Section Lab 405.04 - Supplemental Guarantee of Payment(a) The self-insurer shall provide to the commissioner a supplemental guarantee of payment of the self-insurer retention. The supplemental guarantee of payment shall be in the form of a surety bond or securities or cash.(b) A surety bond shall use the wording of "Surety Bond", form WCSI-2 (8/1994) contained in Appendix II and shall name the State of New Hampshire Commissioner of Labor as beneficiary, and shall be in a penal sum not to exceed the 90-percent confidence level determined by the actuary of the self-insured and reported to the department on the "Actuarial Opinion Summary Sheet", form WCIS-7 (9/2015) contained in Appendix II.(c) The commissioner shall require a surety bond exceeding the amount of self-insurer retention upon application or annual review under any of the following circumstances: (1) Lack of financial history;(2) Fluctuating financial statements;(3) Litigation pending in other jurisdictions;(4) Any negative change in the financial picture of a self-insurer; or(5) The confidence levels determined in "Actuarial Opinion Summary Sheet" form WCSI-7.(d) Such surety bond shall remain in full force and effect unless terminated by the surety by written notice of its intention to do so filed in the office of the labor commissioner, and by giving written notice thereof to the principal. After proper notice, the surety's liability shall terminate at the expiration of 90 days from the date of such filing and not earlier. However, such termination shall not relieve the surety of its continual liability under this bond for obligations that occurred prior to the effective date of such termination.(e) If the self-insurer ceases to be an employer subject to the statute, or if it obtains coverage pursuant to RSA 281-A:5,I, then the liability of the self-insurer and of the surety shall cease, except as to such liability which has accrued during the life of the obligation. The surety shall be liable to the full extent of the penal sum in the event the self-insurer defaults.(f) Should the financial circumstances of the self-insurer change, the commissioner shall order an additional surety bond or supplemental guarantee or both or permit a reduction in the penal sum of an existing bond or the substitution of a new bond. Increases or reductions of the penal sum of a bond may be done by endorsement. Bonds shall remain in the possession of the department, even subsequent to their termination, except that the effective date of the termination shall be acknowledged in writing by the department to both the principal and the surety.(g) In lieu of the surety bond referred to in Lab 405.04(b) through (f), the self-insurer shall deposit and keep on deposit with a New Hampshire bank cash, securities, or both in trust for the benefit of a self-insurer's employees. Such guarantees shall be used, liquidated and disbursed exclusively upon the self-insurer's default and upon the commissioner's order, for the purpose of making direct payment of compensation benefits as provided by the statute and administrative rule of the department.(h) The self-insured and its fiduciary shall complete and file a "Securities Deposit Agreement" form WCSI-3 (1/1992), contained in appendix II, if the self-insured is using securities or cash as a supplemental guarantee.(i) The commissioner shall order additional guarantees if an annual actuary opinion indicates such change is prudent or permit a reduction or substitution if an annual actuary opinion indicates such change is prudent. Income from such deposit shall accrue to the self-insurer.(j) The agreement evidencing and governing a deposit of securities shall be executed by the self-insurer as principal, the bank's trust officer as fiduciary, and the commissioner as administrator of the statute, and shall remain in full force and effect until other guarantees provided by this section are substituted.(k) If the self-insurer ceases to be an employer subject to the statute or insures pursuant to RSA 281-A:5, I, the liability of the principal and the fiduciary shall cease except with respect to liability which has accrued during the life of the agreement. The bank and the fiduciary shall be liable to the full extent of the sum of cash or the market value of the securities on deposit.(l) No such deposit of securities may be withdrawn by anyone, without prior authorization of the commissioner. No guarantees deposited pursuant to this section shall be assignable, or subject to attachment, or liable in any way for the debt of the self-insurer unless such liability is incurred under RSA 281-A.(m) The self-insurer shall obtain a completed "Certificate of Insurance" form WCSI-4 (1/1992) contained in appendix II, executed by a carrier for excess insurance. The excess coverage shall include the New Hampshire amendatory endorsement as issued by the insurance department. The self-insurer shall obtain a completed copy of the "New Hampshire Amendatory Endorsement" form WCSI-5 (4/1996), contained in appendix II from the carrier to send to the department of labor to demonstrate proof of compliance. Such insurance shall guarantee within the stated coverage, beginning at attachment point, the payment of compensation benefits as provided by the statute.(n) The certificate shall remain in full force and effect until it has been replaced or other guarantees have been substituted, or until a written notice of termination has been on file with the department for a minimum period of 45 days. If the self-insurer ceases to be an employer subject to the statute or insures pursuant to RSA 281-A: 5, I, the liability of the carrier shall cease except as to such liability which has accrued during the life of the certificate.(o) If the self-insurer is a subsidiary to a parent entity the self-insurer shall file evidence of a parent company support, guaranteeing payment of compensation benefits under the statute up to a specific sum. This guarantee invests the commissioner with the power to order the manner and amount of payment upon default of the self-insurer. Termination of such agreement shall require a 60-day written notice to be filed with the department. "The Parent Company Agreement" form WCSI-6 (1/1992) contained in appendix II shall be used.N.H. Admin. Code § Lab 405.04
#9019, eff 11-1-07 (from Lab 405.03 )
Amended by, Volume XXXVI Number 14, Filed April 7, 2016, Proposed by #11066, Effective 4/1/2016, Expires 4/1/2026.