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Do You Know the Rule? Or. Excess Insurance Requirements

21 Jun, 2023 Frank Ferreri

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Salem, OR ( -- When it comes to self-insured employers, states often carve out special rules focused on that category, and Oregon is one such place.

Once such rule involves excess insurance requirements, which are broken down in the chart below.

Basic excess insurance requirementsA self-insured employer must have excess workers’ compensation insurance coverage appropriate for the employer’s potential liability with an insurer authorized to do business in Oregon, subject to the following:
(1) The policy providing such coverage and any subsequent endorsements must be filed with the director within 30 days after the effective date of the policy or endorsement
(2) A self-insured public utility with assets in excess of $500 million may obtain the required excess workers’ compensation insurance coverage from an eligible surplus lines insurer
(3) The excess insurance policy must include a provision for reimbursement to the director of all expenses paid by the director on behalf of the self-insured as if the director were the insured employer, subject to the policy limitations or amounts and limits of liability to the insured employer
(4) Coverage must be continuous and remain in effect from the date of certification until the certification is revoked or canceled
(5) Coverage must be specific on a per-occurrence basis
(6) Coverage may include aggregate excess insurance
(7) Coverage may include a deductible endorsement acceptable to the director
(8) Excess insurance does not relieve any self-insured employer from full responsibility for claims processing and the payment of compensation. The excess insurance policy may not contain provisions or endorsements that do not comply with Oregon law, including but not limited to, provisions or endorsements that allow the excess insurer to process claims, pay compensation, or change the location where a claim is processed.
(9) A self-insured employer may not transfer claims to any excess insurer or service company acting on behalf of an excess insurer for the processing of the employer’s claims, regardless of the types and amounts of excess coverage
(10) When an excess insurance policy is canceled by the excess insurer or the employer, a copy of the notice of cancellation must be filed with the director at least 30 days before the effective date of cancellation
Self-insured retention level for a self-insured groupThe self-insured retention level for a self-insured employer group’s excess insurance policy must not be less than $300,000
Changes in the self-insured retention levelChanges in the self-insured retention level and policy limits of the excess insurance require prior approval of the director. Proposed changes must be submitted to the director for approval at least 30 days before the effective date of the change. The director may require a reduction in the self-insured retention level or an increase in the policy limits by order
When determining and approving the retention and limitation levels of the excess insurance, the director will consider:
--> The employer’s financial status
--> The employer’s financial strength 
--> The employer's risk and exposure
--> The employer's claim history
--> The amount of the employer's required security deposit
Per-accident deductible endorsementsAny endorsements addressing a per-accident deductible in excess of a self-insured employer group’s retention level must be approved by the director before the effective date of the endorsement, subject to the following:
(1) In determining whether to approve a deductible endorsement, the director will consider the group’s retention level, policy limits, and the items considered in approving retention and limitation levels
(2) The director will not approve per-accident deductible endorsements in excess of the retention level that contain language allowing the excess insurer to limit its obligations
Director's orders to amend excess insuranceA self-insured employer must comply with an order of the director to reduce the self-insured retention level or increase the policy limitation or amounts and limits of liability of the excess insurance within 30 days after the order’s mailing date

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    About The Author

    • Frank Ferreri

      Frank Ferreri, M.A., J.D. covers workers' compensation legal issues. He has published books, articles, and other material on multiple areas of employment, insurance, and disability law. Frank received his master's degree from the University of South Florida and juris doctor from the University of Florida Levin College of Law.

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