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§ 9-404. Governmental self-insurance group

West's Annotated Code of MarylandLabor and EmploymentEffective: October 1, 2013

West's Annotated Code of Maryland
Labor and Employment
Title 9. Workers' Compensation (Refs & Annos)
Subtitle 4. Insurance Coverage (Refs & Annos)
Effective: October 1, 2013
MD Code, Labor and Employment, § 9-404
§ 9-404. Governmental self-insurance group
Regulation and guidelines
(a)(1) The Commission shall adopt regulations:
(i) setting procedures and other requirements for a governmental self-insurance group to establish joint self-insurance coverage; and
(ii) establishing guidelines to govern the investment of surplus money not needed to meet current obligations in a manner that will ensure solvency of the Fund and timely payment of claims.
(2) Notwithstanding the local government guidelines set forth in §§ 17-101 and 17-102 of the Local Government Article, the guidelines required by paragraph (1)(ii) of this subsection shall:
(i) state the types of investment in which money may be invested;
(ii) include guidance for the prudent investment of money based on claim experience, cash flow projections, income, liquidity, investment ratings, and risk;
(iii) authorize investments of money in equities, provided that investments do not exceed 30 percent of the surplus money;
(iv) provide that money not invested in equities shall be invested in accordance with §§ 17-101 and 17-102 of the Local Government Article; and
(v) prohibit borrowing of funds for the express purpose of investing those funds.
Authorized participants
(b)(1) Subject to paragraph (2) of this subsection, a governmental self-insurance group may be formed by any combination of:
(i) counties;
(ii) municipal corporations;
(iii) boards of education; and
(iv) community colleges.
(2) A board of education or a community college may not participate in a governmental self-insurance group unless its participation is approved by its county governing body.
Scope of county participation
(c) Subject to the approval of the Commission, a county that participates in a governmental self-insurance group may include in the coverage:
(1) any unit created or funded by the county; and
(2) regardless of funding:
(i) the board of education of the county;
(ii) a community college in the county;
(iii) a regional community college in the county;
(iv) a housing agency of the county created under Division II of the Housing and Community Development Article;
(v) a municipal corporation in the county;
(vi) a multicounty unit that operates in the county; or
(vii) a revenue authority in the county created by the State.
Certificate of authority
(d)(1) A governmental self-insurance group shall get a certificate of authority from the Commission before the governmental self-insurance group may self-insure.
(2) To qualify for a certificate under this subsection, a governmental self-insurance group shall satisfy the Commission that the governmental self-insurance group:
(i) is financially able to pay compensation;
(ii) will have annual gross premiums of at least $250,000; and
(iii) meets each other requirement under this section, § 9-403 of this subtitle, or a regulation of the Commission.
(3) The Commission shall issue a certificate of authority to each governmental self-insurance group that meets the requirements of paragraph (2) of this subsection.
Security
(e)(1) At any time, the Commission may require a governmental self-insurance group to secure payment of compensation by depositing with the Commission security:
(i) in a form accepted by a circuit court for investment of trust money; and
(ii) in the amount set by the Commission.
(2) On application and subject to paragraph (3) of this subsection, the Commission shall return security that a governmental self-insurance group has deposited under this subsection if:
(i) the members of the governmental self-insurance group cease to be subject to this title or secure compensation through an authorized insurer; and
(ii) the governmental self-insurance group has not been liable on a claim for compensation during the 5 years immediately after the day on which the event described in item (i) of this paragraph occurred.
(3) After reviewing the application and before returning security to a governmental self-insurance group, the Commission may require the governmental self-insurance group to submit to the Commission an indemnity bond in an amount equal to the value of the security.
Excess insurance
(f) Each governmental self-insurance group to which the Commission issues a certificate of authority shall have excess insurance in the amount set by the Commission.
Local office; toll-free telephone number
(g)(1) Each governmental self-insurance group shall have in the State an office run by a competent individual who handles all of the workers' compensation work in the State for the governmental self-insurance group.
(2) Each governmental self-insurance group shall establish a toll-free telephone number through which an employee or claimant, or a representative of an employee or claimant, may make direct telephone inquiries during regular business hours.
(3) The Commission may assess a fine not exceeding $1,000 on a governmental self-insurance group that does not comply with this subsection.
Advance premium discounts
(h) The Commission shall provide for advance premium discounts that are competitive with private insurance advance premium discounts.
Reports; examination of business; assessments
(i)(1) To be informed of the continuing financial responsibility of each governmental self-insurance group, the Commission:
(i) shall require each governmental self-insurance group to submit a report at least once each year; and
(ii) may examine the governmental self-insurance group under oath and make other examination of the business of the governmental self-insurance group.
(2) Each year, the Commission shall assess each governmental self-insurance group an amount not exceeding $1,500 to be used for actuarial studies and audits.
Revocation of approval
(j)(1) The Commission shall revoke the approval of a governmental self-insurance group to self-insure under this section if the governmental self-insurance group:
(i) fails to deposit securities with or submit a bond to the Commission in accordance with subsection (e) of this section;
(ii) fails to submit satisfactory reports to the Commission in accordance with subsection (i)(1)(i) of this section; or
(iii) otherwise fails to satisfy the Commission that it is financially able to self-insure.
(2) Whenever the Commission revokes approval for a governmental self-insurance group to self-insure under this section, the members of the governmental self-insurance group immediately shall secure compensation through an authorized insurer.
(3) If a member of a governmental self-insurance group fails to secure compensation as required by paragraph (2) of this subsection, the Commission shall order the member of the governmental self-insurance group to secure compensation through an authorized insurer.
Insolvency
(k) If a governmental self-insurance group becomes insolvent, the Uninsured Employers' Fund shall pay the outstanding obligations of the governmental self-insurance group for compensation.

Credits

Added by Acts 1991, c. 8, § 2, eff. Oct. 1, 1991. Amended by Acts 1991, c. 21, § 4; Acts 1992, c. 22, § 1; Acts 2000, c. 468, § 1, eff. June 1, 2000; Acts 2006, c. 64, § 1, eff. Oct. 1, 2006; Acts 2006, c. 163, § 1, eff. July 1, 2006; Acts 2007, c. 41, § 1, eff. Oct. 1, 2007; Acts 2007, c. 42, § 1, eff. Oct. 1, 2007; Acts 2012, c. 570, § 6, eff. Oct. 1, 2013; Acts 2013, c. 136, § 1, eff. Oct. 1, 2013; Acts 2013, c. 676, § 1, eff. Oct. 1, 2013.
Formerly Art. 101, §§ 16A, 18.
MD Code, Labor and Employment, § 9-404, MD LABOR & EMPLY § 9-404
Current through legislation effective through May 9, 2024, from the 2024 Regular Session of the General Assembly. Some statute sections may be more current, see credits for details.
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