GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1993

S	1 

SENATE BILL 579*

Short Title:  Workers Comp. Solvency.	(Public)
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Sponsors: Senators Seymour; and Smith.
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Referred to:  Insurance.
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March 25, 1993

A BILL TO BE ENTITLED
AN ACT TO IMPROVE THE FINANCIAL MONITORING AND REGULATION OF EMPLOYERS THAT SELF-INSURE THEIR WORKERS' COMPENSATION LIABILITIES.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 97-93(b) reads as rewritten:
"(b)	In the case of subdivision (a)(2) of this section, the Commissioner of Insurance may require the deposit of an acceptable security, indemnity, or bond to secure the payment of compensation liabilities as they are incurred. Any individual employer or group of employers who furnish proof of financial ability under subdivision (a)(2) of this section shall be governed in all respects by this Article and by rules adopted by the Commissioner of Insurance."
Sec. 2.  G.S. 97-93 is amended by adding a new subsection to read:
"( d)	Groups of employers under subdivision (a)(2) of this section are subject to G.S. 58-3-80, 58-7-50, 58-7-55, 58-7-140, 58-7-160, 58-7-162, 58-7-163, 58-7-165, 58-7-167, 58-7-168, 58-7-170, 58-7-172, 58-7-173, 58-7-177, 58-7-179, 58-7-180, 58-7-183, 58-7-185, 58-7-187, 58-7-188, 58-7-190, 58-7-192, 58-7-193, 58-7-195, 58-7-197, 58-7-200, and Articles 13, 19, and 34 of this Chapter."
Sec. 3.  Article 2 of Chapter 97 of the General Statutes is amended by adding a new section to read:
"§ 97-93.1.  Deposits; bonds; excess insurance.
(a)	Each group of employers under G.S. 97-93(a)(2) shall deposit with the Commissioner, not later than the effective date of coverage, cash or acceptable securities, or post a surety bond issued by a corporate surety, in an amount equal to ten percent (10%) of the group's total annual premium, but not less than six hundred thousand dollars ($600,000).  For good cause shown, the Commissioner may require a surety bond or security deposit in excess of six hundred thousand dollars ($600,000).  Groups of employers will be given one year from July 1, 1993, to comply with the deposit requirement.
(b)	The amount of the security deposit or bond required shall be determined at least annually by the Commissioner based on data submitted by the group to the Commissioner.
(c)	Each group shall maintain specific excess insurance with a limit of at least five million dollars ($5,000,000).  Groups comprising businesses with high risks of multiple injuries from single occurrences may be required by the Commissioner to maintain higher limits.  With respect to specific excess insurance, a group's retention shall be the lowest retention generally available for groups with similar exposures and annual premium; but the Commissioner may, in his discretion, require higher levels consistent with the group's claims experience and financial condition."
Sec. 4.  This act becomes effective July 1, 1993.