MISSISSIPPI LEGISLATURE

1998 Regular Session

To: Insurance

By: Representative Guice

AN ACT TO AMEND SECTION 71-3-75, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT AN EMPLOYER WHO TERMINATES HIS MEMBERSHIP IN A SELF-INSURED GROUP UNDER THE WORKERS' COMPENSATION LAWS IS LIABLE FOR ANY MONIES HE OWES TO THE GROUP; TO PROVIDE THAT A CIVIL PENALTY MAY BE ASSESSED UPON THOSE EMPLOYERS WHO FAIL TO PAY THE MONIES OWED; 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.

SECTION 2. This act shall take effect and be in force from and after July 1, 1998.