§ 85A-205. Oklahoma Option Insured Guaranty Fund - Oklahoma Option Self-insured Guaranty Fund.

A.  There are established within the Office of the State Treasurer two separate funds:

1.  The Oklahoma Option Insured Guaranty Fund; and

2.  The Oklahoma Option Self-insured Guaranty Fund.

B.  The funds established pursuant to subsection A of this section shall be for the purpose of continuation of benefits under this act for covered claims that are due and unpaid or interrupted due to the inability of the insurer or sponsor of a self-insured plan, as applicable, to meet its compensation obligations because its financial resources, security deposit, guaranty agreements, surety agreements and excess insurance are either inadequate or not immediately accessible for the payment of benefits.  Monies in such funds, including interest, are not subject to appropriation and shall be expended to compensate employees for eligible benefits for a compensable injury under this act, pay outstanding workers' compensation obligations of the impaired insurer, and for all claims for related administrative fees, operating costs, attorney fees, and other costs reasonably incurred by the Oklahoma Property and Casualty Guaranty Association in the performance of its duties under this act.  Expenditures from such funds shall be made on warrants issued by the State Treasurer against claims as prescribed by law.  Such funds shall be subject to audit the same as state funds and accounts, the cost for which shall be paid for from the funds.  A "covered claim" has the meaning given to it pursuant to paragraph 7 of Section 2004 of Title 36 of the Oklahoma Statutes.

C.  The funds established under this section shall be administered, disbursed, and invested under the direction of the Oklahoma Property and Casualty Insurance Guaranty Association established by Section 2005 of Title 36 of the Oklahoma Statutes.

D.  The funds established under this section shall be funded from the following sources:

1.  Insured Guaranty Fund:

Until the Insured Guaranty Fund contains Two Million Dollars ($2,000,000.00) or if the amount in the fund falls below One Million Dollars ($1,000,000.00), each insurer shall be assessed a fee equal to two percent (2%) of all gross direct premiums written during each quarter of the calendar year for insurance covering a benefit plan under this act after deducting from such gross direct premiums, return premiums, unabsorbed portions of any deposit premiums, policy dividends, safety refunds, savings and other similar returns paid or credited to policyholders.  The assessment shall be paid to the Insured Guaranty Fund, care of the Commission, no later than the fifteenth day of the month following the close of each quarter of the calendar year in which the gross direct premium is collected or collectible.  No insurer may be assessed in any year an amount greater than two percent (2%) of the net direct written premiums of that insurer or one percent (1%) of that surplus of the insurer as regards policyholders for the calendar year preceding the assessment on the kinds of insurance in the account, whichever is less; and

2.  Self-insured Guaranty Fund:

Until the Self-insured Guaranty Fund contains One Million Dollars ($1,000,000.00) or if the amount in the fund falls below Seven Hundred Fifty Thousand Dollars ($750,000.00), each self-insurer shall be assessed a fee at the rate of one percent (1%) of the total compensation for permanent partial disability awards paid out during each quarter of the calendar year by the employers.  The fee shall be paid to the Self-insured Guaranty Fund, care of the Commission, no later than the fifteenth day of the month following the close of each quarter of the calendar year.  The fee shall be determined using a rate equal to the proportion that the deficiency in the fund attributable to self-insurers bears to the actual paid losses of all self-insurers for the preceding calendar year.  Each self-insurer shall provide the Commission with the information necessary to determine the amount of the fee to be assessed.

E.  The Guaranty Association shall create a separate account for each fund which may not be commingled with any other account managed by the Guaranty Association.

F.  On determination by the Commission that a self-insurer has become an impaired insurer, the Commission shall release the security required by paragraph 2 of subsection B of Section 111 of this act and advise the Guaranty Association of the impairment.  Claims administration, including processing, investigating and paying valid claims against an impaired self-insurer under this act, may include payment by the surety that issued the surety bond or be under a contract between the Commission and an insurance carrier, appropriate state governmental entity or an approved service organization.

G.  The Guaranty Association shall be a party in interest in all proceedings involving any claims for benefits under this act with respect to an impaired insurer and shall have all rights of subrogation of the impaired insurer.  In those proceedings, the Guaranty Association may assume and exercise all rights and defenses of the impaired insurer, including, but not limited to, the right to:

1.  Appear, defend and appeal claims;

2.  Receive notice of, investigate, adjust, compromise, settle and pay claims; and

3.  Investigate, handle and contest claims.

H.  The Guaranty Association may also:

1.  Retain persons necessary to handle claims and perform other duties of the Guaranty Association;

2.  Sue or be sued;

3.  Negotiate and become a party to such contracts as are necessary to carry out the purposes of this act; and

4.  Exercise any other powers necessary to perform its duties under this act.

I.  No monies deposited to the funds shall be subject to any deduction, tax, levy or any other type of assessment.

J.  An impaired self-insurer shall be exempt from assessments until it is no longer impaired.

K.  Unless provided otherwise in this act, all fines and penalties assessed under this act shall be paid to the Commission for deposit into the funds established in this section in equal amounts.

Added by Laws 2013, c. 208, § 112, eff. Feb. 1, 2014.