§ 85A-204. Securing compensation.

A.  A qualified employer may self-fund or insure benefits payable under the benefit plan, employers' liability under this act, and any other insurable risk related to its status as a qualified employer with any insurance carrier authorized to do business in this state.

B.  Insurance coverage or surety bond obtained by a qualified employer shall be from an admitted or surplus lines insurer with an AM Best Rating of B+ or better.  The Insurance Department has no duty to approve insurance rates charged for this coverage.  A qualified employer shall secure compensation to covered employees in one of the following ways:

1.  Obtaining accidental insurance coverage in an amount equal to the compensation obligation;

2.  Furnishing satisfactory proof to the Commissioner of the employer's financial ability to pay the compensation.  The Commissioner, under rules adopted by the Insurance Department or the Commissioner for an individual self-insured employer, shall require an employer that has:

a.less than one hundred employees or less than One Million Dollars ($1,000,000.00) in net assets to:

(1)deposit with the Commissioner securities, an irrevocable letter of credit or a surety bond payable to the state, in an amount determined by the Commissioner which shall be at least an average of the yearly claims for the last three (3) years, or

(2)provide proof of excess coverage with such terms and conditions as is commensurate with their ability to pay the benefits required by the provisions of this act,

b.one hundred or more employees and One Million Dollars ($1,000,000.00) or more in net assets to:

(1)secure a surety bond payable to the state, or an irrevocable letter of credit, in an amount determined by the Commissioner which shall be at least an average of the yearly claims for the last three (3) years, or

(2)provide proof of excess coverage with such terms and conditions as is commensurate with their ability to pay the benefits required by the provisions of this act; or

3.  Any other security as may be approved by the Commissioner.

C.  The Commissioner may waive the requirements of this section in an amount which is commensurate with the ability of the employer to pay the benefits required by the provisions of this act.  Irrevocable letters of credit required by this section shall contain such terms as may be prescribed by the Commissioner and shall be issued for the benefit of the state by a financial institution whose deposits are insured by the Federal Deposit Insurance Corporation.

D.  An employer who does not fulfill the requirements of this section is not relieved of the obligation for compensation to a covered employee.  The security required under this section, including any interest thereon, shall be maintained by the Commissioner as provided in this act until each claim for benefits is paid, settled, or lapses under this act, and costs of administration of such claims are paid.

E.  Any bond shall be filed and held by the Commissioner and shall be for the exclusive benefit of any covered employee of a qualified employer.

F.  Any security held by the Commissioner may be used to make a payment to or on behalf of a covered employee provided the following requirements are met:

1.  The covered employee sustained an occupational injury that is covered by the qualified employer's benefit plan;

2.  The covered employee's claim for payment of a specific medical or wage replacement benefit amount has been accepted by the plan administrator of the benefit plan or acknowledged in a final judgment or court order assessing a specific dollar figure for benefits payable under the benefit plan;

3.  The covered employee is unable to receive payment from the benefit plan or collect on such judgment or court order because the qualified employer has filed for bankruptcy or the benefit plan has become insolvent; and

4.  The covered employee is listed as an unsecured creditor of the qualified employer because of the acceptance of such claim by the plan administrator of the benefit plan or judgment or court order assessing a specific dollar figure for benefits payable under the benefit plan.

G.  The Commissioner shall promulgate rules to carry out the provisions of this section including those establishing the procedure by which a covered employee may request and receive payment from the security held by the Commissioner.

H.  The benefit plan may provide some level of benefits for sickness, injury or death not due to an occupational injury.

I.  A qualified employer shall hold harmless any insurance agent or broker who sold the employer a benefits program compliant with the Oklahoma Employee Injury Benefit Act if the qualified employer is sued in district court for an injury arising in the course and scope of employment.

Added by Laws 2013, c. 208, § 111, eff. Feb. 1, 2014.