HB 649 - Workers' comp; group self-ins funds; similar businesses
Georgia House of Representatives - 1995/1996 Sessions
HB 649 - Workers' comp; group self-ins funds; similar businesses
Page Numbers - 1/ 2/ 3/ 4/ 5/ 6/ 7/ 8/ 9/ 10
1. Kinnamon 4th 2. Williams 114th
House Comm: IndR / Senate Comm: /
House Vote: Yeas Nays Senate Vote: Yeas Nays
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House Action Senate
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2/9/95 Read 1st Time
2/10/95 Read 2nd Time
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Code Sections amended: 34-9-151, 34-9-151.1, 34-9-152, 34-9-153, 34-9-158,
34-9-165
HB 649 LC 19 2401
A BILL TO BE ENTITLED
AN ACT
1- 1 To amend Article 5 of Chapter 9 of Title 34 of the Official
1- 2 Code of Georgia Annotated, relating to group self-insurance
1- 3 funds, so as to provide for definitions; to authorize a
1- 4 group or groups of employers engaged in similar business
1- 5 activities to form a fund; to change provisions relating to
1- 6 applications to the Commissioner of Insurance for a
1- 7 certificate of authority to create a fund; to change
1- 8 provisions relating to the annual renewal fee; to change
1- 9 provisions relating to the powers of the board of a fund; to
1-10 change provisions relating to contracts between funds and
1-11 administrators not employed by such funds; to provide for
1-12 related matters; to repeal conflicting laws; and for other
1-13 purposes.
1-14 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION 1.
1-15 Article 5 of Chapter 9 of Title 34 of the Official Code of
1-16 Georgia Annotated, relating to group self-insurance funds,
1-17 is amended by striking Code Section 34-9-151, relating to
1-18 definitions, and inserting in lieu thereof a new Code
1-19 Section 34-9-151 to read as follows:
1-20 "34-9-151. (Index)
1-21 As used in this article, the term:
1-22 (1) 'Administrator' means any individual, partnership,
1-23 or corporation designated and authorized by the board of
1-24 the fund to carry out the day-to-day operations of the
1-25 fund, including, but not limited to, the processing and
1-26 payment of claims.
1-27 (2) 'Basic rate' means the annual premium rate charged
1-28 prior to any credit being given for applicable
1-29 experience debits or credits or for applicable discounts
1-30 or surcharges.
1-31 (3) 'Board of the fund' means the board of trustees of
1-32 any fund created pursuant to this article.
-1- (Index)
LC 19 2401
2- 1 (4) 'Commissioner' means the Commissioner of Insurance
2- 2 of the State of Georgia.
2- 3 (5) 'County' means a county of this state. Such term
2- 4 shall include a consolidated city-county government and
2- 5 any public authority, commission, board, or similar body
2- 6 created or activated by an Act of the General Assembly
2- 7 or by a resolution or ordinance of the governing
- ðÿ34Œ>51.1 ðÿ34™>52 ðÿ34¤>53 34-9-158
2- 9 other political subdivision or subdivisions of this
2-10 state, pursuant to the Constitution of this state or an
2-11 Act of the General Assembly and which carries out its
2-12 functions on a county-wide basis, a multicounty basis,
2-13 or wholly within the unincorporated area of a county.
2-14 (6) 'Fund' means a joint fund for workers' compensation
2-15 established by an authorized trade association or
2-16 professional association or by a group of
2-17 municipalities, counties, school boards, or hospital
2-18 authorities pursuant to this article.
2-19 (7) 'Gross annual premium' means the total annual
2-20 premium determined by multiplying the payroll for the
2-21 applicable workers' compensation job classifications by
2-22 the appropriate annual premium rate for each
2-23 classification.
2-24 (8) 'Hospital authority' means any legally constituted
2-25 board, commission, or authority which has been created
2-26 for the purpose of and is actually governing the
2-27 operation of a public hospital created in accordance
2-28 with the laws of this state.
2-29 (9) 'Intrastate agreement' means the written agreement
2-30 executed by the members of the fund, which agreement
2-31 establishes the fund and provides for its operation and
2-32 through which each member agrees to assume and
2-33 discharge, jointly and severally, any and all liability
2-34 under this article relating to or arising out of the
2-35 operations of the fund.
2-36 (10) 'Member' means an employer who is a member of a
2-37 fund established by a trade association or professional
2-38 association or by a group of municipalities, counties,
2-39 school boards, or hospital authorities in accordance
2-40 with this article. 'Member' also means a trade
2-41 association or professional association which elects to
2-42 cover its own employees under a fund established by its
2-43 members.
-2- (Index)
LC 19 2401
3- 1 (11) 'Municipality' means an incorporated municipality
3- 2 of this state, a consolidated city-county government,
3- 3 and any local public authority, commission, board, or
3- 4 other similar agency which is created by a general or
3- 5 local Act of the General Assembly and which carries out
3- 6 its functions wholly or partly within the corporate
3- 7 boundaries of an incorporated municipality of this
3- 8 state. This term shall also include such bodies which
3- 9 are created or activated by an appropriate ordinance or
3-10 resolution of the governing body of a municipal
3-11 corporation, individually or jointly with other
3-12 political subdivisions of the state.
3-13 (12) 'Normal annual premium' means the standard annual
3-14 premium plus or minus applicable surcharges or
3-15 discounts.
3-16 (13) 'Premium' means any consideration, by whatever name
3-17 called, paid to a fund by a member for coverage under
3-18 the fund.
3-19 (14) 'Professional association' means a corporation or
3-20 unincorporated association which is engaged in
3-21 substantial activity for the benefit of its members,
3-22 other than the sponsorship of a fund operated pursuant
3-23 to this article, and which is comprised of a bona fide
3-24 group of employers who are engaged in the same or in
3-25 substantially similar types of professions and have
3-26 similar governing industry classifications as approved
3-27 by the Commissioner regarding workers' compensation and
3-28 employers' liability insurance.
3-29 (15) 'School board' means a public board of education of
3-30 any county or of any independent school system of this
3-31 state.
3-32 (16) 'Standard annual premium' means the gross annual
3-33 premium plus or minus applicable experience credits or
3-34 debits.
3-35 (17) 'State board' means the State Board of Workers'
3-36 Compensation.
3-37 (17)(18) 'Surplus' means the total assets of the fund
3-38 less its liabilities and reserves as determined in
3-39 accordance with the requirements of this article.
3-40 (18)(19) 'Surplus share' or 'proportionate share' means
3-41 the initial contribution paid to a fund by a member as a
3-42 condition of membership in the fund.
-3- (Index)
LC 19 2401
4- 1 (19)(20) 'Trade association' means a corporation or
4- 2 unincorporated association which is engaged in
4- 3 substantial activity for the benefit of its members,
4- 4 other than the sponsorship of a fund operated pursuant
4- 5 to this article, and which is comprised of a bona fide
4- 6 group of employers who are engaged in the same or in
4- 7 substantially similar types of businesses or professions
4- 8 within this state and who have similar governing
4- 9 industry classifications as approved by the Commissioner
4-10 regarding workers' compensation and employers' liability
4-11 insurance."
SECTION 2.
4-12 Said article is further amended by adding immediately
4-13 following Code Section 34-9-151 a new Code Section
4-14 34-9-151.1 to read as follows:
4-15 "34-9-151.1. (Index)
4-16 Nothing contained in this article shall be construed to
4-17 prevent or constrain a group or groups of employers who
4-18 are engaged in similar business activities and desire to
4-19 form a fund from forming a fund or funds; provided,
4-20 however, that separate classes as provided in Code Section
4-21 34-9-152 may not be commingled in any fund and that such
4-22 funds otherwise comply with the requirements of this
4-23 article."
SECTION 3.
4-24 Said article is further amended by striking Code Section
4-25 34-9-152, relating to application to the Commissioner for
4-26 certificate of authority to create a fund, and Code Section
4-27 34-9-153, relating to the issuance of a certificate of
4-28 authority, in their entirety and inserting in lieu thereof
4-29 new Code Sections 34-9-152 and 34-9-153 to read as follows:
4-30 "34-9-152. (Index)
4-31 (a) Any group of municipalities, counties, school boards,
4-32 or hospital authorities, or any trade association
4-33 associations, or professional association associations, or
4-34 any other group authorized by this article may enter into
4-35 an intrastate agreement for the purpose of extending
4-36 workers' compensation benefits to employees of its members
4-37 and may make application to the Commissioner for a
4-38 certificate of authority to create a fund and provide such
4-39 benefits. Once a fund is established pursuant to such
4-40 intrastate agreement, an officer or administrator of the
-4- (Index)
LC 19 2401
5- 1 fund shall deliver a copy of the intrastate agreement to
5- 2 the Commissioner within ten days of the execution of such
5- 3 agreement by the members. The fund shall provide workers'
5- 4 compensation coverage to the employees of members who
5- 5 deposit moneys for premiums into the fund. On or before
5- 6 the effective date of such coverage, the fund shall file
5- 7 with the State Board of Workers' Compensation the evidence
5- 8 of coverage form required by the board's rules issued
5- 9 pursuant to Code Section 34-9-126.
5-10 (b)(1) For purposes of this article, municipalities,
5-11 counties, school boards, hospital authorities, trade
5-12 associations, and professional associations, any group
5-13 or groups of employers engaged in similar business
5-14 activities shall each be deemed to constitute separate
5-15 classes. Except as provided in paragraph (2) of this
5-16 subsection, no member of any one such class shall join
5-17 with a member of another class or classes for the
5-18 purpose of creating a fund pursuant to this article.
5-19 There shall be only one group self-insurance fund for
5-20 municipalities and only one group self-insurance fund
5-21 for counties; provided, however, if the Commissioner
5-22 determines that there are special or unique
5-23 circumstances or needs of a group of counties or
5-24 municipalities which justify the establishment of an
5-25 additional group self-insurance fund or funds for
5-26 counties or municipalities, he may authorize the
5-27 establishment of such fund or funds.
5-28 (2) A board of education of an independent school system
5-29 of any municipality is authorized to be a member of a
5-30 fund comprised of municipalities.
5-31 (c) A fund must make application to the Commissioner for a
5-32 certificate of authority within 180 days of the date of
5-33 signing an intrastate agreement creating the fund. The
5-34 application shall state that the fund has met the
5-35 requirements of this subsection and the requirements of
5-36 subsections (d) through (f) of this Code section and shall
5-37 state as follows: When applying for a certificate of
5-38 authority, a proposed fund shall file with the
5-39 Commissioner an application setting forth:
5-40 (1) The name of the fund;
5-41 (2) The location of the fund's principal office, which
5-42 shall be maintained within this state;
-5- (Index)
LC 19 2401
6- 1 (3) The location of the principal office of the trade
6- 2 association or professional association or group of
6- 3 municipalities, counties, school boards, or hospital
6- 4 authorities;
6- 5 (4) The names and addresses of the members;
6- 6 (5) The principal business of each member;
6- 7 (6) The name and address of a Georgia resident
6- 8 designated and appointed as the fund's proposed
6- 9 registered agent for service of process in this state;
6-10 (7) The names and addresses of the officers and
6-11 directors of the proposed fund and a statement of
6-12 whether or not any of such officers and directors has
6-13 been convicted of any crimes other than minor traffic
6-14 violations within the last ten years;
6-15 (8) The powers of the officers and directors and the
6-16 term of office of each;
6-17 (9) A brief outline of the method by which the
6-18 administrative obligations of the fund shall be met;
6-19 (10) A copy of the bylaws of the fund;
6-20 (11) A copy of the intrastate agreement among the
6-21 members;
6-22 (12) The name and address of the administrator and, if
6-23 the administrator is a corporation, the names and
6-24 addresses of its officers and directors and a statement
6-25 concerning whether or not the administrator or any of
6-26 the officers or directors thereof, if the administrator
6-27 is a corporation, has been convicted of any crimes other
6-28 than minor traffic violations within the last ten years;
6-29 (13) A statement of the previous experience and
6-30 background of any administrator of the fund, including
6-31 reference to any licenses it may hold or have held in
6-32 this state or any other state within the last ten years;
6-33 (14) The most recent audited statement of the financial
6-34 condition of any administrator of the fund or the most
6-35 recent annual statement of such administrator if it is
6-36 an insurer;
6-37 (15) A copy of any agreements between the fund and any
6-38 contract administrator of the fund;
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LC 19 2401
7- 1 (16) A statement of the financial condition of the fund
7- 2 listing all of its assets and liabilities as of the end
7- 3 of the last preceding month prior to the date of the
7- 4 application on such a form as may be prescribed by the
7- 5 Commissioner;
7- 6 (17) A copy of each contract, endorsement, and
7- 7 application form it proposes to issue or use; and
7- 8 (18) A current, audited financial statement or other
7- 9 acceptable financial statement of each member of the
7-10 fund, which statement shall not be deemed to be a public
7-11 document and which shall be maintained in confidence by
7-12 the Commissioner; and. (19) Such other information, documents, or statements as
7-14 the Commissioner may reasonably require.
7-15 (d) Each application for a certificate of authority shall
7-16 be accompanied by a filing fee of $300.00, which fee shall
7-17 not be refundable fee as required by subparagraph (CC) of
7-18 paragraph (1) of Code Section 33-8-1.
7-19 (e) A fund authorized by this article may be established
7-20 only with the participation of ten or more members and
7-21 shall have no fewer than 1,000 employees in the aggregate.
7-22 (f) A fund authorized by this article may be established
7-23 only if it has and thereafter maintains gross annual
7-24 premiums of $300,000.00 or such higher amount as the
7-25 Commissioner deems necessary to protect the interests of
7-26 the members and their employees.
7-27 (g) All employers who are members of a class, as defined
7-28 in subsection (b) of this Code section, for which forms a
7-29 fund has been formed pursuant to this article shall be
7-30 eligible for membership in such fund unless membership is
7-31 denied such employers by the Commissioner in accordance
7-32 with this article board of the fund pursuant to criteria
7-33 established by such board.
7-34 (h) Any trade association or professional association or
7-35 group of municipalities, counties, school boards, or
7-36 hospital authorities which forms a fund formed pursuant to
7-37 this article shall accept as a member of such fund any
7-38 other employer of the same class, as defined in subsection
7-39 (b) of this Code section, which makes application for
7-40 membership and otherwise meets the requirements of this
7-41 article and such other requirements as are established by
7-42 the board of such fund.
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8- 1 34-9-153. (Index)
8- 2 (a) The Commissioner shall examine the application made
8- 3 under Code Section 34-9-152 to determine whether the fund
8- 4 will be able to comply with the laws of this state and
8- 5 whether membership in the fund will enable the members of
8- 6 the fund to meet their liability for workers' compensation
8- 7 benefits under this chapter. If the Commissioner finds
8- 8 that the fund is capable of complying with such
8- 9 requirements and meeting such liability, he shall issue a
8-10 certificate authorizing the fund to provide workers'
8-11 compensation benefits on behalf of its members.
8-12 (b) If the Commissioner refuses to issue a certificate of
8-13 authority, he shall issue an order setting forth the
8-14 reasons for refusal and forward it to the proposed fund. A
8-15 copy of the order shall be sent to each member of the
8-16 fund.
8-17 (c) The Commissioner shall approve or disapprove the
8-18 application for a certificate of authority within 90 days
8-19 of receipt by him of the application and all of the
8-20 supporting information he has requested.
8-21 (d) The Commissioner may refuse to issue or renew or may
8-22 suspend or revoke the certificate of authority of any
8-23 fund, in accordance with Code Section 34-9-169, for
8-24 failure of the fund to comply with any provision of this
8-25 article or with any of the rules, regulations, or orders
8-26 of the Commissioner issued pursuant thereto.
8-27 (e) The certificate shall be renewed annually in
8-28 accordance with rules and regulations promulgated by the
8-29 Commissioner, upon payment by the fund of an annual fee of
8-30 $300.00 the renewal fee required by subparagraph (CC) of
8-31 paragraph (1) of Code Section 33-8-1."
SECTION 4.
8-32 Said article is further amended by striking Code Section
8-33 34-9-158, relating to the powers of the boards of trustee,
8-34 and inserting in lieu thereof a nw Code Section 34-9-158 to
8-35 read as follows:
8-36 "34-9-158. (Index)
8-37 The board of the fund shall have the following specific
8-38 powers, together with such powers as may be granted
8-39 elsewhere in this article or such other powers as may be
-8- (Index)
LC 19 2401
9- 1 necessary or incidental to effectuate the purposes of this
9- 2 article:
9- 3 (1) Establish and file criteria and guidelines for:
9- 4 (A) The acceptance or rejection of initial members and
9- 5 prospective new members; and
9- 6 (B) The termination of any member pursuant to Code
9- 7 Section 34-9-156.
9- 8 (1)(2) To invest and reinvest funds held by it in
9- 9 accordance with Code Section 34-9-163;
9-10 (2)(3) To collect and disburse all money due or payable
9-11 in accordance with this article;
9-12 (3)(4) To employ and contract with banks, corporate
9-13 trustees, insurance agents, surplus lines brokers,
9-14 insurers authorized to do business in this state, and
9-15 approved surplus lines carriers;
9-16 (4)(5) To employ and contract with actuaries,
9-17 accountants, contract administrators, and other agents
9-18 and employees necessary for the operation of the fund;
9-19 (5)(6) To employ an administrator for the fund;
9-20 (6)(7) To contract with other persons or public bodies
9-21 of this state for the use of services or facilities
9-22 necessary, useful, or incidental to the operation of the
9-23 fund;
9-24 (7)(8) To employ legal counsel;
9-25 (8)(9) To execute other contracts necessary or
9-26 incidental to the operation of the fund;
9-27 (9)(10) To pay dividends to or levy assessments on its
9-28 members;
9-29 (10)(11) To purchase bonds and insurance necessary to
9-30 comply with the requirements of this article and the
9-31 rules and regulations of the Commissioner; and
9-32 (11)(12) To do and perform such other and further acts,
9-33 not inconsistent with this article or with other laws of
9-34 this state, which may be necessary for the efficient and
9-35 proper operation of the fund."
SECTION 5.
9-36 Said article is further amended by striking Code Section
9-37 34-9-165, relating to requirements for contracts between
-9- (Index)
LC 19 2401
10- 1 funds and administrators not employed by such funds, is
10- 2 amended by striking paragraph (5) of subsection (a) and
10- 3 inserting in lieu thereof a new paragraph (5) to read as
10- 4 follows:
10- 5 "(5) A requirement that errors and omissions coverage or
10- 6 other appropriate liability insurance in an amount which
10- 7 is not less than that specified by the rules and
10- 8 regulations of the Commissioner be written with an
10- 9 authorized insurer or an eligible surplus lines insurer
10-10 and be maintained at all times by the administrator."
SECTION 6.
10-11 All laws and parts of laws in conflict with this Act are
10-12 repealed.
-10- (Index)
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Last Updated on 01/02/97