Section 27-9-3-34.5 - Administration of large deductible worker's compensation policy(a) This section: (1) applies to a worker's compensation large deductible policy issued by an insurer that is subject to this chapter; and(2) does not apply to first party claims or claims funded by the guaranty association net of the deductible.(b) To the extent that the terms of a large deductible policy conflict with this section, the policy must be administered in accordance with this section.(c) Unless otherwise agreed by the guaranty association, all deductible claims that are covered claims (as defined in IC 27-6-8-4), including claims funded by an insured before liquidation, must be referred to the guaranty association for processing. To the extent an insured funds or pays a deductible claim under an agreement with the guaranty association or otherwise, the insured's funding or payment of the deductible claim extinguishes any obligation of the receiver or the guaranty association to pay the claim. A charge may not be made against the receiver or the guaranty association on the basis of an insured's funding or payment of a deductible claim.(d) The following apply when the guaranty association pays a deductible claim: (1) If the guaranty association pays a deductible claim for which the insurer would have been entitled to reimbursement from the insured, the guaranty association is entitled to the full amount of the reimbursement and available collateral to the extent necessary to reimburse the guaranty association. Reimbursements paid to the guaranty association under this subsection are not early access payments under section 32 of this chapter or distributions under section 40 of this chapter.(2) If the guaranty association pays:(A) a deductible claim that is not reimbursed:(ii) by payment by the insured; or(B) an incurred expense in connection with a large deductible policy that is not reimbursed; the guaranty association is entitled to assert a claim for the payments in the delinquency proceeding.
(e) Subsection (d) does not limit the receiver's or guaranty association's rights under other applicable law to obtain reimbursement from an insured for claim payments made by the guaranty association:(1) under the policies of the insurer; or(2) for the guaranty association's related expenses; including payments described in IC 27-6-8-11.5 or under another state's similar law.
(f) A receiver shall do the following: (1) Upon receipt by the receiver of notice from the guaranty association of reimbursable payments for which the guaranty association has not been reimbursed, bill an insured for reimbursement of deductible claims:(A) paid by the insurer before the commencement of delinquency proceedings;(B) paid by the guaranty association; or(C) paid or allowed by the receiver.(2) If an insured that is billed under subdivision (1) does not make payment within: (A) the time specified in the large deductible policy; or(B) if no time is specified in the large deductible policy, sixty (60) days after the date of billing; the receiver shall pursue all commercially reasonable actions to collect the payment.
(g) The following do not relieve an insured from the insured's reimbursement obligation under a large deductible policy and this chapter:(1) An insurer's insolvency.(2) An insurer's inability to perform the insurer's obligations.(3) An allegation of improper processing or payment of a deductible claim, except for gross negligence, by the: (C) guaranty association.(h) With respect to collateral, the following apply:(1) A receiver shall use available collateral to secure: (A) an insured's obligation to fund or reimburse deductible claims; and(B) other secured obligations or payment obligations. The guaranty association is entitled to collateral to the extent needed to reimburse the guaranty association for the guaranty association's payment of a deductible claim. A distribution to the guaranty association under this subdivision is not an early access payment under section 32 of this chapter or a distribution under section 40 of this chapter.
(2) A receiver shall pay all claims against collateral in the order received, and a claim of the receiver, including claims described in this subsection, does not supersede any other claim against the collateral as described in subdivision (4).(3) A receiver shall draw down collateral to the extent necessary if the insured fails to do any of the following: (A) Perform the insured's funding or payment obligations under the large deductible policy.(B) Pay a deductible claim reimbursement within the time specified in subsection (f)(2).(C) Pay amounts due to the insurer estate for pre-liquidation obligations.(D) Fund any other secured obligation within:(i) the time specified in the large deductible policy; or(ii) another reasonable period.(E) Pay expenses within the time specified in subsection (f)(2).(4) A receiver shall pay all claims that are validly asserted against the collateral in the order in which the claims are received by the receiver.(5) A receiver shall return to an insured any excess collateral, as determined by the receiver after a periodic review of claims paid, outstanding case reserves, and a factor for incurred but not reported claims.Added by P.L. 72-2016, SEC. 25, eff. 7/1/2016.