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ARIZONA STATE SENATE
Fifty-Fourth Legislature, First Regular Session
workers' compensation; excess insurance policies
Purpose
Stipulates that the Industrial Commission of Arizona (ICA) Special Fund (Special Fund) is the successor in interest to all worker' compensation excess insurance policies.
Background
Current statute requires employers to secure workers' compensation to their employees by one of two potential methods.
An employer may insure and keep insured the payment of workers' compensation with an insurance carrier authorized by the Director of the Department of Insurance to write workers' compensation insurance in Arizona.
Alternatively, an employer may furnish to the ICA satisfactory proof of financial ability to pay the compensation directly or through a workers' compensation pool approved by the ICA in the amount and manner, and when due as provided by statute. These requirements may be satisfied by furnishing to the ICA satisfactory proof that the employer is a member of an ICA-approved workers' compensation pool. The ICA may require a deposit or any other security from the employer for the payment of compensation liabilities in an amount fixed by the ICA, but not less than $100,000 for workers' compensation liabilities. If the employer does not fully comply, the ICA may revoke the authority of the employer to pay compensation directly (A.R.S. § 23-961).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Stipulates that 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 a self-insured employer's financial obligations.
2. Subjects the Special Fund's recovery rights to applicable coverage terms and policy limits in an excess policy.
3. Requires an excess insurer to make payment directly to the Special Fund for all covered amounts, including administrative costs, necessary expenses and attorney fees to the extent covered by the excess policy.
4. Becomes effective on the general effective date.
House Action
COM 1/22/19 DP 9-0-0-0
3rd Read 2/11/19 60-0-0
Prepared by Senate Research
March 11, 2019
CS/kja