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Substitute House Bill No. 5632

PUBLIC ACT NO. 96-267

AN ACT CONCERNING PRIVATE EMPLOYER WORKERS' COMPENSATION GROUP SELF-INSURANCE.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. (NEW) The provisions of this act shall apply to workers' compensation self-insurance groups here and after formed in accordance with this act. This act shall not apply to public employees or governmental entities. Groups which are issued a certificate of approval by the commissioner shall be subject to the provisions of sections 38a-14 and 38a-17 of the general statutes, but shall not be deemed to be insurers or insurance companies and shall not be subject to the provisions of title 38a of the general statutes and any regulations issued pursuant to said title except as otherwise provided.

Sec. 2. (NEW) As used in this act: (1) "Administrator" means an individual, partnership or corporation engaged by a workers' compensation self-insurance group's board of trustees to carry out the policies established by the group's board of trustees and to provide day-to-day management of the group. (2) "Commissioner" means the Insurance Commissioner. (3) "Insolvent" or "insolvency" means the inability of a workers' compensation self-insurance group to pay its outstanding lawful obligations as they mature in the regular course of business, as may be shown either by an excess of its required reserves and other liabilities over its assets or by its not having sufficient assets to reinsure all of its outstanding liabilities after paying all accrued claims owed by it. (4) "Net premium" means premium derived from standard premium adjusted by any advance premium discounts. (5) "Service company" means a person or entity which provides services not provided by the administrator, including but not limited to: (A) Claims adjustment; (B) Safety engineering; (C) Compilation of statistics and the preparation of premium, loss and tax reports; (D) Preparation of other required self-insurance reports; (E) Development of members' assessments and fees; and (F) Administration of a claim fund. (6) "Standard premium" means the premium derived from the manual rates adjusted by experience modification factors but before advance premium discounts. (7) "Workers' compensation", when used as a modifier of "benefits", "liabilities" or "obligations", includes both workers' compensation and employers' liability. (8) "Workers' compensation self-insurance group" or "group" means a not-for-profit association consisting of fifteen or more employers who are engaged in the same or similar type of business, who are members of the same bona fide trade or professional association which has been in existence for not less than five years, and who enter into agreements to pool their liabilities for workers' compensation benefits and employers' liability.

Sec. 3. (NEW) No person, association or other entity shall act as a workers' compensation self-insurance group unless it has received approval by the commissioner to transact such business.

Sec. 4. (NEW) (a) A proposed workers' compensation self-insurance group shall file with the commissioner its application for a certificate of approval accompanied by a nonrefundable filing fee in the amount of two hundred fifty dollars. Such application shall include the group's name, location of its principal office, date of organization, name and address of each member and such other information as the commissioner may reasonably require, together with the following: (1) Proof of compliance with the provisions of subsection (b) of this section; (2) A copy of the articles of association, if any; (3) A copy of agreements with the administrator and with any service company; (4) A copy of the bylaws of the proposed group; (5) A copy of the agreement between the group and each member securing the payment of workers' compensation benefits, which shall include a provision for payment of assessments as provided in section 19 of this act; (6) Designation of the initial board of trustees and administrator; (7) The address in this state where the books and records of the group shall be maintained at all times; (8) A pro forma financial statement on a form acceptable to the commissioner showing the financial ability of the group to pay the workers' compensation obligations of its members; (9) An actuarial feasibility study prepared (i) by an independent person with a designation of Fellow of the Casualty Actuarial Society (FCAS) or (ii) by a member of the American Academy of Actuaries (MAAA) with experience in making Connecticut workers' compensation actuarial projections. Such study shall be based on a consolidated summary of the historical workers' compensation claims loss experience and the allocated loss expenses of the member applicants of the group over a period of the most recent completed three full policy years, as well as the current partially completed policy year to the most current quarter under the current policy; and (10) Proof of payment to the group by each member of not less than twenty-five per cent of that member's first year estimated annual net premium on a date prescribed by the commissioner. Each payment shall be considered to be part of the first year premium payment of each member, if the proposed group is granted a certificate of approval by the commissioner.

(b) To obtain and to maintain its certificate of approval, a workers' compensation self-insurance group shall comply with the following requirements as well as any other requirements established under the provisions of chapter 568 of the general statutes. Such group shall have: (1) A combined net worth of all members of a group of private employers of at least five million dollars. Such group shall maintain a minimum working capital of two hundred fifty thousand dollars. The minimum premium or portion thereof required in subdivision (1) of subsection (a) of section 18 of this act, shall be used to satisfy the working capital requirements of this section. (2) A security, in the amount of five hundred thousand dollars or more and such security shall be in the form of a surety bond, security deposit or financial security endorsement or any combination thereof. If a surety bond is used to meet the security requirement, it shall be issued by a corporate surety company authorized to transact business in this state. If a security deposit is used to meet the security requirement, such securities shall be limited to bonds or other evidence or indebtedness issued, assumed or guaranteed by the United States of America or by an agency or instrumentality thereof; certificates of deposit in a federally insured bank; shares or savings deposits in a federally insured savings and loan association or credit union; or any bond or security issued by a state of the United States of America and backed by the full faith and credit of the state. Any such securities shall be deposited with the State Treasurer and assigned to and made negotiable by the Chairman of the Workers' Compensation Commission pursuant to a trust document acceptable to the commissioner. Interest accruing on a negotiable security so deposited shall be collected and transmitted to the depositor provided the depositor is not in default. A financial security endorsement, issued as part of an acceptable excess insurance contract, may be used to meet all or part of the security requirement. The bond, security deposit or financial security endorsement shall be: (A) For the benefit of the state solely to pay claims and associated expenses; and (B) Payable upon the failure of the group to pay workers' compensation benefits that it is legally obligated to pay. The commissioner may establish and adjust from time to time, requirements for the amount of security based on differences among groups in their size, types of employment, years in existence and other relevant factors. (3) Specific and aggregate excess insurance in a form, in an amount, and by an insurance company acceptable to the commissioner. The commissioner may establish minimum requirements for the amount of specific and aggregate excess insurance based on differences among groups in their size, types of employment, years in existence and other relevant factors, and may permit a group to meet this requirement by placing in a designated depository securities of the type referred to in subdivision (2) of this subsection. (4) An estimated annual standard premium of at least one million dollars during a group's first year of operation and annually thereafter. No single member applicant shall have more than twenty per cent of the total combined standard premium of the group. (5) An indemnity agreement jointly and severally binding the group and each member thereof to meet the workers' compensation obligations of each member. The indemnity agreement shall be in a form prescribed by the commissioner and shall include minimum uniform substantive provisions prescribed by the commissioner. Subject to the commissioner's approval, a group may add other provisions as are necessary to perform its obligations. (6) A fidelity bond for the administrator in a form and amount prescribed by the commissioner. (7) A fidelity bond for the service company in a form and amount prescribed by the commissioner. The commissioner may also require the service company providing claim services to furnish a performance bond in a form and amount he prescribes. (c) A group shall notify the commissioner of any change in the information required to be filed under subsection (a) of this section or in the manner of its compliance with subsection (b) of this section no later than thirty days after the change.

(d) The commissioner shall evaluate the information provided by the application required to be filed under subsection (a) of this section to assure that no breach in funding exists and that the funds necessary to pay workers' compensation benefits will be available.

(e) The commissioner shall act upon a completed application for a certificate of approval within sixty days. If, because of the number of applications, the commissioner is unable to act upon an application within the initial sixty-day period, the commissioner shall have an additional sixty days to act.

(f) The commissioner shall issue to the group a certificate of approval upon finding that the proposed group has met all requirements, or the commissioner shall issue an order refusing the certificate setting forth reasons for such refusal and his finding as to why the proposed group does not meet all of the requirements.

(g) Each workers' compensation self-insurance group shall be deemed to have appointed the commissioner as its agent for receipt of service of legal process pursuant to section 38a-25 of the general statutes. The appointment shall be irrevocable, shall bind any successor in interest, and shall remain in effect as long as there is in this state any obligation or liability of the group for workers' compensation benefits.

Sec. 5. (NEW) (a) The certificate of approval issued by the commissioner to a workers' compensation self-insurance group shall authorize the group to provide workers' compensation benefits. The certificate of approval shall remain in effect until terminated at the request of the group or revoked by the commissioner, pursuant to the provisions of section 22 of this act or any other provision of title 38a of the general statutes.

(b) The commissioner shall not grant the request of any group to terminate its certificate of approval unless such group has insured or reinsured all incurred workers' compensation obligations with an authorized insurer under an agreement filed with and approved, in writing, by the commissioner. Such obligations shall include both known claims and expenses associated therewith and claims incurred but not reported and expenses associated therewith.

(c) Subject to the approval of the commissioner, any group may merge with another group engaged in the same or similar type of business only if the resulting group assumes in full all obligations of the merging groups. The commissioner may hold a hearing on the merger and shall do so if any party, including any member of any of the merging groups, requests it.

Sec. 6. (NEW) The commissioner may examine the affairs, transactions, accounts, records, assets and liabilities of each group if said commissioner has reasonable cause to believe that such examination is necessary. The expense of such examinations shall be assessed against the group in the same manner that insurers are assessed for examinations.

Sec. 7. (NEW) Each group shall be operated by a board of trustees which shall consist of not less that five persons whom the members of a group elect for stated terms of office. At least two-thirds of the trustees shall be employees, officers or directors of members of the group. The group's service company or any owner, officer, employee of, or any other person affiliated with such service company shall not serve on the board of trustees of the group. All trustees shall be residents of this state or officers of corporations authorized to do business in this state. The board of trustees of each group shall ensure that all claims are paid promptly and take all necessary precautions to safeguard the assets of the group, including all of the following: (1) The board of trustees shall: (A) Maintain responsibility for all moneys collected or disbursed from the group and segregate all moneys into a claims fund account and an administrative fund account. At least seventy per cent of the net premium shall be placed into a designated depository for the sole purpose of paying claims, allocated claims expenses, reinsurance or excess insurance and special fund contributions, including second injury and other loss-related funds. This shall be called the "claims fund account". The remaining net premium shall be placed into a designated depository for the payment of taxes, general regulatory fees and assessments and administrative costs. This shall be called the "administrative fund account". The commissioner may approve an administrative fund account of more than thirty per cent and a claims fund account of less than seventy per cent only if the group shows to the commissioner's satisfaction that: (i) More than thirty per cent is needed for an effective safety and loss control program; or (ii) The group's aggregate excess insurance attaches at less than seventy per cent. (B) Maintain minutes of its meetings and make the minutes available to the commissioner. (C) Designate an administrator to carry out the policies established by the board of trustees and to provide day-to-day management of the group, and delineate in the written minutes of its meetings the areas of authority it delegates to the administrator. (D) Retain an independent certified public accountant to prepare the statement of financial condition required by subsection (a) of section 11 of this act. (2) The board of trustees shall not: (A) Extend credit to individual members for payment of a premium, except pursuant to payment plans approved by the commissioner. (B) Borrow any moneys from the group or in the name of the group except in the ordinary course of business without first advising the commissioner of the nature and purpose of the loan and obtaining prior approval from the commissioner.

Sec. 8. (NEW) (a) An employer joining a workers' compensation self-insurance group after the group has been issued a certificate of approval shall: (1) Submit an application for membership to the board of trustees or its administrator; and (2) Enter into the indemnity agreement required by subparagraph (B) of subdivision (5) of subsection (b) of section 4 of this act. Membership takes effect no earlier than each member's date of approval. The application for membership and its approval shall be maintained as permanent records of the board of trustees.

(b) Individual members of a group shall be subject to cancellation by the group pursuant to the bylaws of the group. In addition, individual members may elect to terminate their participation in the group. The group shall notify the Commissioner and Chairman of the Workers' Compensation Commission of a termination or cancellation of a member within ten days and shall maintain coverage of each cancelled or terminated member for thirty days after notice, at the terminating member's expense, unless the group is notified sooner by the Workers' Compensation Commission that the cancelled or terminated member has procured workers' compensation insurance, has become an approved self-insurer, or has become a member of another group.

(c) The group shall pay all workers' compensation benefits for which each member incurs liability during its period of membership. A member who elects to terminate its membership or is cancelled by a group remains jointly and severely liable for workers' compensation obligations of the group and its members which were incurred during the cancelled or terminated member's period of membership.

(d) A group member shall not be relieved of its workers' compensation liabilities incurred during its period of membership except through payment by the group or the member of required workers' compensation benefits.

(e) The insolvency or bankruptcy of a member shall not relieve the group or any other member of liability for the payment of any workers' compensation benefits incurred during the insolvent or bankrupt member's period of membership.

Sec. 9. (NEW) (a) No service company or its employees, officers or directors shall be an employee, officer or director of, or have either a direct or indirect financial interest in, an administrator. No administrator or its employees, officers or directors shall be an employee, officer or director of, or have either a direct or indirect financial interest in, a service company.

(b) The service contract shall state that unless the commissioner permits otherwise the service company shall handle, to its conclusion, all claims and other obligations incurred during the contract period.

Sec. 10. (NEW) Except for a salaried employee of a group, its administrator or its service company, any person soliciting membership for a workers' compensation self-insurance group shall be licensed pursuant to chapter 702 of the general statutes.

Sec. 11. (NEW) (a) Each group shall submit to the commissioner a statement of financial condition audited by an independent certified public accountant on or before the last day of the sixth month following the end of the group's fiscal year. The financial statement shall be in a form prescribed by the commissioner and shall include, but not be limited to, actuarially appropriate reserves for: (1) Known claims and any associated expenses; (2) Claims incurred but not reported and any associated expenses; (3) Unearned premiums; and (4) Bad debts, which shall be shown as liabilities.

(b) An actuarial opinion regarding reserves for: (1) Known claims and any associated expenses; and (2) Claims incurred but not reported and any associated expenses shall be included in the audited financial statement. The actuarial opinion shall be prepared (i) by an independent person with a designation of Fellow of the Casualty Actuarial Society (FCAS), (ii) by a member of the American Academy of Actuaries (MAAA) with experience in preparing such opinions, or (iii) by any other qualified loss reserve specialist in accordance with the provisions of section 38a-14 of the general statutes.

(c) No person shall make any untrue statement of a material fact, or omit to state a material fact necessary in order to make the statement made, in light of the circumstances under which it is made, not misleading, in connection with the solicitation of membership in a group.

(d) The commissioner may prescribe the format and frequency of other reports which may include, but shall not be limited to, payroll audit reports, summary loss reports and quarterly financial statements and make any regulations necessary to carry out the provisions of this act.

Sec. 12. (NEW) Each workers' compensation self-insurance group, as defined in section 2 of this act, shall pay a tax to the Commissioner of Revenue Services for the calendar year commencing on January 1, 1997, and annually thereafter, at the rate of one and three-quarters per cent of the total net premium received on any new or renewal contract or policy by such group during each such calendar year, which shall be in addition to any other payment required under sections 31-345, 31-354 and 38a-48, of the general statutes, as amended. The provisions of chapter 207 of the general statutes pertaining to the filing of returns, declarations, instalment payments, assessments and collection of taxes, penalties, administrative hearings and appeals imposed on domestic insurance companies shall apply with respect to the charge imposed under this section.

Sec. 13. (NEW) No person shall make a material misrepresentation or omission of a material fact in connection with the solicitation of membership of a group.

Sec. 14. (NEW) Funds not needed for current obligations may be invested by the board of trustees in accordance with sections 38a-102 to 38a-102h, inclusive, of the general statutes, as amended.

Sec. 15. (NEW) (a) Every workers' compensation self-insurance group shall adhere to the uniform classification system, uniform experience rating plan and manual rules filed with the commissioner.

(b) Premium contributions to the group shall be determined by applying the manual rates and rules to the appropriate classification of each member which shall be adjusted by each member's experience credit or debit. Subject to approval by the commissioner, any premium contributions may also be reduced by an advance premium discount factor reflecting the groups expense levels and loss experience.

(c) Notwithstanding the provisions of subsection (b) of this section, a group may apply to the commissioner for permission to utilize its own rates. Such rates shall be based on at least five years of experience of the members of the group.

(d) Each group shall be audited at least annually by an auditor acceptable to the commissioner to verify proper classifications, experience rating, payroll and rates. A report of the audit shall be filed with the commissioner in a form acceptable to the commissioner. A group or any member thereof may request a hearing on any objections to the classifications. If the commissioner determines that as a result of an improper classification, a member's premium contribution is insufficient, he shall order the group to assess that member in an amount equal to the deficiency. If the commissioner determines that as a result of an improper classification a member's premium is excessive, he shall order the group to refund to the member the excess collected. Any audit shall be at the expense of the group.

Sec. 16. (NEW) (a) Any moneys for a fund year in excess of the amount necessary to fund all obligations for that fund year may be declared to be refundable by the board of trustees not less than twelve months after the end of the fund year.

(b) Each member shall be given a written description of the refund plan at the time of application for membership. A refund for any fund year shall be paid only to those employers who remain participants in the group for the entire fund year. Payment of a refund based on a previous fund year shall not be contingent on continued membership in the group after that fund year.

Sec. 17. (NEW) (a) Each group shall establish to the satisfaction of the commissioner a premium payment plan which shall include: (1) An initial payment by each member of at least twenty-five per cent of that member's annual premium before the start of the group's fund year; and (2) Payment of the balance of each member's annual premium in monthly or quarterly instalments.

(b) Each group shall establish and maintain actuarially appropriate loss reserves which shall include reserves for: (1) Known claims and any associated expenses; and (2) Claims incurred but not reported and any associated expenses.

(c) Each group shall establish and maintain bad debt reserves based on the historical experience of the group or other groups or such other data as the commissioner may determine.

Sec. 18. (NEW) (a) If the assets of a group are at any time insufficient to enable the group to discharge its legal liabilities and other obligations and to maintain the reserves required of it under the provisions of this act, after consideration of present value of investment interest and income, it shall make up the deficiency or levy an assessment upon its members for the amount needed to make up the deficiency.

(b) In the event of a deficiency as determined in subsection (a) of this section, in any fund year, the deficiency shall be made up from: (1) Surplus from a fund year other than the current fund year; (2) administrative funds; (3) assessment of the membership, if ordered by the group; or (4) such alternate method as the commissioner may approve or direct. The commissioner shall be notified prior to any transfer of surplus funds from one fund year to another.

(c) If the group fails to assess its members or to otherwise make up such deficit within thirty days, the commissioner shall order it to do so.

(d) If the group fails to make the required assessment of its members within thirty days after the commissioner so orders, or if the deficiency is not fully made up within sixty days after the date on which the assessment is made, or within such longer period of time as may be specified by the commissioner, the group shall be deemed to be insolvent.

(e) The commissioner shall proceed against an insolvent group in the same manner as the commissioner would proceed against an insolvent domestic insurer in this state as prescribed in sections 38a-903 to 38a-961, inclusive, of the general statutes. The commissioner shall have the same powers and limitations in such proceedings as are provided under the provisions of said sections 38a-903 to 38a-961, inclusive, except as provided in this act.

(f) In the event of the liquidation of a group, the commissioner shall levy an assessment upon its members for such an amount as the commissioner determines to be necessary to discharge all liabilities of the group, including the reasonable cost of liquidation.

Sec. 19. (NEW) After notice and opportunity for a hearing, the commissioner may impose a monetary penalty on any person or group found to be in violation of any provision of this act or of any rules or regulations adopted pursuant to the provisions of this act. Such monetary penalty shall not exceed one thousand dollars for each act or violation and shall not exceed an aggregate of ten thousand dollars. The amount of any monetary penalty shall be paid to the commissioner for deposit in the General Fund.

Sec. 20. (NEW) (a) After notice and opportunity for a hearing, the commissioner may issue an order requiring a person or group to cease and desist from engaging in an act or practice found to be in violation of any provision of this act or of any rules or regulations adopted pursuant to this act.

(b) Upon a finding, after notice and opportunity for a hearing, that any person or group has violated any cease and desist order, the commissioner may do either or both of the following: (1) Impose a monetary penalty of not more than ten thousand dollars for each and every act or violation of the order not to exceed an aggregate monetary penalty of one hundred thousand dollars; or (2) Revoke the group's certificate of approval for the group or any insurance license held by the person.

Sec. 21. (NEW) (a) After notice and opportunity for a hearing, the commissioner may revoke a group's certificate of approval if it: (1) Is found to be insolvent; (2) Fails to pay any premium tax, regulatory fee or assessment or special fund contribution imposed upon it; or (3) Fails to comply with any of the provisions of this act, with any rules adopted pursuant to this act, or with any lawful order of the commissioner within the time prescribed.

(b) In addition, the commissioner may revoke a group's certificate of approval if, after notice and opportunity for hearing, the commissioner finds that: (1) Any certificate of approval that was issued to the group was obtained by fraud; (2) There was a material misrepresentation in the application for the certificate of approval; or (3) The group or its administrator has misappropriated, converted, illegally withheld or refused to pay over upon proper demand any moneys that belong to a member, an employee of a member, or a person otherwise entitled thereto and that have been entrusted to the group or its administrator in it fiduciary capacities.

Sec. 22. (NEW) The provisions of sections 38a-16, 38a-132, 38a-140 and 38a-815 to 38a-819, inclusive, of the general statutes, as amended, shall be additional to any other powers to enforce any penalties, fines or forfeitures authorized by law.

Sec. 23. (NEW) The commissioner shall adopt such reasonable regulations as he deems necessary to carry out the provisions of this act.

Sec. 24. (NEW) If any provision of this act, or the application thereof to any person or circumstance is subsequently held to be invalid, such invalidity shall not affect other provisions or applications of this act.

Sec. 25. Section 31-345 of the general statutes is repealed and the following is substituted in lieu thereof:

(a) No insurer or employer to whom a certificate of solvency pursuant to subsection (b) of section 31-284 has been issued, shall issue any policy of insurance purporting to cover the liability of an employer under the provisions of this chapter until a copy of the form of such policy has been filed with and approved by the Insurance Commissioner. No insurer or employer who is self-insured in whole or in part shall engage in writing insurance under this chapter or providing the compensation and benefits directly to employees unless he files with the Insurance Commissioner a receipt from the State Treasurer or the Comptroller on or before the first day of October, that the employer has paid his pro rata cost of administration required by this section or if the self-insured employer has not, prior to July first of any year, provided compensation and benefits under this chapter, the self-insured employer shall file such receipt on or before October first, annually that he has paid an amount equal to one-quarter of one per cent of the self-insured employer's payroll for the twelve months immediately preceding such July first.

(b) (1) When, after the close of a fiscal year ending prior to July 1, 1990, the chairman of the Workers' Compensation Commission and the Comptroller have determined the total amount of expenses of the Workers' Compensation Commission in accordance with the provisions of subsection (d) of section 31-280, the Treasurer shall thereupon assess upon and collect from each employer, other than the state and any municipality participating for purposes of its liability under this chapter as a member in an interlocal risk management agency pursuant to chapter 113a, the proportion of such expenses that the total compensation and payment for hospital, medical and nursing care made by such self-insured employer or private insurance carrier acting on behalf of any such employer bore to the total compensation and payments for hospital, medical and nursing care made by all such insurance carriers and self-insurers. The amount so secured shall be used to reimburse the Treasurer for appropriations theretofore made by the state for the payment in the first instance of the expenses of administering this chapter. On and after July 1, 1986, the Treasurer shall, as soon as possible after the close of a fiscal year ending prior to July 1, 1990, estimate the pro rata cost to each employer based upon the costs assessed to such employer in the immediately preceding fiscal year and shall assess upon and collect from each such employer such estimated costs annually which shall be payable as provided in subsection (a) of this section except each annual assessment shall include an amount which represents the difference between the payments collected and the actual costs assessed to such employer for the immediately preceding fiscal year. The Treasurer is authorized to make credits or rebates for overpayments made under this subsection by any employer for any fiscal year. (2) Effective July 1, 1990, the chairman of the Workers' Compensation Commission shall annually, on or after July first of each fiscal year, determine an amount sufficient in his judgment to meet the expenses of the Workers' Compensation Commission. Effective July 1, 1991, such expenses shall include the costs of the Rehabilitation Division and the programs established by its director and the costs of the Division of Worker Education and the programs established by its director. The Treasurer shall thereupon assess upon and collect from each employer, other than the state and any municipality participating for purposes of its liability under this chapter as a member in an interlocal risk management agency pursuant to chapter 113a, the proportion of such expenses, based on the immediately preceding fiscal year, that the total compensation and payment for hospital, medical and nursing care made by such self-insured employer or private insurance carrier acting on behalf of any such employer bore to the total compensation and payments for the immediately preceding fiscal year for hospital, medical and nursing care made by such insurance carriers and self-insurers, provided, effective July 1, 1991, such assessments for any fiscal year shall not exceed four per cent of such total compensation and payments made by such insurance carriers and self-insurers. Such assessments and expenses shall not exceed the budget estimates submitted in accordance with subsection (c) of section 31-280. FOR EACH FISCAL YEAR, SUCH ASSESSMENT SHALL BE REDUCED PRO RATA BY THE AMOUNT OF ANY SURPLUS FROM THE ASSESSMENTS OF PRIOR FISCAL YEARS. SAID SURPLUS SHALL BE DETERMINED IN ACCORDANCE WITH SUBDIVISION (3) OF THIS SUBSECTION. Effective July 1, 1991, such assessments shall be made in one annual assessment upon receipt of the chairman's expense determination by the Treasurer. All assessments shall be paid not later than sixty days following the date of the assessment by the Treasurer. Any employer who fails to pay such assessment to the Treasurer within the time prescribed by this subdivision shall pay interest to the Treasurer on the assessment at the rate of eight per cent per annum from the date the assessment is due until the date of payment. On and after July 1, 1991, all assessments received by the Treasurer pursuant to this subdivision shall be deposited in the Workers' Compensation Administration Fund established under section 31-344a. The Treasurer is hereby authorized to make credits or rebates for overpayments made under this subsection by any employer for any fiscal year. (3)AS SOON AS PRACTICABLE AFTER THE CLOSE OF THE STATE FISCAL YEAR, THE COMPTROLLER SHALL EXAMINE THE WORKERS' COMPENSATION ADMINISTRATION FUND AND SHALL DIRECT THE STATE TREASURER TO SET ASIDE WITHIN SAID FUND AMOUNTS IN EXCESS OF FIFTY PER CENT OF THE EXPENDITURES OF THE WORKERS' COMPENSATION COMMISSION FOR THE MOST RECENTLY COMPLETED FISCAL YEAR, WHICH SHALL BE CONSIDERED A SURPLUS FOR PURPOSES OF SUBDIVISION (2) OF SUBSECTION (b) OF THIS SECTION.

Sec. 26. Subsection (e) of section 31-288 of the general statutes, as amended by section 1 of public act 95-277, is repealed and the following is substituted in lieu thereof:

(e) [Any penalties collected pursuant to subsections (c) and (d) of this section shall be transferred monthly by the chairman of the Workers' Compensation Commission to the custodian of the Second Injury Fund.] THE CHAIRMAN OF THE WORKERS' COMPENSATION COMMISSION SHALL NOTIFY THE STATE TREASURER AND THE ATTORNEY GENERAL OF THE IMPOSITION OF ANY PENALTY, THE DATE IT WAS IMPOSED, THE AMOUNT, AND WHETHER THERE HAS BEEN AN APPEAL OF SAID PENALTY. ANY CIVIL PENALTY ORDER ISSUED PURSUANT TO SUBSECTION (c) OR (d) OF THIS SECTION SHALL STATE THAT PAYMENT SHALL BE MADE TO THE SECOND INJURY FUND OF THE STATE TREASURER, AND THAT FAILURE TO PAY WITHIN NINETY DAYS MAY RESULT IN CIVIL ACTION TO DOUBLE THE PENALTY. THE STATE TREASURER SHALL COLLECT ANY PENALTY OWED, AND IF THE PENALTY IS NOT PAID WITHIN NINETY DAYS, THE STATE TREASURER SHALL NOTIFY THE CHAIRMAN OF THE WORKERS' COMPENSATION COMMISSION AND THE ATTORNEY GENERAL SO THAT CIVIL ACTION MAY BE BROUGHT PURSUANT TO SECTION 31-289. Any appeal of a penalty assessed pursuant to the provisions of subsections (c) and (d) of this section shall be taken in accordance with the provisions of section 31-301 AS AMENDED. The chairman shall adopt regulations for the commissioners to use in setting fines which shall require the commissioners to take into account the nature of the employer's business and his number of employees.

Sec. 27. Section 31-289b of the general statutes is repealed and the following is substituted in lieu thereof:

Whenever an employer wilfully [and repeatedly] fails to comply with the requirements of this chapter, the Attorney General may bring a civil action in the superior court for the judicial district of Hartford-New Britain to enjoin the employer from conducting business in this state until the employer fully complies with the requirements of this chapter.

Sec. 28. (NEW) (a) The Legislative Program Review and Investigations Committee, in cooperation with the Labor and Public Employees Committee, shall study the effectiveness of health and safety committees established pursuant to section 31-40v of the general statutes. Said study shall evaluate the effect of the regulations of Connecticut state agencies governing health and safety committees to determine whether said regulations should be amended to be consistent with public act 93-228.

(b) The committee shall begin its study on January 1, 1999, and shall submit its report to the General Assembly by January 1, 2000. Study criteria shall include: Employer compliance with health and safety committee requirements; opinions of members of business and labor; and injury reduction due to the health and safety committee requirements.

Sec. 29. Section 31-316 of the general statutes is repealed and the following is substituted in lieu thereof:

(a) Each employer shall keep a record of the injuries sustained by his employees in the course of their employment that result in incapacity for one day or more. Each employer shall send to the chairman of the Workers' Compensation Commission, in duplicate, each week, or more often if so directed, a report of all injuries that the rules prescribed by the chairman determine, including the time of each injury, together with notices of claims for compensation that have been served upon the employer under section 31-294c, within one week of the receipt of the notices of claims. The employer shall inform the chairman as to the extent to which he provides accident and health insurance and life insurance coverage for his employees, and his payment or contribution requirements for any employee welfare plan, as defined in section 31-284b. No other report of injuries to employees shall be required by any department or office of the state from employers. The duplicates of the reports shall be immediately transmitted to the Labor Commissioner.

(b) UPON DETERMINING THAT THE EMPLOYER FAILED TO REPORT INJURIES AS REQUIRED BY SUBSECTION (a) OF THIS SECTION, THE WORKERS' COMPENSATION COMMISSIONER MAY INCREASE THE AWARD FOR COMPENSATION FOR THE EMPLOYEE'S INJURIES PROPORTIONATE TO THE PREJUDICE THAT THE EMPLOYEE SUSTAINED DUE TO THE EMPLOYER'S FAILURE TO FILE.

Approved June 12, 1996. Effective October 1, 1996.

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