A. Basic Rule.
Except as provided in Subsection B, a lessee, not authorized
to self-insure pursuant to 39 M.R.S.A. §23, shall fulfill its statutory
responsibility to secure benefits under the Workers' Compensation Act by
purchasing and maintaining a standard workers' compensation policy approved by
the Superintendent of Insurance. The exposure and experience of the lessee
shall be used in determining the premium for policy.
B. Exceptions
A lessor which obtains coverage in the voluntary workers'
compensation market and is registered with the Superintendent of Insurance,
pursuant to
32 M.R.S.A.
§14052, may, with the voluntary market
insurer's knowledge and consent, elect to secure the coverage on leased
employees through a standard workers' compensation policy issued to the lessor.
The insurer of the lessor may take all reasonable steps to ascertain exposure
under the policy and collect the appropriate premium through the following
procedures:
(1) Complete description
of lessor's operations;
(2)
Periodic reporting of covered lessee's payroll, classifications, experience
rating modification factors, and jurisdictions with exposure. This reporting
may be supplemented by a requirement to submit to the carrier Internal Revenue
Service Form 941 or equivalent form on a quarterly basis.
(3) Audit of lessor's operations;
and
(4) Any other reasonable
measures to determine the appropriate premium.
C. Residual Market Coverage.
A lessor which obtains coverage through the residual market
established pursuant to
24-A M.R.S.A. §2366 must secure coverage
on a multiple coordinated policies basis. This requirement applies to all
policies issued or renewed, any applications submitted, and any lessees
entering into an employee leasing agreement on or after the effective date of
this rule. In order to qualify for coverage on a multiple coordinated policies
basis, the lessor shall meet each of the following requirements at application
and at annual renewal:
(1) Its
officers or directors, or any person with a five percent (5%) or greater
interest does not owe any premium to the current or prior insurers, except
premium subject to dispute; and
(2)
Provide such information as is otherwise required by this rule; and
(3) Be registered as an employee leasing
arrangement with the Bureau of Insurance.
D. Application data required for residual
market.
A lessor which applies for coverage through the residual
market shall furnish the following information with the application for
coverage:
(1) A list by jurisdiction
of each and every name that the employee leasing company has operated under in
the preceding five (5) years (including any alternative names and names of
predecessors, and successor business entities) along with the policy number and
carrier for each workers' compensation insurance policy issued to the employee
leasing company under each and every such name in the preceding five (5) years
and a copy of the most recent Form 941 filed with the United States Internal
Revenue Service by the employee leasing company;
(2) A list of each and every person or entity
who owns a five percent (5%) or greater interest in the employee leasing
business at the time of application and a list of each and every person or
entity who formerly owned a five percent (5%) or greater interest in the
employee leasing company or its predecessors, successors, or alter egos in the
preceding five (5) years;
(3) For
each person or entity identified in the preceding subsection, a list of all
other employee leasing companies in which such person or entity owns or owned a
five percent (5) or greater interest and a list of all other businesses in
which such person or entity owns or owned a fifty percent (50%) or greater
interest at the time application is made and in the preceding twelve (12)
months;
(4) The Internal Revenue
Service Form 941 or equivalent most recently filed with the service with
respect to each lessee and a copy of the most recent Form 941 or equivalent
filed with the United States Internal Revenue Service by each lessee.
(5) A sworn written statement signed by the
owner, partner or officer authorized to bind the lessee legally, that states
the policy number and carrier for each workers' compensation insurance policy
issued to the lessee under each and every such name in the preceding five (5)
years;
(6) The employee leasing
company must also furnish for each lessee at the time of application or
renewal; a listing of all leased employees along with their social security
number, classification code and wages; and
(7) A sworn written statement signed by the
owner, partner or officer authorized to bind the lessee legally that states
that all of the lessee's non-leased employees are covered by a workers'
compensation insurance policy. In addition, the affidavit must provide the
policy number, carrier, a listing of the number of non-leased employees, and
the aggregate payroll applicable to each classification code.
A lessor which applies for coverage through more than one
residual market policy at one time needs only to furnish one copy of the
information required by paragraphs (1) and (3), above. A lessor which applies
for coverage through the residual market pursuant to policies to be coordinated
with other policies already in force and with respect to which the information
required by paragraphs (1) to (3), above, has been provided previously, shall
be required only to provide such information as is necessary to update the
previously provided information. With respect to unchanged information, a
lessor may make reference to its' previous submissions.
E. Other data required.
A lessor which applies for coverage or is covered through
either the voluntary market or the residual market mechanism shall also
maintain and furnish to the insurer or to the principal rating organization
through the residual market servicing carrier sufficient information to permit
the calculation of an experience modification factor for each lessee. Such
information shall include:
(1) The
lessee's corporate name or operating name if the lessee is not a
corporation;
(2) The lessee's
taxpayer or employer identification number;
(3) The lessee's risk identification
number;
(4) A listing of all leased
employees associated with each lessee, the applicable classification code and
payroll; and
(5) Claims information
grouped by lessee, and any other information necessary to permit the
calculation of an experience modification factor for each lessee.
