Section 031-560-4 - Eligibility for policy issuance and continuanceA. Basic Rule. Except as provided in Subsection B, a lessee, not authorized to self-insure pursuant to 39 M.R.S.A. §23, shall fulfill its statutory responsibility to secure benefits under the Workers' Compensation Act by purchasing and maintaining a standard workers' compensation policy approved by the Superintendent of Insurance. The exposure and experience of the lessee shall be used in determining the premium for policy.
B. Exceptions A lessor which obtains coverage in the voluntary workers' compensation market and is registered with the Superintendent of Insurance, pursuant to 32 M.R.S.A. §14052, may, with the voluntary market insurer's knowledge and consent, elect to secure the coverage on leased employees through a standard workers' compensation policy issued to the lessor. The insurer of the lessor may take all reasonable steps to ascertain exposure under the policy and collect the appropriate premium through the following procedures:
(1) Complete description of lessor's operations;(2) Periodic reporting of covered lessee's payroll, classifications, experience rating modification factors, and jurisdictions with exposure. This reporting may be supplemented by a requirement to submit to the carrier Internal Revenue Service Form 941 or equivalent form on a quarterly basis.(3) Audit of lessor's operations; and(4) Any other reasonable measures to determine the appropriate premium.C. Residual Market Coverage. A lessor which obtains coverage through the residual market established pursuant to 24-A M.R.S.A. §2366 must secure coverage on a multiple coordinated policies basis. This requirement applies to all policies issued or renewed, any applications submitted, and any lessees entering into an employee leasing agreement on or after the effective date of this rule. In order to qualify for coverage on a multiple coordinated policies basis, the lessor shall meet each of the following requirements at application and at annual renewal:
(1) Its officers or directors, or any person with a five percent (5%) or greater interest does not owe any premium to the current or prior insurers, except premium subject to dispute; and(2) Provide such information as is otherwise required by this rule; and(3) Be registered as an employee leasing arrangement with the Bureau of Insurance.D. Application data required for residual market. A lessor which applies for coverage through the residual market shall furnish the following information with the application for coverage:
(1) A list by jurisdiction of each and every name that the employee leasing company has operated under in the preceding five (5) years (including any alternative names and names of predecessors, and successor business entities) along with the policy number and carrier for each workers' compensation insurance policy issued to the employee leasing company under each and every such name in the preceding five (5) years and a copy of the most recent Form 941 filed with the United States Internal Revenue Service by the employee leasing company;(2) A list of each and every person or entity who owns a five percent (5%) or greater interest in the employee leasing business at the time of application and a list of each and every person or entity who formerly owned a five percent (5%) or greater interest in the employee leasing company or its predecessors, successors, or alter egos in the preceding five (5) years;(3) For each person or entity identified in the preceding subsection, a list of all other employee leasing companies in which such person or entity owns or owned a five percent (5) or greater interest and a list of all other businesses in which such person or entity owns or owned a fifty percent (50%) or greater interest at the time application is made and in the preceding twelve (12) months;(4) The Internal Revenue Service Form 941 or equivalent most recently filed with the service with respect to each lessee and a copy of the most recent Form 941 or equivalent filed with the United States Internal Revenue Service by each lessee.(5) A sworn written statement signed by the owner, partner or officer authorized to bind the lessee legally, that states the policy number and carrier for each workers' compensation insurance policy issued to the lessee under each and every such name in the preceding five (5) years;(6) The employee leasing company must also furnish for each lessee at the time of application or renewal; a listing of all leased employees along with their social security number, classification code and wages; and(7) A sworn written statement signed by the owner, partner or officer authorized to bind the lessee legally that states that all of the lessee's non-leased employees are covered by a workers' compensation insurance policy. In addition, the affidavit must provide the policy number, carrier, a listing of the number of non-leased employees, and the aggregate payroll applicable to each classification code. A lessor which applies for coverage through more than one residual market policy at one time needs only to furnish one copy of the information required by paragraphs (1) and (3), above. A lessor which applies for coverage through the residual market pursuant to policies to be coordinated with other policies already in force and with respect to which the information required by paragraphs (1) to (3), above, has been provided previously, shall be required only to provide such information as is necessary to update the previously provided information. With respect to unchanged information, a lessor may make reference to its' previous submissions.
E. Other data required. A lessor which applies for coverage or is covered through either the voluntary market or the residual market mechanism shall also maintain and furnish to the insurer or to the principal rating organization through the residual market servicing carrier sufficient information to permit the calculation of an experience modification factor for each lessee. Such information shall include:
(1) The lessee's corporate name or operating name if the lessee is not a corporation;(2) The lessee's taxpayer or employer identification number;(3) The lessee's risk identification number;(4) A listing of all leased employees associated with each lessee, the applicable classification code and payroll; and(5) Claims information grouped by lessee, and any other information necessary to permit the calculation of an experience modification factor for each lessee.02-031 C.M.R. ch. 560, § 4