65.2-801 - Insurance or proof of financial ability to pay required.
§ 65.2-801. Insurance or proof of financial ability to pay required.
A. Every employer subject to this title shall secure his liability thereunderby one of the following methods:
1. Insuring and keeping insured his liability in an insurer authorized totransact the business of workers' compensation insurance in this Commonwealth;
2. Receiving a certificate pursuant to § 65.2-808 from the Workers'Compensation Commission authorizing such employer to be an individualself-insurer;
3. Being a member in good standing of a group self-insurance associationlicensed by the State Corporation Commission;
4. Being a member in good standing of a local government group self-insurancepool licensed by the State Corporation Commission pursuant to § 15.2-2706 tooffer workers' compensation coverage; or
5. Entering into an agreement with a professional employer organization forprofessional employer services which includes voluntary market workers'compensation insurance for coemployees of the professional employerorganization and the client company procured from an insurer authorized totransact the business of workers' compensation insurance in thisCommonwealth. A professional employer organization may obtain voluntarymarket workers' compensation insurance in its own name for all coemployeeswhich it shares or which are assigned or allocated to it pursuant to theagreement between the professional employer organization and the clientcompany. The client company shall maintain separate voluntary market workers'compensation insurance insuring any and all employees of the client companynot insured through the policy obtained by the professional employerorganization.
B. An employer who satisfies the requirements of this section shall becertified by the Workers' Compensation Commission as an individualself-insurer and permitted to pay direct the compensation in the amount andmanner and when due as provided for in this title. The Commission shall notcertify an employer as a self-insurer unless it receives in such form as itrequires satisfactory proof of the solvency of such employer, the financialability of the employer to meet his obligations and the ability of theemployer to pay or cause to be paid the compensation in the amount and mannerand when due as provided for in this title. The Commission shall establishreasonable requirements and standards for approval of an employer as aself-insurer including, without limitation, the quality and amount ofsecurity deposits, bonds or indemnity, the amount of advance payments andreserves required, the investment of such funds, and the form and content offinancial information to be submitted by the employer and the frequency ofsuch submissions. For the purposes of any debt/equity ratio (totalliabilities to net worth) minimum standard, a ratio of less than 2.2:1 shallbe deemed satisfactory. The Commission shall, after notice and hearing,embody such requirements and standards and such other requirements as may bereasonably necessary for the purposes of this section in regulations. TheBureau of Insurance of the State Corporation Commission shall, at the requestof the Commission, assist the Commission in establishing the reasonablerequirements and standards for approval and certification of an employer as aself-insurer. The Workers' Compensation Commission may in its discretionrequire the deposit of a financial instrument of a specified amount from anentity approved by the Workers' Compensation Commission to secure the paymentof compensation liabilities as they are incurred. The form of the instrumentto be deposited shall be selected by the employer from the following list ofacceptable financial instruments and may include any combination thereof solong as the amount specified by the Workers' Compensation Commission isdeposited and the actual value thereof maintained: corporate surety bonds,certificates of deposit, United States government obligations, letters ofcredit, and cash.
C. The State Treasurer shall be the custodian of securities deposited by theemployer under the requirements of this section, or under § 65.2-802, and forsuch services he shall receive a compensation of one-tenth of one percent peryear of the amount of securities deposited with him, payable by or on behalfof such employers.
(Code 1950, § 65-100; 1968, c. 660, § 65.1-104.1; 1973, c. 173; 1979, c. 463;1991, c. 355; 1992, c. 816; 1996, c. 181; 2000, cc. 624, 718; 2004, cc. 44,173; 2006, c. 265; 2009, cc. 285, 336.)