N.M. Admin. Code § 11.4.8.9

Current through Register Vol. 35, No. 21, November 5, 2024

Section 11.4.8.9 - SELF-INSURERS' GUARANTEE FUND

A. Commission membership is composed of all self-insurers as defined in Section 52-8-3(J) NMSA 1978, as a condition of their authority to individually self-insure in the state of New Mexico.

B. Withdrawal of membership:

(1) A member shall be automatically withdrawn from the commission upon the termination of its self-insurance certificate and payment of all assessments due to the date of such termination.

(2) Notwithstanding the termination of membership of a self-insured for whatever reason, that self-insured shall remain liable to the commission for any assessments imposed and based upon insolvencies occurring while the terminated self-insured was a member of the commission.

C. Board of directors:

(1) A board of directors shall be appointed pursuant to Section 52-8-5 NMSA 1978. Every member of the board of directors shall currently be a representative of a commission member in good standing. The board may adopt by-laws governing the functioning of the commission including the filling of vacancies on the board, removal of board members and conflicts of interest. The board of directors shall elect a chairperson, who shall also be president of the corporation, and a vice-chairman, who shall also be vice president of the corporation. The director shall be the secretary/treasurer of the corporation.

(2) The commission shall maintain such financial records as are necessary to properly reflect assessments, receipts and disbursements (including paid claims) of all funds of the commission. Such records shall also reflect the financial condition of the commission at all times. The commission shall make available its financial records to the administration when so requested.

(3) The commission shall make all necessary records available to an independent auditor to facilitate audits of the commission.

(4) All board members, and such other personnel as may be employed by the board, shall be bonded in an amount determined by the board to be adequate to protect the interests of the commission.

(5) The board may open one or more insured accounts in any number of state or federally chartered financial institutions located in the state of New Mexico, in order to conduct commission business. Reasonable delegation of deposit and withdrawal authority in such accounts may be made, consistent with prudent fiscal policy, but, except as is expressly provided herein, the withdrawal of commission funds shall require the signatures of any two members of the board.

D. Powers and duties of the commission:

(1) The commission, through its board of directors, shall have the power to:

(a) sue and be sued and appear and defend in all actions and proceedings in its corporate name to the same extent as a natural person;

(b) adopt and use a common corporate seal and alter the same; provided, however, that such seal shall always contain the words "not for profit corporation";

(c) elect or appoint such officers and agents as its officers shall require and allow them reasonable compensation;

(d) make contracts and incur liabilities, borrow money at such rates of interest as the corporation may determine, issue its notes, bonds, other obligations and secure any of its obligations by mortgage and pledge of any or all of its property, franchises or income;

(e) purchase, take, receive, lease, take by gift, devise or bequest, or otherwise acquire, own, hold, improve, use or otherwise deal in and with real and personal property, or any interest therein, wherever situated;

(f) have and exercise all powers necessary or convenient to effect any or all of the purposes for which the corporation is organized;

(g) purchase reinsurance or excess insurance as is determined by the board of directors to be necessary to effectuate the purposes and intent of Section 52-8-6(A) NMSA 1978;

(h) review all applicants for membership in the commission and make recommendations to the director concerning the appropriateness of inclusion in, or termination from, membership in the commission with respect to any applicant or member;

(i) provide for imposition of assessments upon members to insure the financial stability of the fund as provided in Section 52-8-6(A) NMSA 1978; and

(j) request, upon a majority vote of the board, that the administration determine the condition of any member of the commission which the board in good faith believes may no longer be qualified to be a member of the commission; within 30 days of receipt of such request or for good cause shown, the administration shall make such determination and shall advise the board of its findings; each request for a determination shall be kept on file by the administration and it shall not be open to public inspection pursuant to Section 52-5-21 NMSA 1978.

(2) The commission through its board of directors shall have the following duties:

(a) The commission shall incorporate as a not-for-profit corporation under the laws of New Mexico and shall maintain its corporate status in good standing.

(b) The commission shall be deemed to stand in the place of an insolvent employer to the extent of its obligations on covered claims and, to such extent, shall have all rights, duties and obligations of the insolvent employer as if the employer had not become insolvent.

(c) As to any insolvency proceeding, the commission shall periodically file with the receiver or liquidator of the insolvent member statements of the covered claims paid by the commission and estimates of anticipated claims on the commission. Such filing shall preserve the rights of the commission against the assets of the insolvent member.

(d) To maintain an insolvency fund to meet the obligations of insolvent members, pursuant to Section 52-8-7 NMSA 1978.

(e) At the conclusion of any member insolvency in which the commission was obligated to pay covered claims, prepare a report on the history and cause of such insolvency, based on information available to the commission and submit such report to the administration.

(f) Not later than May 31st each year, submit a financial report for the preceding calendar year in a form approved by the director.

E. Procedure for handling claims:

(1) The commission shall accept for processing all claims against insolvent members which are made by the injured party or their representative.

(2) The commission shall be obligated to pay benefits to injured workers to the same extent as the insolvent member and shall be added as a party in any complaint for benefits or complaints for reduction or termination of benefits filed with respect to the insolvent employer.

(3) The commission may employ persons to process covered claims, giving them reasonable authority to process claims. Any processing of claims in excess of that authority shall be subject to prior approval by the board, or a claims committee established by the board for that purpose.

(4) The commission shall use every reasonable means to expedite the handling of covered claims submitted by the injured worker or representative, and may adopt a protocol for the handling of those claims.

F. Assessments: Determination and payment of assessment:

(1) Each member shall be given not less than 30 days' notice of the date that an assessment is due and payable.

(2) The assessment notice shall advise the member to remit the assessment payable to the commission. Upon receipt of the assessments, the commission shall deposit said funds in the commission's accounts and shall use them for the purposes stated in the Self-Insurers' Guarantee Fund Act.

(3) The commission shall immediately notify the director if a member fails to pay an assessment when due. The director may penalize the member or revoke its authority to self-insure pursuant to Section 52-1-61 NMSA 1978, and these rules.

(4) The board shall enforce its right to collect any assessment remaining unpaid 60 days after it shall have become due by appropriate action at law or in equity against the non-paying member.

(5) For purposes of calculating assessments, the self-insured may deduct any subrogation recovery in such amounts as are recovered in the same assessment year as they are paid.

(6) If two or more self-insureds combine certificates, the fund balance for the combined entity shall be combined.

(7) Assessments paid by a parent on behalf of a subsidiary which has its own certificate shall be allocated to the subsidiary.

N.M. Admin. Code § 11.4.8.9

8/1/96, 10/1/98; 11.4.8.9 NMAC - Rn, 11 NMAC 4.8.9, 1/14/05, Adopted by New Mexico Register, Volume XXVI, Issue 18, September 29, 2015, eff. 10/1/2015, Amended by New Mexico Register, Volume XXVII, Issue 18, September 30, 2016, eff. 9/30/2016