S.C. Code Regs. § § 69-54

Current through Register Vol. 48, No. 11, November 22, 2024

Section 69-54 - Experience Modification for Staff Leasing Services Companies in the Workers Compensation Assigned Risk Plan

I. Purpose.

The purpose of this regulation is to implement Section 40-68-120(D), Code of Laws of South Carolina (1976, as amended), for the rating of workers compensation insurance policies issued through the Assigned Risk Plan to staff leasing services companies which have or will establish contracts with client companies. Consistent with Section 40-68-120(D), the purpose of this regulation is to ensure that staff leasing services companies which have workers compensation insurance coverage through the Assigned Risk Plan pay the appropriate workers compensation premium for the leased employees.

II. Definitions.

The following definitions are consistent with those contained in Section 40-68-10:

A. "Staff Leasing Services Company" means an individual business entity that offers staff leasing services.

B. "Staff Leasing Services" means an arrangement by which employees of a licensee are assigned to work at a client company and in which employment responsibilities are shared by the licensee and the client company. The employee's assignment is intended to be of a long-term or continuing nature, rather than temporary or seasonal in nature, and a majority of the work force at a client company worksite or a specialized group within that work force consists of assigned employees of the licensee.

C. "Assigned Employee" means a person performing services for a client company as affected by a contract between a licensee and client company in which employment responsibilities are shared.

D. "Client Company" means a person that contracts with a licensee and is assigned employees by the licensee under that contract.

E. "Experience Modification Rate" means the rate that would have applied to the client company had such company applied directly for a policy through the Assigned Risk Plan. The experience modification rate includes any surcharges provided for in the Assigned Risk Adjustment Plan (ARAP) as well as all other rating factors and surcharges applicable to policies written in the Assigned Risk Plan.

F. "Assigned Risk Plan" means the voluntary agreement among insurers specified in Section 38-73-540, Code of Law of South Carolina (1976, as amended).

III. General Rules.

A. An insurer that provides workers compensation insurance coverage through the Assigned Risk Plan for staff leasing services companies must provide a separate policy for each client company and the experience modification rate of each individual client company must be separately calculated and maintained.

B. Coverage under a workers compensation insurance policy issued through the Assigned Risk Plan to a staff leasing services company cannot be extended to a client company which is not eligible for coverage through the Assigned Risk Plan.

C. An insurer that provides workers compensation insurance coverage through the Assigned Risk Plan to a staff leasing services company must rate each client company separately for a period of three years after it becomes a client company by applying the experience modification rate of that client company.

D. An insurer that provides workers compensation insurance coverage through the Assigned Risk Plan to a staff leasing services company must, after a client company has been a client company of that staff leasing services company for three years, separately rate the client company with the experience modification rate of the staff leasing services company.

E. If a client company insured under a workers compensation insurance policy issued through the Assigned Risk Plan transfers its employees to another staff leasing services company or obtains other workers compensation insurance coverage, the Assigned Risk Plan insurer must provide the client company's experience modification rate to the new staff leasing services company and to the client company's new workers compensation insurer.

IV. Effective Date.

This regulation shall become effective upon final publication in the State Register. However, workers compensation policies issued to staff leasing services companies which are in force as of the effective date of this regulation and which do not comply with its provisions, have one hundred twenty (120) days to comply.

S.C. Code Regs. § 69-54

Added by State Register Volume 19, Issue No. 5, eff May 26, 1995.

Statutory Authority: 1976 Code Sections 40-68-120(D), 38-3-110(2), 1-23-10 et seq.