State SealARIZONA HOUSE OF REPRESENTATIVES

 

HB 2137: workers' compensation; excess insurance policies

PRIME SPONSOR: Representative Biasiucci, LD 5

BILL STATUS: House Engrossed

 

 

Overview

☐ Prop 105 (45 votes) ☐ Prop 108 (40 votes) ☐ Emergency (40 votes) ☐ Fiscal NoteDesignates the Special Fund as the successor in interest to all excess insurance policies.

History

The Industrial Commission of Arizona (ICA) regulates the workers' compensation insurance industry.  The ICA's responsibilities include occupational safety and health issues, youth employment laws, wage claim dispute resolutions, minimum wage and other labor related issues. The ICA provides workers' compensation coverage for claimants of uninsured employers, insolvent insurance carriers, and self-insured employers.  Additionally, the ICA processes workers’ compensation claims involving workers injured on the job through no-fault of their own. The ICA is funded by an annual assessment on workers' compensation premiums that cannot exceed 3%.

Current law requires employers to secure workers' compensation for their employees either:

1.       By obtaining workers' compensation insurance with a licensed insurance carrier; or

2.       By furnishing satisfactory proof of financial ability to pay the compensation directly (self-insured) or through a workers' compensation pool (A.R.S. § 23-961).

Pursuant to A.R.S. § 23-966, the Special Fund assumes liability for all workers’ compensation claims against self-insured employers who fail to pay a workers' compensation claim. The Special Fund will pay medical and compensation benefits to the injured employee.

The ICA may levy an assessment on workers' compensation insurance premiums at a rate that is no more than is necessary to keep the Special Fund actuarially sound (A.R.S. § 23-1065).  According to the ICA the current rate is 0%.

Provisions

1.       Asserts the Special Fund is the successor in interest to all excess insurance policies in effect at the time of an assignment that insure any part of the self-insured employer's financial obligations (Sec. 1).

2.       Specifies the recovery rights of the Special Fund are subject to applicable coverage terms and policy limits in the excess policy (Sec. 1).

3.       Requires the excess insurer to directly pay the Special Fund for any covered amounts spent (Sec. 1).

4.       Stipulates the Special Fund has a claim against the employer for amounts spent or anticipated to be spent, unless recovered from the excess insurer (Sec. 1).

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8.       Fifty-fourth Legislature                       HB 2137

9.       First Regular Session                            Version 3: House Engrossed

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