PRINTER'S NO. 1221
No. 1046 Session of 2003
INTRODUCED BY J. EVANS, BELARDI, CREIGHTON, CURRY, DeWEESE,
GEORGE, HENNESSEY, KIRKLAND, LAUGHLIN, McGEEHAN, MELIO,
MUNDY, SHANER, SOLOBAY, E. Z. TAYLOR, WASHINGTON AND
YOUNGBLOOD, APRIL 2, 2003
REFERRED TO COMMITTEE ON LABOR RELATIONS, APRIL 2, 2003
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 for the Uninsured Employers
8 Guaranty Fund.
9 The General Assembly of the Commonwealth of Pennsylvania
10 hereby enacts as follows:
11 Section 1. The act of June 2, 1915 (P.L.736, No.338), known
12 as the Workers' Compensation Act, reenacted and amended June 21,
13 1939 (P.L.520, No.281), is amended by adding an article to read:
14 ARTICLE XVI
15 UNINSURED EMPLOYERS GUARANTY FUND
16 Section 1601. Definitions.
17 The following words and phrases when used in this article
18 shall have the meanings given to them in this section unless the
19 context clearly indicates otherwise:
20 "Compensation." Benefits paid pursuant to sections 306 and
1 307.
2 "Employer." Any employer as defined in section 303. The term
3 does not include a person that qualifies as a self-insured
4 employer under section 305.
5 "Fund." The Uninsured Employers Guaranty Fund established in
6 section 1602.
7 "Policyholder." A holder of a workers' compensation policy
8 issued by the State Workers' Insurance Fund, or an insurer that
9 is a domestic, foreign or alien mutual association or stock
10 company writing workers' compensation insurance on risks which
11 would be covered by this act.
12 "Secretary." The Secretary of Labor and Industry of the
13 Commonwealth.
14 Section 1602. Fund.
15 (a) Establishment.--
16 (1) There is established a special fund to be known as
17 the Uninsured Employers Guaranty Fund.
18 (2) The fund shall be maintained as a separate fund in
19 the State Treasury subject to the procedures and provisions
20 set forth in this article.
21 (b) Source.--The sources of the fund are:
22 (1) Assessments made to employers and insurance
23 carriers.
24 (2) Reimbursements or restitution.
25 (3) Surcharges under section 1607.
26 (4) Interest on money in the fund.
27 (c) Use.--The administrator shall establish and maintain the
28 fund for the exclusive purpose of paying workers' compensation
29 benefits to injured workers or their dependents for claims
30 arising from injuries or deaths sustained while in the course
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1 and scope of employment with employers that failed to carry
2 workers' compensation insurance coverage at the time the
3 injuries took place.
4 (d) Administration.--The secretary shall be the
5 administrator of the fund and shall have the power to collect
6 money for and disburse money from the fund.
7 (e) Status.--The fund shall have all of the same rights,
8 duties, responsibilities and obligations as an insurer.
9 Section 1603. Claims.
10 (a) Scope.--This section shall apply to claims for an injury
11 or a death which occurs on or after the effective date of this
12 article.
13 (b) Time.--An injured worker must notify the fund within 21
14 days after the worker knew that the employer was uninsured or
15 received confirmation of noninsurance from the Rating Bureau or
16 any other agency charged with providing notice that a claim
17 against the fund is being made. No compensation shall be due
18 until notice is given. Unless notice is given within 120 days of
19 when the employee knew that the employer was uninsured or
20 received notice of noninsurance from the Rating Bureau or any
21 other agency charged with providing such notice, no compensation
22 shall be allowed.
23 (c) Process.--After notice, the fund shall process the claim
24 in accordance with the provisions of this act.
25 (d) Petitions.--No claim petition may be filed against the
26 fund until at least 21 days after notice of the claim is made to
27 the fund.
28 Section 1604. Claim petition.
29 If a claim for compensation is filed under this article and
30 the claim is not voluntarily accepted as compensable, the
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1 employee may file a claim petition naming both the employer and
2 the fund as defendants. A responsive pleading filed by the fund
3 to the claim petition shall serve as an answer on behalf of the
4 uninsured employer. Failure of the uninsured employer to answer
5 a claim petition shall not serve as an admission or otherwise
6 bind the fund under section 416.
7 Section 1605. Department.
8 (a) Insurance inquiry.--Within ten days of notice of a
9 claim, the fund shall demand from the employer proof of
10 applicable insurance coverage. Within 14 days from the date of
11 the fund's request, the employer must provide proof of
12 insurance. If the employer does not provide proof, there shall
13 be a rebuttable presumption of uninsurance; and the fund shall
14 serve as the uninsured employer's insurer for purposes of the
15 claim in question.
16 (b) Reimbursement.--The department shall, on behalf of the
17 fund, exhaust all remedies at law against the uninsured employer
18 in order to collect the amount of a voluntary payment or award,
19 including voluntary payment or award itself and reimbursement of
20 costs, interest, penalties, fees under section 440 and costs of
21 the fund's attorney, which have been paid by the fund. The fund
22 shall also be reimbursed for costs or attorney fees which are
23 incurred in seeking reimbursement under this subsection. The
24 department shall also report the violation of section 305 to the
25 Office of Attorney General, for prosecution of the uninsured
26 employer pursuant to section 305(b). Any restitution obtained
27 shall be paid to the fund.
28 (c) Bankruptcy.--The department has the right to appear and
29 represent the fund as a creditor in a bankruptcy proceeding
30 involving the uninsured employer.
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1 (d) Liens.--If payments of any nature have been made by the
2 fund on behalf of an uninsured employer, the fund shall file a
3 certified proof of payment with the prothonotary of a court of
4 common pleas; and the prothonotary shall enter the entire
5 balance as a judgment against the employer. The judgment shall
6 be a lien against property of the employer, and execution may
7 issue on it. The fund has the right to update the amount of the
8 lien as payments are made.
9 Section 1606. Other remedies.
10 Nothing contained in this article shall serve to abrogate the
11 provisions of section 305(d) allowing the claimant or dependents
12 to bring a direct suit for damages at law as provided by Article
13 II. The fund shall be entitled to assert rights to subrogation
14 under section 319 for recovery made from the employer or any
15 other third party.
16 Section 1607. Surcharge.
17 For the purpose of establishing and maintaining this fund,
18 the secretary shall impose on January 1 an annual surcharge upon
19 each workers' compensation policyholder. Each insurer shall be
20 liable for payment of the annual surcharge under this section.
21 The annual surcharge shall apply to all workers' compensation
22 policies written or renewed. The surcharge shall not apply to
23 reinsurance.
24 Section 1608. Regulations.
25 The department may promulgate regulations for the
26 administration and enforcement of this article.
27 Section 2. This act shall take effect in 60 days.
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