§ 58-89A-110. Workers' compensation insurance.
§ 58‑89A‑110. Workers' compensation insurance.
(a) A licensee or thelicensee's client company shall provide workers' compensation insurancecoverage through a licensed insurance carrier or a licensed self‑insuranceplan for the licensee's assigned employees as provided in Chapter 97 of theGeneral Statutes, the Workers' Compensation Act. To the extent that thelicensee secures and maintains workers' compensation coverage for assignedemployees, the carrier may elect to provide such coverage to the licenseepursuant to either the multiple coordinated policy method, as set forth insubsection (b) of this section, or the single policy method, as set forth insubsection (c) of this section.
(b) If the licenseeprovides workers' compensation coverage pursuant to the multiple coordinatedpolicy method, the licensee shall secure a separate policy for each clientcompany of the licensee. Each policy shall identify the name of the clientcompany and the licensee. The licensee shall be named as the insured and identifythe client company. The licensee shall specify that it is the labor contractorfor the client company by using the designation "L/C/F" on thepolicy.
Each policy shall expire onthe same date. The policy shall not include coverage for nonleased employees ofthe client company or employees solely employed by the licensee. Only thelicensee, as the first‑named insured under such a policy, may request theinsurer to cancel the policy. Each policy shall be sent to the licensee as thenamed insured.
The client company of alicensee shall have a continuing obligation to provide coverage as required byChapter 97 of the General Statutes, the Workers' Compensation Act, for anyemployees of the client company who are not assigned employees and nototherwise covered under a policy described in this subsection.
If a client company of alicensee leases employees from more than one licensee, there shall be aseparate policy for the assigned employees of each licensee.
The workers' compensationcarrier also shall issue a policy covering the internal employees of thelicensee unless they are otherwise covered.
All policies written inaccordance with this subsection by the same insurance carrier that referencethe same licensee as labor contractor shall be combined for premium discountpurposes.
When policies written inaccordance with this subsection are written by the same insurance carrier, thecarrier and licensee may agree to a retrospective rating program or any otherpermitted pricing program.
Whenever a policy written inaccordance with this subsection is cancelled, the insurance company writing thepolicy shall provide individual notices of cancellation as required by thisChapter to the licensee and the client company of the licensee.
(c) If the licenseeprovides workers' compensation coverage pursuant to the single policy method,the insurer shall issue to the licensee a single policy covering all assignedemployees in this State in accordance with Chapter 97 of the General Statutes,the Workers' Compensation Act, and any other applicable laws or rating plans ofthis State.
As a condition of issuing asingle policy, the licensee shall provide to the insurer of the policy all ofthe following information regarding each client company of the licensee withassigned employees in this State:
(1) The correct legalname, any fictitious names, and the federal identification number.
(2) The name and addressof the president and chief executive officer.
(3) The business mailingaddress.
(4) The businesstelephone number and facsimile number.
The licensee shall alsoprovide to the insurer the name and address of the insurance agent or brokerresponsible for securing the policy of insurance on behalf of the licensee.
The insurer shall issue toeach client company of the licensee a certificate of insurance on the singlepolicy. The certificate of insurance shall require that the insurer providenotice of cancellation to the licensee and the client company of the licensee.
Whenever a policy written inaccordance with this subsection is cancelled, the insurance company writing thepolicy shall provide individual notices of cancellation as required by thisChapter to the licensee and the client company of the licensee.
If the insurer fails toprovide individual notices of cancellation to the licensee and the clientcompany, the insurer shall remain liable on the risk for losses incurred by theclient company that would have been covered by the workers' compensation policyprior to the attempted cancellation.
(d) A license shall notbe issued to any professional employer organization unless (i) the organizationfirst files with the Commissioner evidence of workers' compensation coveragefor all assigned employees in this State, including those leased from orcoemployed with another person, and (ii) the organization certifies to theCommissioner that it has provided its workers' compensation carrier with properand necessary documentation to allow the carrier to determine and charge apremium that is commensurate with exposure and anticipated claim experience forall employees covered under policies issued by the carrier in the name of thelicensee.
(e) Each licensee shallmaintain and make available to its workers' compensation carrier on an annualbasis the following information:
(1) The correct name andfederal identification number of each client company.
(2) A listing of allcovered employees provided to each client company, by classification code.
(3) The total eligiblewages, by classification code, and the premiums due to the carrier for theemployees provided to each client company.
(4) Sufficientinformation to permit the calculation of an experience modification factor foreach client company upon termination of the professional employer relationship.Information accruing during the term of the leasing arrangement that is used tocalculate an experience modification factor for a client company upontermination of the leasing relationship shall continue to be used in the futureexperience ratings of the licensee.
(f) Every Form 19"Employer's Report of Employee's Injury or Occupational Disease to theIndustrial Commission" filed with the Industrial Commission shall identifyby name and address both the licensee and the client company employing theemployee who is the subject of the Form 19.
(g) A licensee shall,within 30 days of initiation or termination of the licensee's relationship withany client company, notify its workers' compensation carrier, the Commissioner,and the North Carolina Industrial Commission of both the initiation andtermination of the relationship. If the client company terminates therelationship between the licensee and the client company, the notice requiredby this subsection shall be given within 10 days of the licensee's actualknowledge of the termination.
(h) If the professionalemployer services arrangement with a client company is terminated, the clientcompany shall be assigned an experience modification factor that reflects itsexperience during the experience period specified by the approved experiencerating plan, including, if applicable, experience incurred for assignedemployees under the PEO agreement.
(i) A client companyshall not enter into a PEO agreement or be eligible for workers' compensationcoverage in the voluntary market if the client‑workers' company owes itscurrent or prior carrier any premium for workers' compensation insurance, or ifthe client company owes its current or prior professional employer organizationamounts due under the PEO agreement, except for premiums or amounts due thatare subject to dispute. For the purposes of this section and compliance withother laws and rules, a licensee may rely on a statement by the client companythat the client company has met any and all prior premium or fee obligations,unless the licensee has actual knowledge to the contrary.
(j) This section shallnot prevent a client company of a licensee from providing workers' compensationinsurance coverage for assigned employees coemployed by the client company andthe licensee through a policy of insurance issued by a licensed insurancecarrier in the name of the client company as the insured.
(k) Irrespective ofwhether the licensee or client company maintains the policy of workers'compensation insurance for the covered employees pursuant to the PEO agreement,the licensee and the client company shall be entitled to the exclusivity of theremedy under both the workers' compensation and the employer liabilityprovision of the workers' compensation policy or plan that either party hassecured and shall both be afforded the protections provided under Chapter 97 ofthe General Statutes. The licensee shall be entitled, along with the clientcompany, to the exclusivity of the remedy under both the workers' compensationand employers' liability provision of the workers' compensation policy or planthat either party has secured.
(l) All assigned riskpolicies for client companies of the same licensee shall be assigned to oneworkers' compensation carrier in the State and in other states to the extentpossible. (2004‑162,s. 1; 2005‑124, s. 4.)