House Bill 523

AN ACT TO AMEND SECTION 71-3-111, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT, WHENEVER A POLICY IS PURCHASED UNDER THE MISSISSIPPI ASSIGNED RISK POOL AND A MINIMUM PREMIUM APPLIES TO THE POLICY, THE INSURER SHALL PROVIDE WRITTEN NOTICE TO THE INSURED THAT THE MINIMUM PREMIUM IS FULLY EARNED; TO PROVIDE THAT ANY EMPLOYER OR PERSON AFFECTED BY THE OPERATION OF THE MISSISSIPPI WORKERS' COMPENSATION ASSIGNED RISK PLAN OR THE ACTIONS OF A SERVICING CARRIER OF THE PLAN WHO HAS A DISPUTE WITH RESPECT TO ANY ASPECT OF THE PLAN OR THE ACTIONS OF A SERVICING CARRIER OF THE PLAN SHALL EXHAUST ALL ADMINISTRATIVE DISPUTE RESOLUTION REMEDIES PROVIDED FOR IN THE PLAN PRIOR TO COMMENCEMENT OF A CIVIL ACTION AGAINST ANY SERVICING CARRIER OF THE PLAN; TO PROVIDE THAT PUNITIVE DAMAGES SHALL NOT BE RECOVERABLE AGAINST ANY SERVICING CARRIER OF THE MISSISSIPPI WORKERS' COMPENSATION ASSIGNED RISK PLAN; AND FOR RELATED PURPOSES.

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

SECTION 1. Section 71-3-111, Mississippi Code of 1972, is amended as follows:

71-3-111. (1) The Department of Insurance is directed to promulgate such rules and regulations as will enable the department to provide the "Mississippi Workers' Compensation Assigned Risk Plan" for the assignment of risks which in good faith are entitled to insurance under this chapter but which, because of unusual conditions and circumstances, are unable to obtain such insurance.

(2) The Commissioner of Insurance is designated as the Director of the Mississippi Workers' Compensation Assigned Risk Plan, and he shall design the assigned risk plan in such a manner that the plan should become self-supporting with no outside assessments. The commissioner may contract for a safety program.

(3) The Commissioner of Insurance is authorized to advertise and contract with any workers' compensation insurance carriers that are licensed and writing workers' compensation insurance within the State of Mississippi or providers of workers' compensation claims and loss control services within the State of Mississippi to be servicing carriers. A servicing carrier shall provide all insurance services to employers insured under the plan as are otherwise rendered to those covered by policies voluntarily written by companies licensed to write workers' compensation insurance in the state.

(4) The Commissioner of Insurance may establish the "Mississippi Workers' Compensation Assigned Risk Pool" as a reinsurance mechanism for the "Mississippi Workers' Compensation Assigned Risk Plan" to accomplish the equitable distribution of all underwriting profit or loss of the plan to the companies licensed to write workers' compensation insurance in the state in direct proportion to their share of the total voluntary workers' compensation premiums written in the state. If established, all insurance companies licensed to write workers' compensation insurance under this chapter shall be members of and participants in this pool.

(5) The Commissioner of Insurance shall be responsible for the administration of both the "Mississippi Workers' Compensation Assigned Risk Plan" and the "Mississippi Workers' Compensation Assigned Risk Pool" but may designate an administrator of either or both, at his discretion. The Commissioner of Insurance may levy special assessments against the Mississippi Workers' Compensation Assigned Risk Pool, if necessary, to provide funding for administrative expenses.

(6) Whenever a workers' compensation policy is purchased using the Mississippi Assigned Risk Pool and a minimum premium applies to the policy, the insurer shall notify the insured in writing before the policy is issued that the minimum premium will be fully earned and no refund of any premium will be given regardless of the date of cancellation or the reason for cancellation. Such notice shall be in letter form or in the form of a stamp clearly visible on the policy face page.

( * * *67) The commissioner is hereby authorized to establish a temporary joint underwriting association that shall consist of all insurers authorized to write, or engaged in writing, within this state on any basis, workers' compensation insurance as reported in the companies' annual statements.

The purpose of the association shall be to provide a market for workers' compensation insurance on a self-supporting basis.

The association shall not be established nor begin underwriting operations until the commissioner, after due hearing and investigation, has determined that workers' compensation insurance is not readily available. A determination that such insurance is not readily available shall be necessary before the association begins operations.

Upon such determination, the association shall be authorized to issue policies of workers' compensation insurance.

If the commissioner determines at any time that workers' compensation insurance can be made readily available in the voluntary market, the association shall then cease its underwriting operations for such workers' compensation insurance that has been determined to be available in the voluntary market.

The Commissioner of Insurance is authorized to promulgate rules and regulations to effectuate the purposes of this section, to include levying assessments, if necessary, to provide funding for start-up and administrative expenses.

(8) Any employer or person affected by the operation of the Mississippi Workers' Compensation Assigned Risk Plan or the actions of a servicing carrier of the plan who has a dispute with respect to any aspect of the plan or the actions of a servicing carrier of the plan shall exhaust all administrative dispute resolution remedies provided for in the plan prior to commencement of a civil action against any servicing carrier of the plan.

(9) Punitive damages shall not be recoverable against any servicing carrier of the Mississippi Workers' Compensation Assigned Risk Plan.

SECTION 2. This act shall take effect and be in force from and after July 1, 2016.