I. Purpose.
The purpose of this regulation is to implement Section
40-68-120(D),
Code of Laws of South Carolina (1976, as amended), for the rating of workers
compensation insurance policies issued through the Assigned Risk Plan to staff
leasing services companies which have or will establish contracts with client
companies. Consistent with Section
40-68-120(D),
the purpose of this regulation is to ensure that staff leasing services
companies which have workers compensation insurance coverage through the
Assigned Risk Plan pay the appropriate workers compensation premium for the
leased employees.
II.
Definitions.
The following definitions are consistent with those contained in
Section
40-68-10:
A. "Staff Leasing Services Company" means an
individual business entity that offers staff leasing services.
B. "Staff Leasing Services" means an
arrangement by which employees of a licensee are assigned to work at a client
company and in which employment responsibilities are shared by the licensee and
the client company. The employee's assignment is intended to be of a long-term
or continuing nature, rather than temporary or seasonal in nature, and a
majority of the work force at a client company worksite or a specialized group
within that work force consists of assigned employees of the
licensee.
C. "Assigned Employee"
means a person performing services for a client company as affected by a
contract between a licensee and client company in which employment
responsibilities are shared.
D.
"Client Company" means a person that contracts with a licensee and is assigned
employees by the licensee under that contract.
E. "Experience Modification Rate" means the
rate that would have applied to the client company had such company applied
directly for a policy through the Assigned Risk Plan. The experience
modification rate includes any surcharges provided for in the Assigned Risk
Adjustment Plan (ARAP) as well as all other rating factors and surcharges
applicable to policies written in the Assigned Risk Plan.
F. "Assigned Risk Plan" means the voluntary
agreement among insurers specified in Section
38-73-540, Code of
Law of South Carolina (1976, as amended).
III. General Rules.
A. An insurer that provides workers
compensation insurance coverage through the Assigned Risk Plan for staff
leasing services companies must provide a separate policy for each client
company and the experience modification rate of each individual client company
must be separately calculated and maintained.
B. Coverage under a workers compensation
insurance policy issued through the Assigned Risk Plan to a staff leasing
services company cannot be extended to a client company which is not eligible
for coverage through the Assigned Risk Plan.
C. An insurer that provides workers
compensation insurance coverage through the Assigned Risk Plan to a staff
leasing services company must rate each client company separately for a period
of three years after it becomes a client company by applying the experience
modification rate of that client company.
D. An insurer that provides workers
compensation insurance coverage through the Assigned Risk Plan to a staff
leasing services company must, after a client company has been a client company
of that staff leasing services company for three years, separately rate the
client company with the experience modification rate of the staff leasing
services company.
E. If a client
company insured under a workers compensation insurance policy issued through
the Assigned Risk Plan transfers its employees to another staff leasing
services company or obtains other workers compensation insurance coverage, the
Assigned Risk Plan insurer must provide the client company's experience
modification rate to the new staff leasing services company and to the client
company's new workers compensation insurer.
IV. Effective Date.
This regulation shall become effective upon final publication in
the State Register. However, workers compensation policies issued to staff
leasing services companies which are in force as of the effective date of this
regulation and which do not comply with its provisions, have one hundred twenty
(120) days to comply.
