2015 Kentucky Revised Statutes CHAPTER 304 - INSURANCE CODE Subtitle 50 - Workers' Compensation Self-Insured Groups 50.50-090 Membership -- Indemnity agreement -- Expulsion, nonrenewal, or cancellation of member by group -- Voluntary withdrawal -- Liability on termination of membership, insolvency, or bankruptcy.
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304.50-090
Membership -- Indemnity agreement -- Expulsion, nonrenewal, or
cancellation of member by group -- Voluntary withdrawal -- Liability on
termination of membership, insolvency, or bankruptcy.
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An employer joining a workers’ compensation self-insured group after the
group has been issued a certificate of filing shall submit an application for
membership to the board of trustees or its administrator and enter into an indemnity
agreement. Membership shall not take effect earlier than each member's date of
application. The application for membership and its approval shall be maintained as
permanent records of the board of trustees. The board of trustees shall require each
member to execute a joint and several liability agreement, or other annual
ratification or affirmation of indemnity, upon each renewal.
The self-insured group shall be considered an individual employer for all purposes
of taxation and the individual members of the group shall not be exposed to tax
liability other than liability existing as a result of the indemnity agreement with the
other group members and the self-insured group.
At the discretion of the trustees, the self-insured group may include the Kentucky
employees of foreign (out-of-state) employers.
Individual members of a workers’ compensation self-insured group shall be
subject to expulsion, nonrenewal, or cancellation by the group by giving the
member and the commissioner of the Department of Workers' Claims thirty (30)
days advance notice. Such expulsion, nonrenewal, or cancellation shall be executed
in accordance with the bylaws of the group and for reasons including but not limited
to:
(a) Adverse claims experience;
(b) Lack of cooperation with safety and loss prevention policies; or
(c) Failure to report payroll in accordance with the rules and rating plan of the
self-insured group.
At least thirty (30) days prior to the due date, the trustees shall notify each group
member of all premiums due, including adjustments. Failure by a member to pay
the premium or assessments due prior to the due date may result in immediate
cancellation from the group by the trustees. Ten (10) days advance notice of such
cancellation shall be given to the member and the commissioner of the Department
of Workers' Claims.
Individual group members may elect to withdraw from the group only upon sixty
(60) days written notice to the commissioner of the Department of Workers’
Claims and the trustees.
The trustees shall report to the commissioner any person who behaves fraudulently
as described in Subtitle 47 of this chapter.
A workers’ compensation self-insured group shall pay all workers’
compensation benefits required under KRS Chapter 342 for which each member
incurs liability during its period of membership, including assessments. A member
who elects to withdraw its membership or is terminated by a group remains liable
for workers’ compensation liabilities, obligations, and assessments during the
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terminated or withdrawn group member’s period of membership. A group
member shall not be relieved of its workers’ compensation liabilities incurred,
including assessments, during its period of membership, except through payment by
the group or the member of these liabilities.
The insolvency or bankruptcy of a group member shall not relieve the workers’
compensation self-insured group or any group member of liability for the payment
of workers’ compensation benefits incurred during the insolvent or bankrupt
group member's period of membership.
Effective: July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 1638, effective July 15, 2010. -- Created
2005 Ky. Acts ch. 7, sec. 18, effective March 1, 2005.
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