N.M. Code R. § 13.17.5.10 – Coverage of Leased Workers in the Voluntary Market

A. In the voluntary insurance market, a leasing contractor shall obtain or cause to be obtained workers’ compensation coverage for leased workers either through individual policies issued to each client or, with the voluntary market insurer’s knowledge and consent, through a standard workers’ compensation policy issued to the leasing contractor as co-employer of and covering all such leased workers. The leasing contractor’s voluntary market insurer may take all reasonable steps to ascertain exposure under any such policy and to collect the appropriate premium, including the following:
(1) requiring a complete description of the leasing company’s and its predecessors-in-interest’s clients and operations, past and present;
(2) conducting periodic audits and requiring periodic reports of payroll, classifications, ratings based upon experience and jurisdictions with exposure. In addition, the insurer may require the leasing contractor to submit its IRS Form 941 or its equivalent to the insurer on a quarterly basis;
(3) conducting audits of client operations; and
(4) taking or requiring the leasing contractor to take other reasonable measures appropriate to determining payroll, worker classifications, loss experience, ratings based upon experience and premium.
B. Every voluntary market insurer which provides workers’ compensation coverage to a leasing contractor as co-employer of leased workers shall maintain a written record of information in sufficient detail that each individual client’s payroll, classifications, losses and ratings based upon experience can be determined. Upon request made at any time before or after the expiration of the leasing contractors’ policy, the insurer shall furnish such detail to the client, any rating agency, a subsequent insurer or the assigned risk pool.
C. If a client changes from one leasing contractor to another or terminates its leasing arrangement, the leasing contractors’ voluntary market insurers or their rating organizations shall re-determine rating factors for the leasing contractors using the best data available, including but not limited to the client’s ratings based upon experience developed pursuant to 13 nmac 17.5.13 [now 13.17.5.13 NMAC]. This section shall not be construed to require re-determination of a leasing contractor’s rating based upon experience more often than annually; provided, that a re-determination may be made more often, upon a client change, in the insurers’ discretion.
[9/6/91, 7/1/97; Recompiled 11/30/01]