MISSISSIPPI LEGISLATURE

1997 Regular Session

To: Insurance

By: Representative Stevens

AN ACT TO AMEND SECTION 71-3-75, MISSISSIPPI CODE OF 1972, TO REQUIRE EMPLOYERS TO BE MEMBERS OF THE SAME PROFESSIONAL ASSOCIATION OR TRADE AS THE OTHER MEMBERS OF A SELF-FUNDED WORKERS' COMPENSATION POOL; TO DEFINE TRADE OR PROFESSIONAL ASSOCIATION; AND FOR RELATED PURPOSES. 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. Section 71-3-75, Mississippi Code of 1972, is amended as follows:

71-3-75. (1) Insurance of liability: An employer liable under this chapter to pay compensation shall insure payment of such compensation by a carrier authorized to insure such liability in this state unless such employer shall be exempted from doing so by the commission.

(2) Exemption from insuring: An employer desiring to be exempt from insuring his liability for compensation shall make application to the commission, showing his financial ability to pay such compensation and agreeing as a condition for the granting of the exemption to faithfully report all injuries under compensation according to law and the requirement of the commission, and to comply with the provisions of this chapter and the rules of the commission pertaining to the administration thereof; whereupon the commission by written order may make such exemption. The commission may from time to time require further statement of financial ability of such employer to pay compensation and may, upon ten (10) days' notice in writing, for financial reasons or for failure of the employer to faithfully discharge his obligations according to the agreements contained in his application for exemption, revoke its order granting such exemption, in which case such employer shall immediately insure his liability. As a condition for the granting of an exemption, the commission shall have authority to require the employer to furnish such security as it may consider sufficient to insure payment of all claims under compensation. Where the security is in the form of a bond or other personal guaranty, the commission may, at any time either before or after the entry of an award upon at least ten (10) days' notice and opportunity to be heard, require the sureties to pay the amount of the award, the same to be enforced in like manner as the award itself may be enforced. Where an employer procures an exemption as herein provided and thereafter enters into any form of agreement for insurance coverage with an insurance company or interinsurer not licensed to operate in this state, his conduct shall automatically operate as a revocation of such exemption. An order exempting an employer from insuring his liability for compensation shall be null and void if the application contains a financial statement which is false in any material respect. The commission shall revoke the self-insurance permit if the employer is found to have directly or indirectly induced an employee to forego his right to workers' compensation benefits.

(3) Pooling of liabilities: The commission may, under such rules and regulations as it prescribes, permit two (2) or more employers engaged in a common type of business activity or pursuit, or having other reasons to associate, to enter into agreements to pool their liabilities under this section for the purpose of qualifying as self-insurers, and each employer member of such approved group shall be classified as a self-insurer.

(a) Employers pooling liabilities under this section must be members of the same bona fide trade or professional association as the other members of that pool.

(b) For purposes of this subsection, a bona fide trade or professional association shall mean a trade or professional association which: (i) does not have as its primary function the sponsorship, operation or management of a self-insured pool under this subsection; (ii) shall have members that support the trade or professional association by the regular payment of dues; (iii) is chartered and domiciled in the State of Mississippi; and (iv) has been in existence for a period of five (5) or more years or was in existence before January 1, 1997.

SECTION 2. This act shall take effect and be in force from and after July 1, 1997.