregate, from all members, an amount in excess of onemillion dollars at any given time, exclusive of all new members' assessmentsin the amounts collected for same, as is set forth in the plan of operationpursuant to the provisions of section 287.870. Such assessments shall be madeat a maximum annual assessment of one-sixth of one percent of the annualmodified standard premium. The initial assessment shall be for an amountequal to six hundred thousand dollars, the amount of such fee to be leviedover a three-year period, one-third of the six hundred thousand dollars to becollected and received the first year, one-third to be collected and receivedin the second year, and one-third to be collected and received in the thirdyear, the first year to commence as of the date of incorporation, assessmentsto be prorated on an annualized basis. The director of the division shallannually certify to the corporation the assessment percentage due from themembers of the corporation. The director of the division and the board of thecorporation shall within the procedures as specified in this section and asestablished for the premium tax billings, as provided in sections 287.690,287.710, 287.715 and 287.730, notify, assess, and receive the assessments duefrom those members for the prior calendar year ending on the thirty-first dayof December, with the exception that this annual assessment shall be payablein full on or before the first day of March directly to the corporation. Thedepartment of insurance, financial institutions and professional registrationshall make available to the corporation or director of the division data onthe self-insured employer's workers' compensation administrative tax data foruse in verification of the assessment as provided in this section. Ifassessments provided in this section are not paid, the corporation shallcertify the fact to the division. Out of the first amounts assessed, thereshall be set aside an amount equal to fifty thousand dollars, which shall beapplied retroactively, before August 28, 1992, to be used and applied for thebenefit of employees who have open, outstanding claims, in existence, whichhave not already been fully and completely settled or for which there has beenan award of judgment rendered, and for which there are moneys due and owing.The amount of payment and allocation of funds shall be within the exclusivediscretion of the director, such payments to be made on a reasonably timelybasis, as the director received funds for such purpose. In addition, thereshall be no reassessments against any member unless the director feels thecurrent balance of the fund is insufficient or, after deducting the amountpaid for or reserved for outstanding claims and for administrative and othercosts in managing the corporation, the amount held shall be less than fourhundred thousand dollars, at which point the director shall raise assessmentssufficient to bring the minimum amount of the fund back up to six hundredthousand dollars or such other amount not to exceed, in any event, one milliondollars based upon a maximum annual assessment of one-sixth of one percent ofthe annual modified standard premium as shall be necessary to effectuate thepurposes of the corporation at that time.

8. Every assessment shall be made on a uniform percentage of the figureapplicable, provided that the assessment levied against any self-insurer inany one year shall not exceed one-sixth of one percent of the annual modifiedstandard premium during the calendar year preceding the date of theassessment. Assessments shall be remitted to and administered by the board ofdirectors in the manner specified by the approved plan. Each employer soassessed shall have at least thirty days' written notice as to the date theassessment is due and payable. The corporation shall levy assessments againstany newly admitted member of the corporation on the basis of contributionunder the plan of operation as provided in section 287.870 and the applicablerules and regulations established pursuant thereto.

9. If, in any one year, funds available from such assessments, togetherwith funds previously raised, are not sufficient to make all the payments orreimbursements then owing, the funds available shall be prorated, and theunpaid portion shall be paid as soon thereafter as sufficient additional fundsbecome available.

10. No state funds of any kind shall be allocated or paid to thecorporation or any of its accounts except those state funds accruing to thecorporation by and through the assignment of rights of any insolvent employer.

11. All moneys, property and other assets received, owned or otherwiseheld by the corporation shall be held in such a way as to safeguard thecorporation's ability to assure that the purpose and objectives of thecorporation shall be advanced and that moneys needed to pay claims toemployees of an individual insolvent self-insurer in the private sector shallbe preserved.

12. Income derived from the corporation assets and investments shallvest in the corporation and shall not inure, under any circumstances, to thebenefit of any member, the division of workers' compensation or any of itsemployees, or any other party other than an employee. The corporation mayreinvest that income as otherwise provided for investing corporation assets.All such investments of corporation income shall be made in such a way as toensure the welfare of the employees of the private sector individualself-insurers that are financially unable to meet their workers' compensationbenefit obligations. In the event that the corporation shall be dissolved,any surplus income previously held by the insolvency fund shall be held intrust for the benefit of the employees of insolvent private sector individualself-insurers in the state of Missouri.

13. The corporation and the insolvency fund shall pay no dividends,rebates, interest, or otherwise distribute any corporation or fund income toany of its members.

(L. 1992 H.B. 975, A.L. 1993 S.B. 251, A.L. 2005 S.B. 1 & 130)