§ 9-404. Governmental self-insurance group.

   (a) Requirements of Commission. --

   (1) The Commission shall adopt regulations:

      (i) setting procedures and other requirements for a governmental self-insurance group to establish joint self-insurance coverage; and

      (ii) establishing guidelines to govern the investment of surplus moneys not needed to meet current obligations in a manner that will ensure solvency of the Fund and timely payment of claims.

   (2) Notwithstanding the local government guidelines set forth in § 17-101 and 17-102 of the Local Government Article, the guidelines required by paragraph (1)(ii) of this subsection shall:

      (i) state the types of investment in which moneys may be invested;

      (ii) include guidance for the prudent investment of moneys based on claim experience, cash flow projections, income, liquidity, investment ratings, and risk;

      (iii) authorize investments of moneys in equities, provided that investments do not exceed 30 percent of the surplus moneys;

      (iv) provide that moneys not invested in equities shall be invested in accordance with § 17-101 and 17-102 of the Local Government Article; and

      (v) prohibit borrowing of funds for the express purpose of investing those funds.

(b) Authorized participants. --

   (1) Subject to paragraph (2) of this subsection, a governmental self-insurance group may be formed by any combination of:

      (i) counties;

      (ii) municipal corporations;

      (iii) boards of education; and

      (iv) community colleges.

   (2) A board of education or a community college may not participate in a governmental self-insurance group unless its participation is approved by its county governing body.

(c) Scope of county participation. -- Subject to the approval of the Commission, a county that participates in a governmental self-insurance group may include in the coverage:

   (1) any unit created or funded by the county; and

   (2) regardless of funding:

      (i) the board of education of the county;

      (ii) a community college in the county;

      (iii) a regional community college in the county;

      (iv) a housing agency of the county created under Division II of the Housing and Community Development Article;

      (v) a municipal corporation in the county;

      (vi) a multicounty unit that operates in the county; or

      (vii) a revenue authority in the county created by the State.

(d) Certificate of authority. --

   (1) A governmental self-insurance group shall get a certificate of authority from the Commission before the governmental self-insurance group may self-insure.

   (2) To qualify for a certificate under this subsection, a governmental self-insurance group shall satisfy the Commission that the governmental self-insurance group:

      (i) is financially able to pay compensation;

      (ii) will have annual gross premiums of at least $ 250,000; and

      (iii) meets each other requirement under this section, § 9-403 of this subtitle, or a regulation of the Commission.

   (3) The Commission shall issue a certificate of authority to each governmental self-insurance group that meets the requirements of paragraph (2) of this subsection.

(e) Security. --

   (1) At any time, the Commission may require a governmental self-insurance group to secure payment of compensation by depositing with the Commission security:

      (i) in a form accepted by a circuit court for investment of trust money; and

      (ii) in the amount set by the Commission.

   (2) On application and subject to paragraph (3) of this subsection, the Commission shall return security that a governmental self-insurance group has deposited under this subsection if:

      (i) the members of the governmental self-insurance group cease to be subject to this title or secure compensation through an authorized insurer; and

      (ii) the governmental self-insurance group has not been liable on a claim for compensation during the 5 years immediately after the day on which the event described in item (i) of this paragraph occurred.

   (3) After reviewing the application and before returning security to a governmental self-insurance group, the Commission may require the governmental self-insurance group to submit to the Commission an indemnity bond in an amount equal to the value of the security.

(f) Excess insurance. -- Each governmental self-insurance group to which the Commission issues a certificate of authority shall have excess insurance in the amount set by the Commission.

(g) Local office. --

   (1) Each governmental self-insurance group shall have in the State an office run by a competent individual who handles all of the workers' compensation work in the State for the governmental self-insurance group.

   (2) Each governmental self-insurance group shall establish a toll-free telephone number through which an employee or claimant, or a representative of an employee or claimant, may make direct telephone inquiries during regular business hours.

   (3) The Commission may assess a fine not exceeding $ 1,000 on a governmental self-insurance group that does not comply with this subsection.

(h) Advance premium discounts. -- The Commission shall provide for advance premium discounts that are competitive with private insurance advance premium discounts.

(i) Reports; examination of business; assessments. --

   (1) To be informed of the continuing financial responsibility of each governmental self-insurance group, the Commission:

      (i) shall require each governmental self-insurance group to submit a report at least once each year; and

      (ii) may examine the governmental self-insurance group under oath and make other examination of the business of the governmental self-insurance group.

   (2) Each year, the Commission shall assess each governmental self-insurance group an amount not exceeding $ 1,500 to be used for actuarial studies and audits.

(j) Revocation of approval. --

   (1) The Commission shall revoke the approval of a governmental self-insurance group to self-insure under this section if the governmental self-insurance group:

      (i) fails to deposit securities with or submit a bond to the Commission in accordance with subsection (e) of this section;

      (ii) fails to submit satisfactory reports to the Commission in accordance with subsection (i)(1)(i) of this section; or

      (iii) otherwise fails to satisfy the Commission that it is financially able to self-insure.

   (2) Whenever the Commission revokes approval for a governmental self-insurance group to self-insure under this section, the members of the governmental self-insurance group immediately shall secure compensation through an authorized insurer.

   (3) If a member of a governmental self-insurance group fails to secure compensation as required by paragraph (2) of this subsection, the Commission shall order the member of the governmental self-insurance group to secure compensation through an authorized insurer.

(k) Insolvency. -- If a governmental self-insurance group becomes insolvent, the Uninsured Employers' Fund shall pay the outstanding obligations of the governmental self-insurance group for compensation.

HISTORY: An. Code 1957, art. 101, § 16A, 18; 1991, ch. 8, § 2; ch. 21, § 4; 1992, ch. 22, § 1; 2000, ch. 468; 2006, chs. 64, 163; 2007, chs. 41, 42; 2012, ch. 570, § 6; 2013, chs. 136, 676.