PRINTER'S NO. 3813
No. 2773 Session of 1996
INTRODUCED BY WALKO, LEVDANSKY, SHANER, DERMODY, DeWEESE, TRICH, DALEY, TIGUE, VAN HORNE, LUCYK, ITKIN, ROBINSON, HALUSKA, MANDERINO, RAMOS, PETRARCA, MELIO AND JOSEPHS, JUNE 21, 1996
REFERRED TO COMMITTEE ON LABOR RELATIONS, JUNE 21, 1996
AN ACT 1 Amending the act of June 2, 1915 (P.L.736, No.338), entitled, as 2 reenacted and amended, "An act defining the liability of an 3 employer to pay damages for injuries received by an employe 4 in the course of employment; establishing an elective 5 schedule of compensation; providing procedure for the 6 determination of liability and compensation thereunder; and 7 prescribing penalties," providing that the State Workmen's 8 Insurance Fund be the sole workers' compensation insurer 9 within this Commonwealth. 10 The General Assembly of the Commonwealth of Pennsylvania 11 hereby enacts as follows: 12 Section 1. The definition of "insurer" in section 109 of the 13 act of June 2, 1915 (P.L.736, No.338), known as the Workers' 14 Compensation Act, reenacted and amended June 21, 1939 (P.L.520, 15 No.281) and added July 2, 1993 (P.L.190, No.44), is amended to 16 read: 17 Section 109. In addition to the definitions set forth in 18 this article, the following words and phrases when used in this 19 act shall have the meanings given to them in this section unless 20 the context clearly indicates otherwise: 21 * * *
1 "Insurer" means an entity subject to the act of May 17, 1921 2 (P.L.682, No.284), known as "The Insurance Company Law of 1921," 3 including the State Workmen's Insurance Fund, with which an 4 employer has insured liability under this act pursuant to 5 section 305 or a self-insured employer or fund exempted by the 6 Department of Labor and Industry pursuant to section 305. For 7 insurance policies covering periods commencing on and after 8 January, 1, 1997, for injuries occurring on and after January 1, 9 1997, the term shall mean the State Workmen's Insurance Fund, or 10 a self-insurer under section 305. 11 * * * 12 Section 2. Section 305 of the act, amended July 2, 1993 13 (P.L.190, No.44), is amended to read: 14 Section 305. (a) (1) Every employer liable under this act 15 to pay compensation shall insure the payment of compensation in 16 the State Workmen's Insurance Fund, [or in any insurance 17 company, or mutual association or company, authorized to insure 18 such liability in this Commonwealth,] unless such employer shall 19 be exempted by the department from such insurance. Such insurer 20 shall assume the employer's liability hereunder and shall be 21 entitled to all of the employer's immunities and protection 22 hereunder except, that whenever any employer shall have 23 purchased insurance to provide benefits under this act to 24 persons engaged in domestic service, neither the employer nor 25 the insurer may invoke the provisions of section 321 as a 26 defense. An employer desiring to be exempt from insuring the 27 whole or any part of his liability for compensation shall make 28 application to the department, showing his financial ability to 29 pay such compensation, whereupon the department, if satisfied of 30 the applicant's financial ability, shall, upon the payment of a 19960H2773B3813 - 2 -
1 fee of five hundred dollars ($500), issue to the applicant a 2 permit authorizing such exemption. 3 (2) In securing the payment of benefits, the department 4 shall require an employer wishing to self-insure its liability 5 to establish sufficient security by posting a bond or other 6 security, including letters of credit drawn on commercial banks 7 with a Thomson Bank Watch rating of B or better or a CD rating 8 of BBB or better by Standard and Poor's or Baa 2 or better by 9 Moody's. This paragraph shall not apply to municipalities. 10 (3) The department shall establish a period of twelve (12) 11 calendar months, to begin and end at such times as the 12 department shall prescribe, which shall be known as the annual 13 exemption period. Unless previously revoked, all permits issued 14 under this section shall expire and terminate on the last day of 15 the annual exemption period for which they were issued. Permits 16 issued under this act shall be renewed upon the filing of an 17 application, and the payment of a renewal fee of one hundred 18 dollars ($100.00). The department may, from time to time, 19 require further statements of the financial ability of such 20 employer, and, if at any time such employer appear no longer 21 able to pay compensation, shall revoke its permit granting 22 exemption, in which case the employer shall immediately 23 subscribe to the State Workmen's Insurance Fund[, or insure his 24 liability in any insurance company or mutual association or 25 company], as aforesaid. 26 (b) Any employer who fails to comply with the provisions of 27 this section for every such failure, shall, upon conviction in 28 the court of common pleas, be guilty of a misdemeanor of the 29 third degree. If the failure to comply with this section is 30 found by the court to be intentional, the employer shall be 19960H2773B3813 - 3 -
1 guilty of a felony of the third degree. Every day's violation 2 shall constitute a separate offense. A judge of the court of 3 common pleas may, in addition to imposing fines and 4 imprisonment, include restitution in his order: Provided, That 5 there is an injured employe who has obtained an award of 6 compensation. The amount of restitution shall be limited to that 7 specified in the award of compensation. It shall be the duty of 8 the department to enforce the provisions of this section; and it 9 shall investigate all violations that are brought to its notice 10 and shall institute prosecutions for violations thereof. All 11 fines recovered under the provisions of this section shall be 12 paid to the department, and by it paid into the State Treasury 13 if the prosecutor is the Attorney General and to the operating 14 fund of the county in which the district attorney is elected if 15 the prosecutor is a district attorney. 16 (c) In any proceeding against an employer under this 17 section, a certificate of non-insurance issued by the [official 18 Workmen's Compensation Rating and Inspection Bureau] State 19 Workmen's Insurance Fund and a certificate of the department 20 showing that the defendant has not been exempted from obtaining 21 insurance under this section, shall be prima facie evidence of 22 the facts therein stated. 23 (d) When any employer fails to secure the payment of 24 compensation under this act as provided in sections 305 and 25 305.2, the injured employe or his dependents may proceed either 26 under this act or in a suit for damages at law as provided by 27 article II. 28 (e) Every employer shall post a notice at its primary place 29 of business and at its sites of employment in a prominent and 30 easily accessible place, including, without limitation, areas 19960H2773B3813 - 4 -
1 used for the treatment of injured employes or for the 2 administration of first aid, containing: 3 (1) Either the name of the [employer's carrier] State 4 Workmen's Insurance Fund and the address and telephone number 5 [of such carrier or insurer] or, if the employer is self- 6 insured, the name, address and telephone number of the person to 7 whom claims or requests for information are to be addressed. 8 (2) The following statement: "Remember, it is important to 9 tell your employer about your injury." 10 The notice shall be posted in prominent and easily accessible 11 places at the site of employment, including such places as are 12 used for treatment and first aid of injured employes. Such a 13 listing shall contain the information as specified in this 14 section, typed or printed on eight and one-half inch by eleven 15 inch or eight and one-half inch by thirteen inch paper in 16 standard size type or larger. 17 Section 3. The definitions of "insurer" and "carrier" in 18 section 401 of the act, amended February 8, 1972 (P.L.25, 19 No.12), are amended to read: 20 Section 401. * * * 21 The terms "insurer" and "carrier," when used in this article, 22 shall mean the State Workmen's Insurance Fund or other insurance 23 carrier which has insured the employer's liability under this 24 act, or the employer in cases of self-insurance. For injuries 25 occurring on and after January 1, 1997, the term shall mean the 26 State Workmen's Insurance Fund, or a self-insurer. 27 * * * 28 Section 4. Article VII of the act is repealed. 29 Section 5. The act is amended by adding an article to read: 30 ARTICLE VII-A. 19960H2773B3813 - 5 -
1 PREMIUM RATES 2 Section 701-A. All of the powers, duties and functions 3 relating to workers' compensation and occupational disease 4 currently held by insurance rating organizations are hereby 5 transferred to the State Workmen's Insurance Fund. 6 Section 702-A. The State Workmen's Insurance Fund shall be 7 responsible for maintaining the classification system and other 8 functions of rating organizations under the former provisions of 9 Article VII. Premium rates shall be set by the fund. 10 Section 6. (a) Within six months of the date of final 11 enactment of this act, each insurer, other than self-insurers or 12 the State Workmen's Insurance Fund, shall provide to the 13 Insurance Commissioner a final accounting on reserves relating 14 to injuries occurring before January 1, 1997. The Insurance 15 Commissioner shall in each case determine the validity of each 16 accounting submitted. 17 (b) If excess reserves are found to exist, the insurer shall 18 make an appropriate premium refund to the employer. 19 Section 7. This act shall apply on and after January 1, 20 1997. 21 Section 8. This act shall take effect immediately. F3L77DGS/19960H2773B3813 - 6 -