S-4271               _______________________________________________

                                                   SENATE BILL NO. 6735

                        _______________________________________________

State of Washington                               51st Legislature                              1990 Regular Session

By Senators Patrick, Lee, Matson and Barr

Read first time 1/24/90 and referred to Committee on  Economic Development & Labor.

AN ACT Relating to employer workers' compensation group self-insurance; and adding a new section to chapter 51.14 RCW.

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

NEW SECTION. Sec. 1.  A new section is added to chapter 51.14 RCW to read as follows:

          (1) Fifteen or more employers who are members of an organization may enter into agreements to form self-insurance groups for the purposes of this chapter if:

          (a) The formation and operation of the group self-insurance program will improve accident prevention and claim management for the employers in the group; and

          (b) The organization meets the following conditions:

          (i) The organization has been in existence for at least two years;

          (ii) The organization was formed for a purpose other than that of obtaining workers' compensation coverage under this section; and

          (iii) The occupations or industries of the employers within the organization are substantially similar, taking into consideration the nature of the services being performed by workers of such employers.

          (2) The self-insurance groups formed under this section shall be organized and operated under rules promulgated by the director under RCW 51.14.160.

          (3) The self-insurance group shall be deemed an employer for the purposes of this chapter, except RCW 51.14.077, and may qualify as a self-insurer if it meets all the other requirements of this chapter.

          (4)(a) A group self-insurers' insolvency fund is established to provide for the unsecured benefits paid to the injured workers of group self-insured employers under this title for insolvent or defaulting groups or member employers and for the department's associated administrative costs, including attorneys' fees.  The group self-insurers' insolvency trust fund shall be funded by an insolvency assessment which shall be levied on a post-insolvency basis and after the defaulting group's and individual member employers' security deposit assets and reinsurance, if any, have been exhausted.  Insolvency assessments shall be imposed on all group self-insurers except school districts and hospitals.  The manner of imposing and collecting assessments to the insolvency fund shall be set forth in rules adopted by the department to ensure that group self-insured employers pay into the fund in proportion to their claim costs.  The department's rules shall provide that self-insurance groups or member employers who have surrendered their certification shall be assessed for a period of not more than three calendar years following the termination date of their certification.

          (b) The director shall adopt rules to carry out the purposes of this subsection, including but not limited to:

          (i) Governing the formation of the group self-insurers' insolvency trust for the purpose of this chapter;

          (ii) Governing the organization and operation of the self-insurers' trust to assure compliance with the requirements of this chapter;

          (iii) Requiring adequate accountability of the collection and disbursement of funds in the group self-insurers' insolvency trust; and

          (iv) Any other provisions necessary to carry out the requirements of this chapter.