Mont. Admin. R. 24.29.616 - EXCESS INSURANCE-WHEN REQUIRED
(1)
Specific excess insurance is required of an employer or an employer group
electing coverage under plan no. 1.
(2) Aggregate excess insurance is required by
the department , with the concurrence of the guaranty fund, for an employer or
an employer group unless substantive evidence is provided that it is not
warranted. This evidence must include diversification of risk, industry type,
financial resources, self-insured retention levels, policy limits of the
specific excess policy, safety program, loss experience and other appropriate
factors as determined relevant by the department , with the concurrence of the
guaranty fund.
(3) The contract or
policy of specific excess insurance and aggregate excess insurance must comply
with the following:
(a) It is issued by a
carrier admitted and licensed in Montana with a Best's Rating of A- or better
and a financial size rating of VI or greater. Excess coverage issued by a
carrier not rated by Best's will be considered for approval at the discretion
of the department , with the concurrence of the guaranty fund.
(b) A self-insurer that anticipates that it
may have material changes to the provisions or coverage of its excess insurance
policy must notify the department of that possibility at least 30 days before
the effective date of the changes.
(i) If
there is a change in the provisions or coverage, the department has the
authority to evaluate the changes related to the terms of the authorization to
self-insure, and the department may, with the concurrence of the guaranty fund,
make adjustments in the terms of that authorization accordingly.
(ii) In the event of a temporary extension of
authority, the department may condition the renewal of self-insurance authority
upon a suitable change in the amount of security required from the
self-insurer.
(c) It
may be canceled or its renewal denied only upon written notice by registered or
certified mail to the other party to the policy and to the department and the
guaranty fund, not less than 60 days before termination by the party desiring
to cancel or not renew the policy. A carrier is liable for payment of all
claims that occur from the date of inception of the policy to the cancellation
date of the policy.
(d) Any
contract or policy containing a commutation clause must provide that any
commutation effected thereunder will not relieve the underwriter or
underwriters of further liability in respect to claims and expenses unknown at
the time of such commutation or in regard to any claim apparently closed at the
time of initial commutation which is subsequently reopened by the department or
a court. If the underwriter proposes to settle the liability as provided in the
commutation clause of the policy for future compensation benefits payable for
accidents or occupational diseases occurring during the term of the policy by
the payment of a lump sum to the self-insurer, then not less than 60 days prior
notice to such commutation must be given by the underwriter(s) or agent(s) by
registered or certified mail to the department and the guaranty fund. If any
commutation is effected, the department with the concurrence of the guaranty
fund, shall have the right to direct such sum be placed in trust for payment of
benefits of the injured employee(s) entitled to such future payments.
(e) If a self-insurer becomes
insolvent and, or, fails to make benefit payments, the excess carrier, after it
has been determined the retention level has been reached on the excess
insurance policy, shall make payments to the entity making payments on behalf
of the insolvent self-insured in the same manner as payments would have been
made by the excess carrier to the self-insured.
(f) It must include an endorsement regarding
late claim reporting penalty waiver.
(g) All of the following will be applied
toward the retention level in the excess insurance contract:
(i) payments made by the self-insurer;
(ii) payments made on behalf of
the self-insurer from the proceeds of any security deposit as ordered by the
department ; and
(iii) payments
made on behalf of the insolvent self- insurer by the guaranty fund .
(h) Copies of the certificates and
policies of the excess insurance must be filed with the department for a
determination that such certificates and policies fully comply with the
provisions of the Workers' Compensation Act, the Occupational Disease Act, and
ARM Title 24, chapter 29, subchapter 6.
Notes
AUTH: 39-71-203, MCA IMP: 39-71-403, 39-71-2101, 39-71-2103, MCA
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