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New Hampshire Workers' Compensation Legal Library


New Hampshire Home Page   >   New Hampshire Regulations
 

CHAPTER Lab 400 WORKERS' COMPENSATION SELF-INSURANCE

Statutory Authority: RSA 281-A:5, III and RSA 281-A:60

PART Lab 401 PURPOSE

Lab 401.01 Statement of Purpose. This chapter sets forth the procedures and forms for carrying out the provisions of RSA 281-A pertaining to workers' compensation self-insurance.

Source. #2264, eff 1-6-83; ss by #2935, eff 12-27-84, EXPIRED: 12-27-90

New. #5235, eff 9-27-91, EXPIRED: 9-27-97

New. #6631, INTERIM, eff 11-16-97, EXPIRED: 3-16-98

New. #6806, eff 7-18-98; ss by #8682, INTERIM, eff 7-15-06, EXPIRED: 1-11-07

New. #9019, eff 11-1-07; ss by #11066, eff 4-1-16

PART Lab 402 DEFINITIONS

Lab 402.01 "Aggregate excess" means coverage which applies once within each specified policy term or portion thereof.

Source. #2264, eff 1-6-83; ss by #2935, eff 12-27-84, EXPIRED: 12-27-90

New. #5235, eff 9-27-91, EXPIRED: 9-27-97

New. #6631, INTERIM, eff 11-16-97, EXPIRED: 3-16-98

New. #6806, eff 7-18-98; ss by #8682, INTERIM, eff 7-15-06, EXPIRED: 1-11-07

New. #9019, eff 11-1-07; ss by #11066, eff 4-1-16

Lab 402.02 "Attachment point" means the dollar amount at which the risk retention for the self-insurer ends and at which the involvement of the carrier begins.

Source. #2264, eff 1-6-83; ss by #2935, eff 12-27-84, EXPIRED: 12-27-90

New. #5235, eff 9-27-91, EXPIRED: 9-27-97

New. #6631, INTERIM, eff 11-16-97, EXPIRED: 3-16-98

New. #6806, eff 7-18-98; ss by #8682, INTERIM, eff 7-15-06, EXPIRED: 1-11-07

New. #9019, eff 11-1-07; ss by #11066, eff 4-1-16

Lab 402.03 "Carrier" means a legal entity, or group thereof, which has been lawfully authorized by the state's insurance department to market insurance in this state.

Source. #2264, eff 1-6-83; ss by #2935, eff 12-27-84, EXPIRED: 12-27-90

New. #5235, eff 9-27-91, EXPIRED: 9-27-97

New. #6631, INTERIM, eff 11-16-97, EXPIRED: 3-16-98

New. #6806, eff 7-18-98; ss by #8682, INTERIM, eff 7-15-06, EXPIRED: 1-11-07

New. #9019, eff 11-1-07; ss by #11066, eff 4-1-16 (from Lab 402.04)

Lab 402.04 "Certificate" means the documentary evidence of insurance to be filed with the department as proof of coverage by a carrier.

Source. #2264, eff 1-6-83; ss by #2935, eff 12-27-84, EXPIRED: 12-27-90

New. #5235, eff 9-27-91, EXPIRED: 9-27-97

New. #6631, INTERIM, eff 11-16-97, EXPIRED: 3-16-98

New. #6806, eff 7-18-98; ss by #8682, INTERIM, eff 7-15-06, EXPIRED: 1-11-07

New. #9019, eff 11-1-07; ss by #11066, eff 4-1-16 (from Lab 402.05)

Lab 402.05 "Coverage" means the full amount of insurance.

Source. #2264, eff 1-6-83; ss by #2935, eff 12-27-84, EXPIRED: 12-27-90

New. #5235, eff 9-27-91, EXPIRED: 9-27-97

New. #6631, INTERIM, eff 11-16-97, EXPIRED: 3-16-98

New. #6806, eff 7-18-98; ss by #8682, INTERIM, eff 7-15-06, EXPIRED: 1-11-07

New. #9019, eff 11-1-07; ss by #11066, eff 4-1-16 (from Lab 402.06)

Lab 402.06 "Excess per Loss" means the amount above the attachment point on each work injury incident.

Source. #2264, eff 1-6-83; ss by #2935, eff 12-27-84, EXPIRED: 12-27-90

New. #5235, eff 9-27-91, EXPIRED: 9-27-97

New. #6631, INTERIM, eff 11-16-97, EXPIRED: 3-16-98

New. #6806, eff 7-18-98; ss by #8682, INTERIM, eff 7-15-06, EXPIRED: 1-11-07

New. #9019, eff 11-1-07; ss by #11066, eff 4-1-16 (from Lab 402.07)

Lab 402.07 "Financial Ability" means having the resources and willingness to make direct payment of compensation in amounts, manner, and when due.

Source. #2264, eff 1-6-83; ss by #2935, eff 12-27-84, EXPIRED: 12-27-90

New. #5235, eff 9-27-91, EXPIRED: 9-27-97

New. #6631, INTERIM, eff 11-16-97, EXPIRED: 3-16-98

New. #6806, eff 7-18-98; ss by #8682, INTERIM, eff 7-15-06, EXPIRED: 1-11-07

New. #9019, eff 11-1-07; ss by #11066, eff 4-1-16 (from Lab 402.08)

Lab 402.08 "Guarantee" means surety bond, security, or cash that is deposited with the department and available for self-insurer retention if the self-insurer fails to pay directly.

Source. #2264, eff 1-6-83; ss by #2935, eff 12-27-84, EXPIRED: 12-27-90

New. #5235, eff 9-27-91, EXPIRED: 9-27-97

New. #6631, INTERIM, eff 11-16-97, EXPIRED: 3-16-98

New. #6806, eff 7-18-98; ss by #8682, INTERIM, eff 7-15-06, EXPIRED: 1-11-07

New. #9019, eff 11-1-07; ss by #11066, eff 4-1-16 (from Lab 402.09)

Lab 402.09 "Parent company support" means a written agreement filed with the department on behalf of a subsidiary for the purpose of guarantying payment of workers' compensation benefits in a specified amount in the event the self-insured subsidiary defaults.

Source. #2264, eff 1-6-83; ss by #2935, eff 12-27-84, EXPIRED: 12-27-90

New. #5235, eff 9-27-91, EXPIRED: 9-27-97

New. #6631, INTERIM, eff 11-16-97, EXPIRED: 3-16-98

New. #6806, eff 7-18-98; ss by #8682, INTERIM, eff 7-15-06, EXPIRED: 1-11-07

New. #9019, eff 11-1-07; ss by #11066, eff 4-1-16 (from Lab 402.10)

Lab 402.10 "Permit" means the documentary evidence that an employer, or an association or group of employers, has been authorized by the commissioner to be self-insured.

Source. #2264, eff 1-6-83; ss by #2935, eff 12-27-84, EXPIRED: 12-27-90

New. #5235, eff 9-27-91, EXPIRED: 9-27-97

New. #6631, INTERIM, eff 11-16-97, EXPIRED: 3-16-98

New. #6806, eff 7-18-98; ss by #8682, INTERIM, eff 7-15-06, EXPIRED: 1-11-07

New. #9019, eff 11-1-07; ss by #11066, eff 4-1-16 (from Lab 402.11)

Lab 402.11 "Principal" means the self-insured.

Source. #2264, eff 1-6-83; ss by #2935, eff 12-27-84, EXPIRED: 12-27-90

New. #5235, eff 9-27-91, EXPIRED: 9-27-97

New. #6631, INTERIM, eff 11-16-97, EXPIRED: 3-16-98

New. #6806, eff 7-18-98; ss by #8682, INTERIM, eff
7-15-06, EXPIRED: 1-11-07

New. #9019, eff 11-1-07; ss by #11066, eff 4-1-16 (from Lab 402.12)

Lab 402.12 "Security" means an evidence of property, as a stock certificate or bond, which is negotiable and transferable.

Source. #2264, eff 1-6-83; ss by #2935, eff 12-27-84, EXPIRED: 12-27-90

New. #5235, eff 9-27-91, EXPIRED: 9-27-97

New. #6631, INTERIM, eff 11-16-97, EXPIRED: 3-16-98

New. #6806, eff 7-18-98; ss by #8682, INTERIM, eff 7-15-06, EXPIRED: 1-11-07

New. #9019, eff 11-1-07; ss by #11066, eff 4-1-16 (from Lab 402.13)

Lab 402.13 "Self-insurer retention" means the amount below the attachment point on each work injury incident.

Source. #2264, eff 1-6-83; ss by #2935, eff 12-27-84, EXPIRED: 12-27-90

New. #5235, eff 9-27-91, EXPIRED: 9-27-97

New. #6631, INTERIM, eff 11-16-97, EXPIRED: 3-16-98

New. #6806, eff 7-18-98; ss by #8682, INTERIM, eff 7-15-06, EXPIRED: 1-11-07

New. #9019, eff 11-1-07; ss by #11066, eff 4-1-16 (from Lab 402.14)

Lab 402.14 "Self-insurer" means an employer, or association or group of employers, which has been authorized by the commissioner to be self-insured.

Source. #2264, eff 1-6-83; ss by #2935, eff 12-27-84, EXPIRED: 12-27-90

New. #5235, eff 9-27-91, EXPIRED: 9-27-97

New. #6631, INTERIM, eff 11-16-97, EXPIRED: 3-16-98

New. #6806, eff 7-18-98; ss by #8682, INTERIM, eff 7-15-06, EXPIRED: 1-11-07

New. #9019, eff 11-1-07; ss by #11066, eff 4-1-16 (from Lab 402.15)

Lab 402.15 "Surety" means a company licensed in this state to furnish surety bonds.

Source. #2264, eff 1-6-83; ss by #2935, eff 12-27-84, EXPIRED: 12-27-90

New. #5235, eff 9-27-91, EXPIRED: 9-27-97

New. #6631, INTERIM, eff 11-16-97, EXPIRED: 3-16-98

New. #6806, eff 7-18-98; ss by #8682, INTERIM, eff 7-15-06, EXPIRED: 1-11-07

New. #9019, eff 11-1-07 (from Lab 402.14); ss by #11066, eff 4-1-16 (from Lab 402.16)

Lab 402.16 "Surety Bond" means a contract among three parties, the self-insurer as principal, a financial institution as surety, and the commissioner as obligee, using the wording of "Surety Bond" form WCSI-2 (8/1994), contained in appendix II.

Source. #2264, eff 1-6-83; ss by #2935, eff 12-27-84, EXPIRED: 12-27-90

New. #5235, eff 9-27-91, EXPIRED: 9-27-97

New. #6631, INTERIM, eff 11-16-97, EXPIRED: 3-16-98

New. #6806, eff 7-18-98; ss by #8682, INTERIM, eff 7-15-06, EXPIRED: 1-11-07

New. #9019, eff 11-1-07; ss by #11066, eff 4-1-16

PART Lab 403 SELF-INSURANCE AUTHORIZATION

Lab 403.01 Purpose of Rules. No employer, or association of employers, shall be self-insured without the commissioner's authorization. Authorization shall be evidenced by a permit. No permit shall be issued by the commissioner unless an employer, or association or group of employers, has furnished satisfactory proof of financial ability through submission of a surety bond, parent company agreement, certified financial statements, proof of excess insurance, and willingness to make direct payment of workers' compensation benefits in accordance with Lab 405.

Source. #2264, eff 1-6-83; ss by #2935, eff 12-27-84, EXPIRED: 12-27-90

New. #5235, eff 9-27-91, EXPIRED: 9-27-97

New. #6631, INTERIM, eff 11-16-97, EXPIRED: 3-16-98

New. #6806, eff 7-18-98; ss by #8682, INTERIM, eff 7-15-06, EXPIRED: 1-11-07

New. #9019, eff 11-1-07; ss by #11066, eff 4-1-16

Lab 403.02 Duration. A permit shall remain in effect indefinitely, except that it shall be subject to voluntary termination and to revocation for good and sufficient reason as defined in Lab 403.03. The self-insurer shall be issued a self-insurance permit by the commissioner.

Source. #2264, eff 1-6-83; ss by #2935, eff 12-27-84, EXPIRED: 12-27-90

New. #5235, eff 9-27-91, EXPIRED: 9-27-97

New. #6631, INTERIM, eff 11-16-97, EXPIRED: 3-16-98

New. #6806, eff 7-18-98; ss by #8682, INTERIM, eff 7-15-06, EXPIRED: 1-11-07

New. #9019, eff 11-1-07; ss by #11066, eff 4-1-16

Lab 403.03 Revocation. Permits shall be revoked by reason of:

(a) Failure to cooperate with the department;

(b) Failure to make payment of compensation benefits;

(c) Failure to demonstrate proof of financial ability; or

(d) Any other condition which demonstrates that the self-insurer is unable to meet the requirements of RSA chapter 281-A.

Source. #2264, eff 1-6-83; ss by #2935, eff 12-27-84, EXPIRED: 12-27-90

New. #5235, eff 9-27-91, EXPIRED: 9-27-97

New. #6631, INTERIM, eff 11-16-97, EXPIRED: 3-16-98

New. #6806, eff 7-18-98; ss by #8682, INTERIM, eff 7-15-06, EXPIRED: 1-11-07

New. #9019, eff 11-1-07; ss by #11066, eff 4-1-16

Lab 403.04 Voluntary Termination. All self-insurers shall notify the department in writing at least 30 days prior to ceasing to be self-insured, and in addition to filing "Termination Notice", form WC-100 (10/1991), in accordance with Lab 307 & 308.

Source. #2264, eff 1-6-83; ss by #2935, eff 12-27-84, EXPIRED: 12-27-90

New. #5235, eff 9-27-91, EXPIRED: 9-27-97

New. #6631, INTERIM, eff 11-16-97, EXPIRED: 3-16-98

New. #6806, eff 7-18-98; ss by #8682, INTERIM, eff 7-15-06, EXPIRED: 1-11-07

New. #9019, eff 11-1-07; ss by #11066, eff 4-1-16

PART Lab 404 ASSOCIATION OR GROUP SELF-INSURANCE

Lab 404.01 Homogenous Self-Insured Groups. Employers as defined by RSA 281-A:2, VIII and IX who have similar trades, businesses, occupations, professions, or functions may become self-insured as an association or group upon meeting the applicable requirements of this part, subject to the following provisions:

(a) Such employers shall form or join an association or group;

(b) Upon receipt of a self-insurance permit, an association or group shall complete and file with the department "Notice of Workers Compensation Insurance Coverage" form 6WC (4/2008) and "Supplemental Notice of Information Regarding Workers' Compensation Insurance Coverage" form 6WC-S (3/2013) specifying all members, and shall update these filings upon each new membership, in accordance with Lab chapter 300;

(c) Associations or groups shall provide proof of financial ability in accordance with Lab 405;

(d) Group self-insurance shall not relieve a member of any obligation under the statute or related rules of the department;

(e) Notice or knowledge of a work injury incident by a member shall be deemed conclusively to be constructive notice or knowledge on the part of an association or group;

(f) The insolvency, bankruptcy, or disassociation of a member shall not relieve the association or group from liability under the statute;

(g) When the membership of an employer ceases, an association or group shall complete and file written notice with the department, not less than 30 days prior to the effective date, in addition to filing with respect to such employer a "Termination Notice" form WC-100, (10/1991) in accordance with Lab 307; and

(h) When the membership of an employer ceases, but is then reinstated prior to the effective date of termination, an association or group shall file with the department a "Reinstatement Notice" form WC-100 R (9/2015) in accordance with Lab 307.02.

Source. #2264, eff 1-6-83; ss by #2935, eff 12-27-84, EXPIRED: 12-27-90

New. #5235, eff 9-27-91, EXPIRED: 9-27-97

New. #6631, INTERIM, eff 11-16-97, EXPIRED: 3-16-98

New. #6806, eff 7-18-98; ss by #8682, INTERIM, eff 7-15-06, EXPIRED: 1-11-07

New. #9019, eff 11-1-07; ss by #11066, eff 4-1-16

PART Lab 405 SATISFACTORY PROOF OF FINANCIAL ABILITY

Lab 405.01 Proof of Financial Ability. Proof of financial ability and willingness to make direct payment of compensation in amounts, manner, and when due as required by RSA 281-A:5, III, shall be given to the commissioner as provided in this part.

Source. #2264, eff 1-6-83; ss by #2935, eff 12-27-84, EXPIRED: 12-27-90

New. #5235, eff 9-27-91, EXPIRED: 9-27-97

New. #6631, INTERIM, eff 11-16-97, EXPIRED: 3-16-98

New. #6806, eff 7-18-98; ss by #8682, INTERIM, eff 7-15-06, EXPIRED: 1-11-07

New. #9019, eff 11-1-07; ss by #11066, eff 4-1-16

Lab 405.02 Application for Self-Insurance. Application for self-insurance shall be made as follows:

(a) A first time applicant shall complete and file with the department a "Workers Compensation Self-Insurance Application" form WSCI-1 (2/2016), contained in appendix II if the applicant is a single employer, or a "Workers Compensation Self-Insurance Application-Group" form WSCI-1A (2/2016) contained in appendix II if the applicant is an association or group of employers , together with balance sheet data or the most recent annual report containing such data, payroll data, and an "Annual Financial Statement" form WCSI-11 (3/1975) contained in appendix II .

(b) Annually after first receipt of a self-insurance permit, the self – insurer shall complete and file with the department an "Annual Financial Statement" form WCSI-11, a "Report of Outstanding Liabilities" form WCSI-9 (3/1975), contained in appendix II, a "Workers' Compensation Self-Insurance Questionnaire" form WCSI-16 (9/2015), contained in appendix II, a full report of actuarial analysis and opinion, and the "Actuarial Opinion Summary Sheet" form WCSI-7 (9/2015), contained in appendix II.

Source. #2264, eff 1-6-83; ss by #2935, eff 12-27-84, EXPIRED: 12-27-90

New. #5235, eff 9-27-91, EXPIRED: 9-27-97

New. #6631, INTERIM, eff 11-16-97, EXPIRED: 3-16-98

New. #6806, eff 7-18-98; ss by #8682, INTERIM, eff 7-15-06, EXPIRED: 1-11-07

New. #9019, eff 11-1-07; ss by #11066, eff 4-1-16

Lab 405.03 Self-Insured Retention.

(a) A self-insurer shall identify to the commissioner the dollar amount of the attachment point, up to which the self-insurer will be responsible for the payment of workers' compensation benefits for each work injury incident.

(b) In support of this identification of amount, the self- insurer shall submit:

(1) The dollar amount of the proposed self-insurer retention;

(2) Five years of loss history;

(3) A financial statement of the self-insured; and

(4) Any other factor that may impact the self-insurer's ability to pay claims.

(c) The commissioner shall review the submission and approve an amount for the self-insurer retention based on his or her discretion.

Source. #2264, eff 1-6-83; ss by #2935, eff 12-27-84, EXPIRED: 12-27-90

New. #5235, eff 9-27-91; amd by #5501, eff 11-12-92; ss by #6631, INTERIM, eff 11-16-97, EXPIRED: 3-16-98

New. #6806, eff 7-18-98; ss by #8682, INTERIM, eff 7-15-06, EXPIRED: 1-11-07

New. #9019, eff 11-1-07; ss by #11066, eff 4-1-16

Lab 405.04 Supplemental Guarantee of Payment.

(a) The self-insurer shall provide to the commissioner a supplemental guarantee of payment of the self-insurer retention. The supplemental guarantee of payment shall be in the form of a surety bond or securities or cash.

(b) A surety bond shall use the wording of "Surety Bond", form WCSI-2 (8/1994) contained in Appendix II and shall name the State of New Hampshire Commissioner of Labor as beneficiary, and shall be in a penal sum not to exceed the 90-percent confidence level determined by the actuary of the self-insured and reported to the department on the "Actuarial Opinion Summary Sheet", form WCIS-7 (9/2015) contained in Appendix II.

(c) The commissioner shall require a surety bond exceeding the amount of self-insurer retention upon application or annual review under any of the following circumstances:

(1) Lack of financial history;

(2) Fluctuating financial statements;

(3) Litigation pending in other jurisdictions;

(4) Any negative change in the financial picture of a self-insurer; or

(5) The confidence levels determined in "Actuarial Opinion Summary Sheet" form WCSI-7.

(d) Such surety bond shall remain in full force and effect unless terminated by the surety by written notice of its intention to do so filed in the office of the labor commissioner, and by giving written notice thereof to the principal. After proper notice, the surety's liability shall terminate at the expiration of 90 days from the date of such filing and not earlier. However, such termination shall not relieve the surety of its continual liability under this bond for obligations that occurred prior to the effective date of such termination.

(e) If the self-insurer ceases to be an employer subject to the statute, or if it obtains coverage pursuant to RSA 281-A:5,I, then the liability of the self-insurer and of the surety shall cease, except as to such liability which has accrued during the life of the obligation. The surety shall be liable to the full extent of the penal sum in the event the self-insurer defaults.

(f) Should the financial circumstances of the self-insurer change, the commissioner shall order an additional surety bond or supplemental guarantee or both or permit a reduction in the penal sum of an existing bond or the substitution of a new bond. Increases or reductions of the penal sum of a bond may be done by endorsement. Bonds shall remain in the possession of the department, even subsequent to their termination, except that the effective date of the termination shall be acknowledged in writing by the department to both the principal and the surety.

(g) In lieu of the surety bond referred to in Lab 405.04 (b) through (f), the self-insurer shall deposit and keep on deposit with a New Hampshire bank cash, securities, or both in trust for the benefit of a self-insurer's employees. Such guarantees shall be used, liquidated and disbursed exclusively upon the self-insurer's default and upon the commissioner's order, for the purpose of making direct payment of compensation benefits as provided by the statute and administrative rule of the department.

(h) The self-insured and its fiduciary shall complete and file a "Securities Deposit Agreement" form WCSI-3 (1/1992), contained in appendix II, if the self-insured is using securities or cash as a supplemental guarantee.

(i) The commissioner shall order additional guarantees if an annual actuary opinion indicates such change is prudent or permit a reduction or substitution if an annual actuary opinion indicates such change is prudent. Income from such deposit shall accrue to the self-insurer.

(j) The agreement evidencing and governing a deposit of securities shall be executed by the self-insurer as principal, the bank's trust officer as fiduciary, and the commissioner as administrator of the statute, and shall remain in full force and effect until other guarantees provided by this section are substituted.

(k) If the self-insurer ceases to be an employer subject to the statute or insures pursuant to RSA 281-A:5, I, the liability of the principal and the fiduciary shall cease except with respect to liability which has accrued during the life of the agreement. The bank and the fiduciary shall be liable to the full extent of the sum of cash or the market value of the securities on deposit.

(l) No such deposit of securities may be withdrawn by anyone, without prior authorization of the commissioner. No guarantees deposited pursuant to this section shall be assignable, or subject to attachment, or liable in any way for the debt of the self-insurer unless such liability is incurred under RSA 281-A.

(m) The self-insurer shall obtain a completed "Certificate of Insurance" form WCSI-4 (1/1992) contained in appendix II, executed by a carrier for excess insurance. The excess coverage shall include the New Hampshire amendatory endorsement as issued by the insurance department. The self-insurer shall obtain a completed copy of the "New Hampshire Amendatory Endorsement" form WCSI-5 (4/1996), contained in appendix II from the carrier to send to the department of labor to demonstrate proof of compliance. Such insurance shall guarantee within the stated coverage, beginning at attachment point, the payment of compensation benefits as provided by the statute.

(n) The certificate shall remain in full force and effect until it has been replaced or other guarantees have been substituted, or until a written notice of termination has been on file with the department for a minimum period of 45 days. If the self-insurer ceases to be an employer subject to the statute or insures pursuant to RSA 281-A: 5, I, the liability of the carrier shall cease except as to such liability which has accrued during the life of the certificate.

(o) If the self-insurer is a subsidiary to a parent entity the self-insurer shall file evidence of a parent company support, guaranteeing payment of compensation benefits under the statute up to a specific sum. This guarantee invests the commissioner with the power to order the manner and amount of payment upon default of the self-insurer. Termination of such agreement shall require a 60-day written notice to be filed with the department. "The Parent Company Agreement" form WCSI-6 (1/1992) contained in appendix II shall be used.

Source. #9019, eff 11-1-07 (from Lab 405.03); ss by #11066, eff 4-1-16

PART Lab 406 SELF-INSURED PUBLIC EMPLOYERS - REPLEALED

Lab 406.01 Application and Permit. - REPEALED

Source. #2264, eff 1-6-83; ss by #2935, eff 12-27-84, EXPIRED: 12-27-90

New. #5235, eff 9-27-91, EXPIRED: 9-27-97

New. #6631, INTERIM, eff 11-16-97, EXPIRED: 3-16-98

New. #6806, eff 7-18-98; ss by #8682, INTERIM, eff 7-15-06, EXPIRED: 1-11-07

New. #9019, eff 11-1-07; rpld by #11066, eff 4-1-16

PART Lab 407 INSTRUCTIONS FOR THE COMPLETION OF SELF-INSURANCE FORMS - REPEALED

Lab 407.01 - 407.08 - REPEALED

Source. #5235, eff 9-27-91, EXPIRED: 9-27-97

New. #6631, INTERIM, eff 11-16-97, EXPIRED: 3-16-98

New. #6806, eff 7-18-98; ss by #8682, INTERIM, eff 7-15-06, EXPIRED: 1-11-07

New. #9019, eff 11-1-07; rpld by #11066, eff 4-1-16

PART Lab 408 REGULATION OF THIRD PARTY ADMINISTRATORS

Statutory Authority: RSA 281-A:5-d

Lab 408.01 Purpose. The purpose of this part is to provide for the regulation and licensing of third party administrators who perform services for employers self-insuring their workers' compensation and to set forth procedural requirements which the commissioner deems necessary to carry out the provisions of RSA 281-A:5-d.

Source. #7142, eff 11-24-99, EXPIRED: 11-24-07

New. #9878-A eff 2-25-11

Lab 408.02 Definitions.

(a) "Third party administrator (TPA)" means "third party administrator" as defined in RSA 281-A:5-d.

(b) "Department" means the department of labor.

(c) "Commissioner" means the commissioner of labor or the commissioner's authorized representative.

(d) "Self-insurer" means a person, partnership, association, limited liability company, corporation, or legal representative of a person, partnership, association, limited liability company or corporation who employs one or more persons whether in one or more trades, businesses, professions or occupations and whether in one or more locations who is approved by the department of labor to assume the responsibility for providing workers' compensation for wage loss, remedial care and rehabilitation as provided by RSA 281-A.

Source. #7142, eff 11-24-99, EXPIRED: 11-24-07

New. #9878-A eff 2-25-11

Lab 408.03 Application.

(a) A TPA shall not operate as a TPA in this state without a certificate of authority from the department which will be issued only following review of the information supplied by the applicant as described in Lab 408.18.

(b) Any amendment to the application shall be filed in the same manner as the application. If an application is amended, such amendment shall be considered, and subject to approval or denial, in the same manner as the original application.

(c) A TPA shall notify the commissioner in writing of any change in the information required to be filed under these rules including, but not limited to, a change of address or name, no later than 30 days after the change. If a change occurs but notification is not provided, the certificate of registration shall be terminated following notice and an opportunity for hearing.

Source. #7142, eff 11-24-99, EXPIRED: 11-24-07

New. #9878-A eff 2-25-11

Lab 408.04 Surety Bond.

(a) All applicants shall provide financial assurance as follows:

(1) The applicant shall attempt in good faith to obtain a surety bond issued by an insurance company licensed to do business in the State of New Hampshire in a minimum amount of $100,000

(2) If the applicant cannot obtain such a bond, then another form of security, including, but not limited to, cash or negotiable securities in an amount equal to $100,000 shall be set aside in an escrow account with a financial institution licensed to do business in the state of New Hampshire.

(b) The surety bond or escrow account shall be payable to the commissioner to ensure the financial protection of the TPA's customers, subject to the dollar limitation of the surety bond or escrow account.

Source. #7142, eff 11-24-99, EXPIRED: 11-24-07

New. #9878-A eff 2-25-11

Lab 408.05 Audited Financial Statement.

(a) Each applicant for a certificate of authority or renewal of a certificate of authority shall provide the applicant's current audited financial statement. An audited financial statement, for the purposes of this rule, shall consist of a financial statement that is prepared in a manner consistent with generally accepted accounting principles (GAAP), and shall be accompanied by an opinion by an independent accounting firm.

(b) The audited financial statement shall reflect a positive net worth in order to be acceptable as proof of the applicant's financial responsibility.

Source. #7142, eff 11-24-99, EXPIRED: 11-24-07

New. #9878-A eff 2-25-11

Lab 408.06 Written Agreement Necessary.

(a) A TPA shall not act on behalf of a self-insurer without a written agreement with that self-insurer.

(b) The agreement shall contain:

(1) The names and addresses of the parties to the contract;

(2) An enumeration of the responsibilities and contractual obligations of the parties to the agreement;

(3) Provisions for contract termination by either of the parities to the agreement and provisions for the fulfillment of any lawful obligations with respect to policies affected by the written agreement;

(4) The underwriting or other standards to be used and administered;

(5) The financial arrangement for the transfer of funds between the self-insurer and the TPA in the conduct of business as stipulated in the contract; and

(6) Other provisions deemed necessary by the parties to the contract.

Source. #7142, eff 11-24-99, EXPIRED: 11-24-07

New. #9878-A eff 2-25-11

Lab 408.07 Fiduciary Obligation.

(a) Each TPA shall establish a premium trust account if the TPA expects to receive premiums or return premiums on New Hampshire business.

(b) If the account is interest bearing, the TPA shall comply with Lab 408.11.

(c) Fiduciary funds on New Hampshire business shall at all times be maintained in the premium trust account separate from any other account of depository. Such account shall be in an amount at least equal to the premiums and return premiums, net of commission, received by the TPA.

(d) The TPA's New Hampshire premium trust account signature card shall contain the following notation: "This is an insurance premium trust account maintained under the provisions of RSA 281-A:5-d."

(e) Checks drawn on the premium trust account shall bear the notation "Premium Trust Account".

Source. #7142, eff 11-24-99, EXPIRED: 11-24-07

New. #9878-A eff 2-25-11

Lab 408.08 Commingling of Funds Prohibited.

(a) Under no circumstances shall a TPA place fiduciary funds in a personal or business operating account. The TPA may retain commission income or other funds in the TPA's premium trust account in order to advance premiums, establish reserves for paying return commissions or for such contingencies as may arise in his business of receiving and transmitting premiums or return premium funds.

(b) The TPA may retain a portion of the TPA's unearned commissions in the premium trust account in order to avoid being short in the event of a policy cancellation. When a policy is canceled and the return premium is received by the TPA by means of a credit or otherwise, those funds shall be placed in the premium trust account until remitted to the self-insured entitled thereto.

(c) Cash premium payments shall not be deposited into the TPA's personal or business operating account in order to draw a personal check in the amount of net premium payment to the self-insurer. The use of personal checks to transit fiduciary funds shall be prohibited in any situation that results in commingling the fiduciary funds with the TPA's personal funds.

Source. #7142, eff 11-24-99, EXPIRED: 11-24-07

New. #9878-A eff 2-25-11

Lab 408.09 Interest-Bearing Accounts. A TPA shall only utilize interest-bearing accounts that require no advance notice for the withdrawal of funds, and the TPA shall arrange all such interest-bearing accounts so that funds therein contained shall be immediately available during normal business hours.

Source. #7142, eff 11-24-99, EXPIRED: 11-24-07

New. #9878-A eff 2-25-11

Lab 408.10 Return Premiums. The TPA shall hold the return premiums as a fiduciary. The TPA shall retain the return premium in the trust account until remittance to the client is made. Remittance to the client shall occur no later than 45 days from the date the return premium is determined. If the return premium cannot be delivered to the insured entitled thereto, the TPA shall retain the funds. The TPA shall have the responsibility to report the unclaimed funds to the State of New Hampshire, in accordance with RSA 471-C.

Source. #7142, eff 11-24-99, EXPIRED: 11-24-07

New. #9878-A eff 2-25-11

Lab 408.11 Recordkeeping Requirements.

(a) The TPA shall maintain the following records relative to the premium trust account:

(1) Periodic statements of account supplied by the bank for all premium trust accounts maintained pursuant to this part;

(2) Records of all deposits made into each premium trust account;

(3) Canceled checks drawn on, or records of withdrawal of funds from, such premium trust accounts; and

(4) An accounts receivable listing or similar record.

(b) All records described above shall be kept in the principal office of the TPA.

Source. #7142, eff 11-24-99, EXPIRED: 11-24-07

New. #9878-A eff 2-25-11

Lab 408.12 Responsibilities of the Self Insurer.

(a) The self-insurer shall be responsible for determining benefits, premium rates, underwriting criteria and claims payment procedures and for securing reinsurance.

(b) The standards pertaining to these matters shall be provided in writing by the self-insurer to the TPA.

(c) If the TPA has any responsibility for the development or formula of the items in (a) above, that responsibility shall be set forth in the written agreement between the TPA and the self-insurer.

Source. #7142, eff 11-24-99, EXPIRED: 11-24-07

New. #9878-A eff 2-25-11

Lab 408.13 Approval of Advertising. All advertising conducted by the TPA on the behalf of the self-insurer shall be approved in writing by the self-insurer in advance of its use.

Source. #7142, eff 11-24-99, EXPIRED: 11-24-07

New. #9878-A eff 2-25-11

Lab 408.14 Grounds for Denial, Nonrenewal or Revocation of Certificate. Following notice and an opportunity for hearing, the commissioner or the commissioner's representative shall deny, nonrenew or revoke a TPA's certificate if it is found that the TPA is not competent, trustworthy, financially responsible or of good personal and business reputation, based on the following factors.

(a) Failure to comply with any provisions of RSA 281-A:5-d, or these rules;

(b) Failure to comply with any lawful order of the commissioner;

(c) Failure to comply with the workers' compensation claims processing responsibilities established by Lab chapter 500;

(d) Committing an unfair or deceptive act or practice;

(e) Deterioration of financial condition adversely affecting the certificate holder's ability to operate as a TPA;

(f) Filing an application or any required form with the department which contains fraudulent information or omissions;

(g) Misappropriation, conversion, illegal withholding, or refusal to pay on proper demand any monies that belong to a person otherwise entitled to them;

(h) That an owner, principal, officer, partner, manager, director, stockholder, trustee, employee of the TPA or the TPA itself has:

(1) Had a TPA license or an application for a TPA license in any state denied, suspended or revoked;

(2) Been the subject of a fine, penalty, order, withdrawal or informal settlement with any state regulatory agency; or

(3) Pled guilty or no contest to any felony or misdemeanor;

Source. #7142, eff 11-24-99, EXPIRED: 11-24-07

New. #9878-A eff 2-25-11

Lab 408.15 Inquiry by Commissioner.

(a) The TPA shall respond, in writing, within 30 days to any inquiry by the commissioner made pursuant to these rules.

(b) A TPA shall keep all complaints on file for a period of 5 years. Complaint information shall be made available to the department by the TPA upon the commissioner's request.

Source. #7142, eff 11-24-99, EXPIRED: 11-24-07

New. #9878-A eff 2-25-11

Lab 408.16 Hearing and Appeal. Prior to denying or revoking a certificate issued under this part, a certificate holder shall be provided with written notice of the commissioner's allegations and provided an opportunity for a hearing in accordance with Lab 200.

Source. #7142, eff 11-24-99, EXPIRED: 11-24-07

New. #9878-A eff 2-25-11

Lab 408.17 Violations and Penalties.

(a) Any TPA who violates any of the provisions of this part shall have civil penalties imposed as provided in RSA 281-A:60, I(r), as follows:

(1) A violation of Lab 408.03(a) shall result in a civil penalty of up to $2,500.00; and

(2) Each individual violation of the other provisions of these rules shall result in a civil penalty of up to $500.00 for the first violation, and each subsequent violation shall result in the civil penalty increasing by $500.00 per violation up to a maximum civil penalty of $2,500.00 for each violation.

Source. #7142, eff 11-24-99, EXPIRED: 11-24-07

New. #9878-A eff 2-25-11

Lab 408.18 Application Form.

(a) TPAs wishing to do business in this state shall complete an application on a form providing the following information:

(1) The name, address and federal identification number of the TPA;

(2) Any trade name used by the TPA;

(3) The state of domicile of the TPA; and

(4) The name, address, telephone number and title of the contact person for the TPA.

(b) The application form shall be completed and signed by an officer or authorized representative of the TPA. The complete application form shall be verified and filed at the department on initial application and annually thereafter. The filing fee of $200.00 shall accompany the initial application, and a filing fee of $100.00 shall accompany a renewal application.

(c) An application shall not be deemed to be filed until the commissioner has received all of the information necessary to properly process the application.

(d) An application by a corporation, limited partnership or limited liability company shall be accompanied by a current certificate of good standing, from the secretary of state of New Hampshire.

(e) Each applicant for a certificate of authority as a TPA shall indicate on the application whether he or she has:

(1) Ever been denied a license or certificate of authority as an insurance agent, broker, TPA or claims adjuster;

(2) Been previously licensed or authorized as an insurance agent, broker, TPA or claims adjuster;

(3) Had a license or certificate of authority as an insurance agent, broker, TPA or claims adjuster, suspended or revoked or has been denied the renewal of such license; and

(4) Had any contract as an agent or TPA for a self-insurer canceled for cause and if so, the facts concerning that action.

Source. #7142, eff 11-24-99, EXPIRED: 11-24-07

New. #9878-B, eff 2-25-11

APPENDIX

Rule

Specific State Statute which the Rule Implements

Lab 401.01

RSA 281-A:5, III; RSA 281-A:5-a

Lab 402.01

RSA 281-A:5-a

Lab 402.02

RSA 281-A:5-a

Lab 402.03

RSA 281-A:5, III; RSA 281-A:5-a

Lab 402.04

RSA 281-A:2, XII

Lab 402.05

RSA 281-A:5-a

Lab 402.06

RSA 281-A:5

Lab 402.07

RSA 281-A:5-b

Lab 402.08

RSA 281-A:5-a; RSA 281-A:5-b

Lab 402.09

RSA 281-A:5-a; RSA 281-A:5-b

Lab 402.10

RSA 281-A:5; RSA 281-A:5-a; RSA 281-A:5-b

Lab 402.11

RSA 281-A:5

Lab 402.12

RSA 281-A:5; RSA 281-A:11

Lab 402.13

RSA 281-A:5-a; RSA 281-a:5-b

Lab 402.14

RSA 281-A:5-a; RSA 281-A:5-b

Lab 402.15

RSA 281-A:5-a; RSA 281-A:5-b; RSA 281-A:5-c

Lab 402.16

RSA 281-A:5-a; RSA 281-A:5-b

Lab 403.01

RSA 281-A:5, III; RSA 281-A:5-a

RSA 281-A:5-b; RSA 281-A:5-c

Lab 403.02

RSA 281-A:5-c

Lab 403.03

RSA 281-A:5-a; RSA 281-A:5-b; RSA 281-A:5-c

Lab 403.04

RSA 281-A:7

Lab 404

RSA 281-A:2, VIII, XI; RSA 281-A:5-a

RSA 281-A:5-c; RSA 281-A:5, III; RSA 281-A:7

Lab 405.01

RSA 281-A:5, III; RSA 281-A:5-a

Lab 405.02

RSA 281-A:5, III; RSA 281-A:5-a

RSA 281-A:5-b; RSA 281-A:5 �c

Lab 405.03-Lab 405.04

RSA 281-A:5, I, III; RSA 281-A:5-a

RSA 281-A:5-b; RSA 281-A:5-c

Lab 406-407

Repealed

Lab 408

RSA 281-A:5-d, RSA 281-A:60, I (r).



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