§ 28-36-1 - Insurance or filing of bond required.

SECTION 28-36-1

   § 28-36-1  Insurance or filing of bondrequired. – (a) Every employer subject to or who has elected to become subject to chapters29 – 38 of this title as provided in § 28-29-8 shall secure in one ofthe following ways the compensation for which he or she is or may become liableunder those chapters:

   (1) By insuring and keeping insured against liability to paythe compensation in any stock or mutual company, or association, authorized andqualified to do business in this state and to take those risks in this state;

   (2) By furnishing to the director of labor and trainingsatisfactory proof of his or her financial ability to pay directly to injuredemployees or their dependents the compensation, and by furnishing security,indemnity, or a bond in kind and in amount satisfactory to the director. Thebond shall run to the director for the benefit of the employees and theirdependents and with the indemnity or security shall be deposited with him orher;

   (ii) Should the self-insured employer be unable to pay claimsthen the director shall call on the security, indemnity or bond in kind. Ifthese funds are deposited in a state account the account shall be an interestbearing account and all accrued interest shall only be for the benefit ofemployees and dependents of the self-insured employer.

   (3) By a combination of subdivisions (1) and (2) of thissubsection, the employer may self-insure for a sum certain by furnishingsecurity, indemnity or a bond in kind and amount equal to the sum certain,together with insurance for loss in excess of the sum certain.

   (ii) The provisions of subdivisions (2) and (3) of thissubsection shall apply upon compliance with the reasonable criteria and rulesand regulations as established by the director to qualify and safeguard theunderlying amounts of self-insurance; or

   (4) By becoming a member of an authorized groupself-insurance fund pursuant to chapter 47 of this title.

   (b) All employers who apply for approval to self insure forall or part of their liability, pursuant to subdivisions (a)(2) and (a)(3) ofthis section, shall pay an application fee based upon the number of employeeslocated at the employer's place(s) of business in Rhode Island. The fees fornew applications are set in accordance with the following schedule:

   SEE THE BOOK FOR THE PROPER TABLE.

   (2) There is established a restricted receipt account withinthe department of labor and training into which shall be deposited theapplication fees set forth in subdivision (1) of this subsection and therevenue derived from the assessment set forth in subdivision (3) of thissubsection. This account shall be used solely for the payment of the expensesof the department of labor and training in performing its duties under§§ 28-36-1 and 28-36-2. If an employer receives approval toself-insure from the director for all or part of its liability pursuant tosubdivision (a)(2) or (a)(3) of this section, the application fee paid by thatemployer shall be applied as a credit to reduce the amount of the assessmentapportioned to that employer pursuant to subdivision (3) of this subsection.

   (3) The director of labor and training and the department ofadministration, annually, as soon as practicable prior to the start of thefiscal year, in each succeeding year, shall ascertain the total amount ofexpenses, including in addition to the direct costs of personal services, (i)the cost of maintenance and operation, (ii) the cost of retirementcontributions made and workers' compensation premiums to be paid by the statefor or on account of personnel, (iii) rentals for space to be occupied in stateowned or state leased buildings, and (iv) all other direct or indirect costs tobe incurred by the department of labor in the next fiscal year in carrying outits responsibilities under §§ 28-36-1 and 28-36-2. Those expensesshall be assessed against all employers who self-insure for all or part oftheir liability under chapters 29 – 38 of this title. The basis ofapportionment of the assessment against each employer shall be that proportionof those expenses that the penal sum of the surety bond, indemnity, or securityof each employer at the close of the preceding fiscal year bears to the totalof the penal sum of all bonds, indemnity, or security for all employers.

   (4) In addition to current classified positions in thedepartment of labor and training self-insurance unit, consisting ofadministrator, hearing officer, supervising trainer, and senior clerkstenographer, there shall be funded as unclassified positions:

   (A) Two (2) administrative aide positions; and

   (B) Two (2) financial evaluator analysts.

   (ii) This staff's and/or any consultant's studies onfeasibility and/or audits, as assessed by the administrator according to therules of the department at the expense of any self-insured or proposedself-insured entity, shall be reported to the director of the department in thecourse of the department operations on the administration of the self-insuranceunit. All funds are from the restricted receipt account of the department ascollected by the self-insurance unit pursuant to subdivisions (1) – (3) ofthis subsection.