260 R.I. Code R. 260-RICR-50-05-11.4

Current through December 3, 2024

Section 260-RICR-50-05-11.4 - Eligibility for Policy Issuance and Continuance

A. Basic Rules

1. A lessee shall fulfill its statutory responsibility to secure benefits for leased employees under the Workers' Compensation Insurance Act by purchasing and maintaining a standard workers' compensation policy approved by the Insurance Commissioner. The exposure and experience of the lessee shall be used in determining the premium for policy.

2. A labor contractor shall fulfill its statutory responsibility to obtain workers' compensation benefits for leased employees under the Workers' Compensation Insurance Plan by securing the coverage for the leased employees on a multiple coordinated policies basis, as set forth in § 11.4(C) of this Part.

3. In the event workers' compensation insurance coverage is provided through multiple lessors or by means involving entities other than a single lessor, then the complete legal arrangement shall be in writing explained and provided to the Department (including copies of all pertinent documents).

B. Residual Market Coverage

1. A labor contractor which obtains coverage through the residual market, for leased employees, must secure coverage on a multiple coordinated policies basis, as set forth in § 11.4(C) of this Part, to qualify for coverage on a multiple coordinated policies basis, the labor contractor shall meet each of the following requirements at application and annual renewal:

a. A lessor, its officers or directors, or any person with a five percent (5%) or greater interest does not owe any premium to the current or prior insurers, except premium subject to dispute; and

b. Provide such information as is otherwise required by this Regulation; and

c. Be registered as an employee leasing arrangement with the Department of Labor and Training.

C. Multiple coordinated policies

1. Multiple coordinated policies shall include the following requirements:

a. All assigned risk workers' compensation insurance policies for lessees of the same employee leasing company shall be assigned to Beacon Mutual Insurance Company for employees in state and to one servicing carrier in other states to the extent possible; and

b. The insurer shall arrange to have the same renewal dates for all such workers' compensation insurance policies; and

c. The insurer shall arrange to have all notices sent to the employee leasing company (labor contractor) and to have a single master invoice sent to the employee leasing company (labor contractor) for all policies covering the clients of the employee leasing company (labor contractor).

d. If a client leases employees from more than one labor contractor, there shall be a separate policy for the leased employees of each labor contractor.

e. The insurer shall issue a workers' compensation insurance policy covering the internal employees of the employee leasing company.

f. Appropriate endorsements need to be used to restrict the coverage to specific employees and to coordinate coverage between lessees and lessor.

2. The labor contractor (lessor) shall meet each of the following requirements to qualify for securing coverage on a multiple coordinated policies basis.

a. The labor contractor is acting in good faith and entitled to insurance required under the workers' compensation insurance laws;

b. The labor contractor, its officers, directors, and any person with a five percent or greater interest does not owe any undisputed workers' compensation premium to the current or prior insurers and or self-insurer;

c. The labor contractor provides all information required under each policy in accordance with this regulation; and

d. The labor contractor is in compliance with all state laws.

3. The client (lessee) shall meet each of the following requirements to qualify for securing coverage on a multiple coordinated policies basis:

a. The client is acting in good faith and entitled to insurance required under the workers' compensation insurance laws;

b. The client, its officers, directors, and any person with a five percent or greater interest does not owe any undisputed workers' compensation premium to the current or prior insurers and or self-insurers;

c. The client provides all information required under each policy in accordance with this Regulation; and,

d. The client is in compliance with all state laws.

D. Application Data Required for Residual Market

1. A lessor which applies for coverage through the residual market shall furnish the following information with the application for coverage:

a. A list of jurisdiction of each and every name that the employee leasing company has operated under in the preceding five (5) years (including any alternative names and names of predecessors, and successor business entities) along with the policy number and carrier for each workers' compensation insurance policy issued to the employee leasing company under each and every such name in the preceding five (5) years and a copy of the most recent Form 941 or its equivalent filed with the United States Internal Revenue Service by the employee leasing company;

2. A list of each and every person or entity who owns a five percent (5%) or greater interest in the employee leasing company at the time of application and a list of each and every person or entity who formerly owned a five percent (5%) or greater interest in the employee leasing company or its predecessors, successors, or alter egos in the preceding five (5) years;

3. For each person or entity identified in the preceding subsection, a list of all other employee leasing companies in which each such person or entity owns or owned a five percent (5%) or greater interest and a list of all other businesses in which each such person or entity or combination of two or more such persons or entities owns or owned a fifty percent (50%) or greater interest at the time application is made and in the preceding twelve (12) months;

4. A list by jurisdiction for each lessee, along with any other name(s) such lessee has operated under in the preceding five (5) years and the Internal Revenue Service Form 941 or its equivalent most recently filed with the service with respect to each lessee and a copy of the most recent Form 941 or its equivalent filed with the United States Internal Revenue Service by each lessee;

5. A sworn written statement signed by the owner, partner or officer authorized to bind the lessee legally, that states the policy number and carrier for each workers' compensation insurance policy issued to the lessee under each and every name in the preceding five (5) years;

6. The employee leasing company must also furnish for each lessee at the time of application or renewal; a listing of all leased employees along with their social security numbers, classification codes and wages; and

7. A sworn written statement signed by the owner, partner or officer authorized to bind the lessee legally that states that all of the lessee's non-leased employees are covered by a workers' compensation insurance policy. In addition, the sworn written statement must provide the policy number, carrier, a listing of the number of non-leased employees, and the aggregate payroll applicable to each classification code.

260 R.I. Code R. 260-RICR-50-05-11.4