31A-33-106 - Board of directors -- Status of the fund in relationship to the state.
31A-33-106. Board of directors -- Status of the fund in relationship to the state.
(1) There is created a board of directors of the Workers' Compensation Fund.
(2) The board shall consist of seven directors.
(3) Subject to Subsection (8), one director:
(a) (i) shall be the executive director of the Department of Administrative Services or theexecutive director's designee; and
(ii) acts as the representative of the state as a policyholder of the Workers' CompensationFund; or
(b) is a public director appointed in accordance with Subsection (8)(b).
(4) One director shall be the chief executive officer of the fund.
(5) (a) In accordance with a plan that meets the requirements of this section, thegovernor, with the consent of the Senate, shall appoint five public directors as follows:
(i) three directors who are owners, officers, or employees of policyholders other than thestate, each of whom is an owner, officer, or employee of a policyholder that has been insured bythe Workers' Compensation Fund for at least one year before the appointment of the directorrepresenting the policyholder; and
(ii) two directors from the public in general.
(b) The plan described in Subsection (5)(a) shall comply with Section 31A-5-409 to theextent that Section 31A-5-409 does not conflict with this section.
(6) No two directors may represent or be employed by the same policyholder.
(7) At least four directors appointed by the governor shall have had previous experiencein:
(a) the actuarial profession;
(b) accounting;
(c) investments;
(d) risk management;
(e) occupational safety;
(f) casualty insurance; or
(g) the legal profession.
(8) (a) Any director who represents a policyholder that fails to maintain workers'compensation insurance through the Workers' Compensation Fund shall immediately resign fromthe board, including the executive director of the Department of Administrative Services or theexecutive director's designee if the state is no longer insured by the Workers' Compensation Fundpursuant to Section 34A-2-203.
(b) (i) If the state is no longer insured by the Workers' Compensation Fund pursuant toSection 34A-2-203, the governor with the consent of the Senate, shall appoint a public director toreplace the executive director of the Department of Administrative Services or the executivedirector's designee.
(ii) The public director appointed under this Subsection (8)(b) shall:
(A) be an owner, officer, or employee of a policyholder that has been insured by theWorkers' Compensation Fund for at least one year before the appointment of the directorrepresenting the policyholder;
(B) have previous experience described in Subsection (7); or
(C) be the director of the Governor's Office of Economic Development.
(c) Once the executive director of the Department of Administrative Services or the
executive director's designee is not a member of the board under Subsection (3), the state shallhave a member on the board to represent the state as a policyholder only if the member isappointed in accordance with Subsection (5) or (8)(b).
(9) A person may not be a director if that person:
(a) has any interest as a stockholder, employee, attorney, or contractor of a competinginsurance carrier providing workers' compensation insurance in Utah;
(b) fails to meet or comply with the conflict of interest policies established by the board;or
(c) is not bondable.
(10) After notice and a hearing, the governor may remove any director for cause whichincludes:
(a) neglect of duty; or
(b) malfeasance.
(11) (a) Except as required by Subsection (11)(b), the term of office of the directorsappointed by the governor shall be four years, beginning July 1 of the year of appointment.
(b) Notwithstanding the requirements of Subsection (11)(a), the governor shall, at thetime of appointment or reappointment, adjust the length of terms to ensure that no more than twoterms expire in a calendar year.
(12) Each director shall hold office until the director's successor is appointed andqualified.
(13) When a vacancy occurs in the membership of the board for any reason, thereplacement shall be appointed for the unexpired term.
(14) The board shall annually elect a chair and other officers as needed from itsmembership.
(15) (a) The board shall meet at least quarterly at a time and place designated by thechair.
(b) The chair:
(i) may call board meetings more frequently than quarterly; and
(ii) shall call additional board meetings if requested to do so by a majority of the board.
(16) Four directors are a quorum for the purpose of transacting all business of the board.
(17) Each decision of the board requires the affirmative vote of at least four directors forapproval.
(18) (a) (i) A director may receive compensation and be reimbursed for reasonableexpenses incurred in the performance of the director's official duties:
(A) as determined by the board of directors; and
(B) if the aggregate of compensation paid to all directors of the Workers' CompensationFund in a calendar year is less than or equal to the amount described in Subsection (18)(a)(ii).
(ii) (A) For the period beginning May 1, 2007 and ending December 31, 2007, theamount described in Subsection (18)(a)(i)(B) is $75,000 except that any compensation paid to adirector of the Workers' Compensation Fund on or after January 1, 2007 but on or before April30, 2007 shall be included in determining whether the aggregate amount described in Subsection(18)(a)(i)(B) is exceeded.
(B) For calendar years beginning on or after January 1, 2008, the amount described inSubsection (18)(a)(i)(B) is the sum of the amount under this Subsection (18)(a) for the previousyear and an amount equal to the greater of:
(I) an amount calculated by multiplying the amount under this Subsection (18)(a) for theprevious year by the actual percent change during the previous calendar year in the consumerprice index; and
(II) 0.
(C) For purposes of this Subsection (18), the consumer price index shall be calculated asprovided in Sections 1(f)(4) and 1(f)(5), Internal Revenue Code.
(b) Directors may decline to receive compensation and expenses for their service.
(c) The Worker's Compensation Fund shall pay compensation to and reimbursereasonable expenses of directors as permitted by this section:
(i) from the Injury Fund; and
(ii) upon vouchers drawn in the same manner as the Workers' Compensation Fund paysits normal operating expenses.
(d) The following shall serve on the board without payment of compensation, but may bereimbursed for reasonable expenses in accordance with Subsection (18)(a):
(i) the executive director of the Department of Administrative Services, or the executivedirector's designee;
(ii) the chief executive officer of the Workers' Compensation Fund; and
(iii) the director of the Governor's Office of Economic Development if appointed underSubsection (8).
(e) The Workers' Compensation Fund shall annually report to the commissionercompensation and expenses paid to the directors on the board.
(19) The requirement that the governor, with the consent of the Senate, appoint thedirectors of the Workers' Compensation Fund specified in Subsection (5) or (8), does not:
(a) remove from the board of directors the managerial, financial, or operational control ofthe Workers' Compensation Fund;
(b) give to the state or the governor managerial, financial, or operational control of theWorkers' Compensation Fund;
(c) consistent with Section 31A-33-105, cause the state to be liable for any:
(i) obligation of the Workers' Compensation Fund; or
(ii) expense, liability, or debt described in Section 31A-33-105;
(d) alter the legal status of the Workers' Compensation Fund as:
(i) a nonprofit, self-supporting, quasi-public corporation; and
(ii) an insurer:
(A) regulated under this title;
(B) that is structured to operate in perpetuity; and
(C) domiciled in the state; or
(e) alter the requirement that the Workers' Compensation Fund provide workers'compensation:
(i) for the purposes set forth in Section 31A-33-102;
(ii) consistent with Section 34A-2-201; and
(iii) as provided in Section 31A-22-1001.
Amended by Chapter 74, 2007 General Session