Mich. Admin. Code R. 408.43m - Servicing self-insured employers or groups; application; requirements; noncompliance
Rule 13m.
(1) An
individual, partnership, limited liability company, or corporation that desires
to engage in the business of providing 1 or more services for an individual
self-insurer or a self-insurers' group shall apply to the agency before
entering into a contract with the individual or group self-insurer and shall
satisfy the agency that it has adequate facilities and competent staff with
Michigan workers' compensation adjusting experience within the state to service
a self-insured program in a manner that fulfills the employers' obligations
under the act and the rules of the agency. Workers' compensation claims of
Michigan individual or group self-insured employers shall be handled within the
state of Michigan by its staff, except that the director, at his or her
discretion, may permit an approved service company to handle the claims of a
Michigan individual self-insurer outside of this state upon specific written
request by the individual self-insurer and the service company. The request for
permission must set forth documentation sufficient to the agency that claims
will be handled pursuant to Michigan law, administrative rules, and agency
policy. The director will respond to the request in writing, giving the reasons
for denial, or if approved, the conditions of approval. The approval may be
withdrawn by the director at any time based upon the failure of the service
company or employer, or both, to comply with the conditions of the approval.
Service may include claims adjusting, loss control services, underwriting, and
the capacity to provide required reporting. Any individual, partnership,
limited liability company, or corporation that provides claims adjusting or
loss control services to an approved self-insured employer, where the
self-insured employer has designated within its own organization an individual
to be responsible to the agency for its claims program or loss control
services, or both, shall not be considered a service company for purposes of
this rule.
(2) An applicant shall
apply to the agency for approval to act as a servicing company for self-insured
employers or group funds on a form prescribed by the agency. The application
must contain answers to all questions. An applicant shall give the answers
under oath. The agency shall approve the application prior to the service
company entering into a contract with an approved self- insurer. Approval to
act as a service company for self-insurers is granted for a period of 1 year
and is subject to renewal annually.
(3) If a service company seeks approval to
service claims for self-insurers, then it shall submit proof that it has,
within its organization at least 1 person who has the knowledge and Michigan
workers' compensation adjusting experience necessary to handle claims involving
the act. The service company shall attach a resume covering the principal
person's background to the application of the service company. The principal
individuals adjusting workers' compensation claims shall hold a current
workers' disability compensation adjuster's license under chapter 12 of the
insurance code of 1956, 1956 PA 218, MCL 500.1200 to 500.1247.
(4) If a service company seeks approval to
provide underwriting service to selfinsurers, then it shall submit proof that
it has, within its organization or under contract on a full-time basis, at
least 1 person who has the knowledge and experience necessary to provide
underwriting services for workers' compensation excess liability insurance
coverage. The service company shall attach a resume detailing the principal
person's background to the application of the service company.
(5) If a service company seeks approval to
furnish loss control services to selfinsurers, then it shall submit proof that
it has, within its organization or under contract on a full-time basis, at
least 1 person who has the knowledge and background necessary to adequately
provide loss control and health services.
(6) A service company shall maintain adequate
staff in the state. The service company shall authorize staff to act for the
service company on all matters covered by the act and the rules of the
agency.
(7) A service company shall
attach to the application a copy of its standard service agreement that it will
enter into with self-insured employers or group funds. The service company
shall certify, in writing, that the service agreement complies with the act and
these rules. The service company shall certify, and include a provision in its
standard service contract, which states that the contract provides for the
handling of all claims with dates of injury or disease within the contract
until conclusion of the claims, unless the service company is relieved by the
agency, in writing, of the responsibility for handling claims. If the service
contract calls for additional fees for any reason, then the service company
shall clearly define the additional fees in the contract. For a service company
to be relieved of the responsibility of handling claims to conclusion, the
client, the previous service company, and the new service company shall sign a
claims transfer agreement. The claims transfer agreement shall be completed on
a form prescribed by the agency and shall include a written request made by the
previous service company to be relieved of its claims handling responsibilities
to the agency. A requesting company is relieved of its claims handling
responsibility only after receiving a written response from the agency
approving a request. The service company shall certify that it will report to
the specific excess insurance carrier or aggregate excess insurance carrier, or
both, and put the specific excess insurance carrier or aggregate excess
insurance carrier, or both, on notice of all claims as required by the
self-insurers' or group self-insurers' insurance policies. The standard service
contract filed with the agency for approval and renewal of the service company
authority must include language specifically stating that the service company
is responsible for reporting to the excess insurance carrier. The agency may
waive the reporting requirement upon written request to the agency. Any dispute
involving late reporting of excess liability insurance claims and potential
penalties must be reported to the agency immediately.
(8) A service company shall certify, and
provide for in all service contracts, that all documents generated or prepared
by the service company for the group or the individual self-insurer or any
materials relating to an individual or group self-insurer held by a service
company are the property of the individual or group self-insurer and must be
surrendered to the individual or group self-insurer within 10 days of
termination of the service contract, subject to written request by the
individual or group self-insurer.
(9) Failure to comply with the provisions of
the act constitutes good cause for withdrawal of the approval to act as a
service company for self-insurers. The agency shall give 30 days' notice of
withdrawal. The agency shall give the notice by certified or registered mail,
served upon all interested parties.
Notes
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