1. A. An employer shall secure compensation to his employees in one of the following ways:

   1. 1. By insuring and keeping insured the payment of such compensation with any stock corporation, mutual association, or other concerns authorized to transact the business of workers' compensation insurance in this state, or by exchanging contracts of indemnity or interinsurance, pursuant to reasonable rules prescribed by the Administrator providing for and securing the payment of the compensation provided for in the Workers' Compensation Act. When an insurer issues a policy to provide workers' compensation benefits pursuant to the provisions of the Workers' Compensation Act, the insurer shall file, or cause to be filed, with the Administrator a notice in such form and detail as the Administrator may prescribe by rule. The notice shall contain the name, address, and principal occupation of the employer, the number, effective date, and expiration date of the policy, and such other information as may be required by the Administrator. The notice shall be filed by the insurer within thirty (30) days after the effective date of the policy. Any insurer who fails to file the notice required by this subsection shall be liable for an administrative violation and subject to a fine by the Administrator of not more than One Thousand Dollars ($1,000.00);
   2. 2. By obtaining and keeping in force guaranty insurance with any company authorized to do guaranty business in this state. Each company that issues such guaranty insurance shall file a copy of the contract with the Administrator within thirty (30) days after the effective date of the contract. Any company that fails to file a copy of the contract as required by this subsection shall be liable for an administrative violation and subject to a fine by the Administrator of not more than One Thousand Dollars ($1,000.00);
   3. 3. By obtaining and keeping in force a workers' compensation equivalent insurance product approved by the Insurance Commissioner pursuant to Section 65 of this title; or

   4. 4. By furnishing satisfactory proof to the Administrator of the employer's financial ability to pay such compensation. The Administrator, pursuant to rules adopted by the Court or the Administrator for an individual self-insured or a group self-insurance association, shall require an employer that has:

      1. a. less than one hundred employees or less than One Million Dollars ($1,000,000.00) in net assets to:

         1. (1) deposit with the Administrator securities, an irrevocable letter of credit or a surety bond payable to the state, in an amount determined by the Administrator which shall be at least an average of the yearly claims for the last three (3) years; or
         2. (2) provide proof of excess coverage with such terms and conditions as is commensurate with their ability to pay the benefits required by the provisions of the Workers' Compensation Act.

      2. b. one hundred or more employees and One Million Dollars ($1,000,000.00) or more in net assets to:

         1. (1) secure a surety bond payable to the state, or an irrevocable letter of credit, in an amount determined by the Administrator which shall be at least an average of the yearly claims for the last three (3) years; or

         2. (2) provide proof of excess coverage with such terms and conditions as is commensurate with their ability to pay the benefits required by the provisions of the Workers' Compensation Act.

            The Administrator may waive the requirements of this paragraph in an amount which is commensurate with the ability of the individual self-insured or group self-insurance association to pay the benefits required by the provisions of the Workers' Compensation Act. Irrevocable letters of credit required by this paragraph shall contain such terms as may be prescribed by the Administrator and shall be issued for the benefit of the Workers' Compensation Court by a financial institution whose deposits are insured by the Federal Deposit Insurance Corporation.

2. B. An employer, upon application to become a member of a group self-insurance association, shall file with the Administrator of the Workers' Compensation Court a notice, in such form as prescribed by the Administrator of the Court, acknowledging that the employer, by entering into a group self-insurance association, accepts joint and several liability. Such notice shall be submitted to the Workers' Compensation Court with the application for membership.
3. C. An employer who fails to comply with the provisions of this section shall be subject to the penalty provided for in Section 12 of this title.
4. D. Any employer that knowingly provides false information to the Administrator for purposes of becoming self-insured or a group self-insurance association shall be subject to the perjury laws of this state.
5. E. The provisions of this title shall not be construed to limit or restrict the ability of political subdivisions of this state or employers subject to the provisions of the Workers' Compensation Act from joining together to form group self-insurance associations pursuant to law or rules promulgated by the Court or the Administrator.

Added by Laws 1915, HB 106, c. 246, art. 3, § 1; Amended by Laws 1919, SB 36, c. 14, p. 22, § 11; Amended by Laws 1968, SB 150, c. 143, § 1, emerg. eff. April 9, 1968; Amended by Laws 1977, HB 1228, c. 234, § 34, emerg. eff. July 1, 1978; Amended by Laws 1984, HB 1466, c. 258, § 1, eff. January 1, 1985; Amended by Laws 1986, SB 496, c. 222, § 19, eff. November 1, 1986; Amended by Laws 1990, SB 830, c. 283, § 15, eff. September 1, 1990; Amended by Laws 1992, SB 723, c. 335, § 33, emerg. eff. July 1, 1992; Amended by Laws 1993, HB 1447, c. 349, § 12, eff. September 1, 1993; Amended by Laws 1994, HB 2354, c. 22, § 2, eff. September 1, 1994; Amended by Laws 2006, HB 2905, c. 264, § 78, emerg. eff. July 1, 2006 (superseded document available).