Code of Virginia

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Code of Virginia
Title 65.2. Workers' Compensation
Chapter 8. Insurance and Self-Insurance
11/26/2020

Chapter 8. Insurance and Self-Insurance.

§ 65.2-800. Duty to insure payment of compensation; effect of insurance.

A. Every employer subject to the compensation provisions of this title shall insure the payment of compensation to his employees in the manner hereinafter provided. While such insurance remains in force he or those conducting his business shall only be liable to an employee for personal injury or death by accident to the extent and in the manner herein specified.

B. To ensure that all employers who are required to have workers' compensation insurance under this title have notice of such requirement, the appropriate official of a county, city, or town who licenses employers to conduct business under Chapter 37 (§ 58.1-3700 et seq.) of Title 58.1 or the State Corporation Commission who charters employers to conduct business under § 12.1-12 shall provide employers requesting such licenses or charters on and after January 1, 1989, with information concerning statutory requirements for such insurance coverage. The Workers' Compensation Commission shall prepare such information and distribute it to such licensing or chartering officials. The failure of the local official or the State Corporation Commission to give such notice to an employer shall not relieve the employer of the duty of acquiring insurance as required by this title.

C. As used in this section, the words "those conducting his business" shall include any person whose act results in an injury or death compensable under this title and arises out of and in the course of employment by an employer who is or may be liable for the payment of compensation. A person other than an employer or statutory employer, or a person employed by either, whose acts result in such injury or death shall be deemed an "other party" within the meaning of § 65.2-309.

Code 1950, § 65-99; 1968, c. 660, § 65.1-103; 1977, c. 113; 1988, c. 543; 1991, c. 355.

§ 65.2-801. Insurance or proof of financial ability to pay required.

A. Every employer subject to this title shall secure his liability thereunder by one of the following methods:

1. Insuring and keeping insured his liability in an insurer authorized to transact 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 individual self-insurer;

3. Being a member in good standing of a group self-insurance association licensed by the State Corporation Commission;

4. Being a member in good standing of a local government group self-insurance pool licensed by the State Corporation Commission pursuant to § 15.2-2706 to offer workers' compensation coverage; or

5. Entering into an agreement with a professional employer organization for professional employer services which includes voluntary market workers' compensation insurance for coemployees of the professional employer organization and the client company procured from an insurer authorized to transact the business of workers' compensation insurance in this Commonwealth. A professional employer organization may obtain voluntary market workers' compensation insurance in its own name for all coemployees which it shares or which are assigned or allocated to it pursuant to the agreement between the professional employer organization and the client company. The client company shall maintain separate voluntary market workers' compensation insurance insuring any and all employees of the client company not insured through the policy obtained by the professional employer organization.

B. An employer who satisfies the requirements of this section shall be certified by the Workers' Compensation Commission as an individual self-insurer and permitted to pay direct the compensation in the amount and manner and when due as provided for in this title. The Commission shall not certify an employer as a self-insurer unless it receives in such form as it requires satisfactory proof of the solvency of such employer, the financial ability of the employer to meet his obligations and the ability of the employer to pay or cause to be paid the compensation in the amount and manner and when due as provided for in this title. The Commission shall establish reasonable requirements and standards for approval of an employer as a self-insurer including, without limitation, the quality and amount of security deposits, bonds or indemnity, the amount of advance payments and reserves required, the investment of such funds, and the form and content of financial information to be submitted by the employer and the frequency of such submissions. For the purposes of any debt/equity ratio (total liabilities to net worth) minimum standard, a ratio of less than 2.2:1 shall be deemed satisfactory. The Commission shall, after notice and hearing, embody such requirements and standards and such other requirements as may be reasonably necessary for the purposes of this section in regulations. The Bureau of Insurance of the State Corporation Commission shall, at the request of the Commission, assist the Commission in establishing the reasonable requirements and standards for approval and certification of an employer as a self-insurer. The Workers' Compensation Commission may in its discretion require the deposit of a financial instrument of a specified amount from an entity approved by the Workers' Compensation Commission to secure the payment of compensation liabilities as they are incurred. The form of the instrument to be deposited shall be selected by the employer from the following list of acceptable financial instruments and may include any combination thereof so long as the amount specified by the Workers' Compensation Commission is deposited and the actual value thereof maintained: corporate surety bonds, certificates of deposit, United States government obligations, letters of credit, and cash.

C. The State Treasurer shall be the custodian of securities deposited by the employer under the requirements of this section, or under § 65.2-802, and for such services he shall receive a compensation of one-tenth of one percent per year of the amount of securities deposited with him, payable by or on behalf of 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.

§ 65.2-802. Requirements for licensure as group self-insurance association; annual assessment.

A. Two or more employers having a common interest may be licensed by the State Corporation Commission as a group self-insurance association and permitted to enter into agreements to pool their liabilities under this title. The members of any such group self-insurance association may also enter into agreements to pool their liabilities for workers' compensation benefits which may arise under the laws of any other jurisdiction and other types of employers' liabilities for the death or disablement of, or injury to, their employees. Benefits payable by any such association for such members' liabilities under the laws of any other jurisdiction shall extend only to employees otherwise eligible for coverage under the provisions of this title.

B. The State Corporation Commission shall not license a group self-insurance association or grant authorization for an employer to become a member of such group unless it receives in such form as it requires satisfactory proof of the solvency of any such employer, the financial ability of each to meet his obligations as a member, and the ability of the group to pay or cause to be paid the compensation in the amount and manner and when due as provided for in this title and as may be agreed upon with respect to other types of employers' liabilities which may be authorized and provided hereunder.

C. Members of a group shall execute a written agreement under which each agrees to jointly and severally assume and discharge any liability under this title of employers party to such agreement. Agreements among the members shall be subject to approval by the State Corporation Commission; however, no such agreement nor membership in a group self-insurance association shall relieve an employer of the liabilities imposed by this title with respect to his employees. In addition to the rights of the association under such agreements, in the event of failure of the association to enforce such rights after reasonable notice to the association, the State Corporation Commission shall have the right independently to enforce on behalf of the association the joint and several liability of its members under this title and the liability of members for any unpaid contributions and assessments. The State Corporation Commission shall be entitled to recover its expenses and attorneys' fees.

D. Any person, firm, or corporation desiring to engage in the business of providing services for a group self-insurance association shall satisfy the State Corporation Commission of its ability to perform the services necessary to fulfill the employer's obligations under this title before it undertakes to provide such services to any group self-insurance association. The State Corporation Commission may from time to time review and alter any decision approving an employer as a member of a group or its approval of a group or of an agency servicing a group. The State Corporation Commission may in its discretion require the deposit of an acceptable security, indemnity, or bond or the purchase of such excess insurance or the ceding of reinsurance on a specific or aggregate excess of loss basis as may be required by the circumstances.

E. The State Corporation Commission may establish reasonable requirements and standards for the approval of a group self-insurance association and the administration of such associations including, without limitation, the quality, amount and accounting of security deposits, bonds, excess insurance and reinsurance, the membership in any group self-insurance association, the amount of advance payments and reserves required of group self-insurance associations, the investment of such funds, the form and content of financial information to be submitted by a group self-insurance association and the frequency of such submissions, and the terms of agreements between members of a group self-insurance association. The State Corporation Commission may, after notice and hearing, embody such requirements and standards and such other requirements as may be reasonably necessary for the purposes of this section in regulations; however, any group self-insurance association entering into a reinsurance transaction pursuant to the provisions of this section shall be deemed an insurer for purposes of such transaction and shall be subject to Article 3.1 (§ 38.2-1316.1 et seq.) of Chapter 13 of Title 38.2.

F. Notwithstanding any provision of this title to the contrary, each licensed group self-insurance association shall be assessed annually by the State Corporation Commission in like manner and amount to that provided by Chapter 4 (§ 38.2-400 et seq.) of Title 38.2 and shall pay such assessment in accordance with the aforesaid provisions of law; however, for the purposes of such assessment "direct gross premium income" of a licensed group self-insurance association shall be the aggregate of the amounts determined to be subject to the tax imposed by § 65.2-1006 on each employer member of such association.

G. Notwithstanding the provisions of § 49-25, neither the State Corporation Commission nor any other entity or person, as obligee under any surety bond required under this section or any regulation adopted hereunder, shall be required to institute suit against an association as a condition precedent to the surety's performance under the bond.

1979, c. 463, § 65.1-104.2; 1988, c. 365; 1990, c. 306; 1991, c. 355; 1994, cc. 333, 408.

§ 65.2-803. Administrator and service company affiliation prohibited; exception.

A. No person, firm or corporation, which is engaged as an administrator for a group self-insurance association, shall be an employee, officer or director of, or have a direct or indirect financial interest in any person, firm or corporation which is engaged in the business of providing services for a group self-insurance association as a service company.

B. No person, firm or corporation, which is engaged in the business of providing services for a group self-insurance association as a service company, shall be an employee, officer or director of, or have a direct or indirect financial interest in, any person, firm or corporation which is engaged as an administrator for a group self-insurance association.

C. For purposes of this section, the term "firm" or "corporation" shall include any officer, director, or employee of any such firm or corporation.

D. This section shall not be construed to affect any contract, or extensions or renewals thereof, for services as an administrator or service company entered into by a group self-insurance association and effective prior to January 1, 1989.

1989, c. 662, § 65.1-104.3; 1991, c. 355.

§ 65.2-803.1. Requirements for registration as professional employer organization; annual assessment.

A. Any business entity desiring to engage in the business of providing professional employer services shall register with the Commission before any such services may be provided. The Commission may require any business entity having a controlling ownership interest in or sharing common ownership with a professional employer organization providing professional employer services in the Commonwealth to guarantee, in a form prescribed by the Commission, performance of all obligations pursuant to this title, including the payment of workers' compensation benefits.

B. Each registered professional employer organization shall notify the Commission and the Bureau of Insurance of the State Corporation Commission within 30 calendar days of all new or terminated, in whole or in part, client companies. Upon registration and annually thereafter, each registered professional employer organization shall notify the Commission and the Bureau of Insurance of the State Corporation Commission of all client companies. Such notice shall be confidential and shall not be disclosed to the public, provided that the Commission may respond to inquiries as to whether a client company has workers' compensation coverage; however, nothing herein shall be interpreted to prohibit or limit the production of documents containing such information from the professional employer organization pursuant to an otherwise lawful subpoena issued by a court of competent jurisdiction. Each such notification shall indicate, by client company, if the professional employer organization will provide voluntary market workers' compensation insurance and whether the client company will obtain separate workers' compensation insurance. The Commission may require such other information as it deems necessary for the administration of this section.

C. All agreements for professional employer services shall be in writing and shall provide a description of the respective rights and obligations of the professional employer organization and the client company. The professional employer organization shall provide a written summary of such rights and obligations to each coemployee, including information concerning filing for workers' compensation and unemployment benefits. No agreement for professional employer services shall alter or affect the terms and conditions of any collective bargaining agreement between the client company and its employees without the consent of the parties to such collective bargaining agreement.

D. A professional employer organization that is registered with the Commission and operating in compliance with the requirements of this section shall be deemed to be an employer of its coemployees and may assume responsibilities as an employer of its coemployees for the term of its agreement with a client company. A professional employer organization may secure and provide all required voluntary market workers' compensation insurance for its coemployees under a master workers' compensation insurance policy in the name of the professional employer organization.

E. A professional employer organization shall notify in writing the client company and coemployees of its intent to terminate any agreement for professional employer services with a client company at the time of or prior to termination. Such notice shall advise the client company of its obligation to secure workers' compensation coverage. The professional employer organization shall provide a copy of such notice to the Commission and the insurer at the time notice is given to the client company. Workers' compensation insurance coverage shall continue until termination or for fifteen calendar days after receipt of notice of termination by both the Commission and the client company, whichever is later. This section shall not alter the notice obligations of an insurer seeking to cancel workers' compensation coverage pursuant to subsection B of § 65.2-804. If a professional employer organization has received notice that its workers' compensation insurance policy will be cancelled or nonrenewed, the professional employer organization shall notify the client companies within seven calendar days after receipt of the notice. Failure of the professional employer organization to provide such notice to the client companies subrogates the Commission, upon payment of a claim from the Uninsured Employer's Fund to any coemployee of a client company that did not receive notice, to any right to recover damages which the injured coemployee or his personal representative may have against the professional employer organization.

F. This section shall not exempt a client company from any other license requirements imposed under federal, state, or local law, and a coemployee shall be recognized as an employee of the client company for all purposes. For purposes of licensing requirements, a professional employer organization shall not be deemed to be engaged in the occupation, trade or profession of the client company solely through the provision of professional employer services to that client company.

G. Where a professional employer organization or a staffing service has obtained workers' compensation insurance to secure its obligations under this title with respect to compensation on account of injury or death by accident, the rights and remedies available to the employee or coemployee under this title shall be exclusive as to both the client company and the professional employer organization or staffing service in accordance with this title.

H. A professional employer organization that fails to comply with the provisions of this title or with the regulations of the Commission shall be subject to the requirements of Chapter 9 (§ 65.2-900 et seq.) of this title. The Commission is authorized to revoke or suspend any registration hereunder if the professional employer organization fails to comply with the provisions of this title or with the regulations of the Commission. If a registration is revoked as herein provided, the Commission may allow the professional employer organization to reregister upon application therefor if, when and after the conditions upon which revocation was based have been corrected and the professional employer organization has complied with all provisions of this title and applicable regulations. Whenever a registration is revoked or suspended the Commission may request the Office of the Attorney General to petition the circuit court of the jurisdiction in which the professional employer organization is located for an injunction to cause such professional employer organization to cease providing professional employer services. Suspension of a registration shall in all cases be for an indefinite time and the suspension may be lifted and rights under the registration fully or partially restored at such time as the Commission determines that the rights of the registrant appear to so require and the interests of the public will not be jeopardized by resumption of operation.

I. Notwithstanding any provision of this title to the contrary, each registered professional employer organization shall be assessed annually by the Commission, in addition to any other assessments provided in this title, an assessment in an amount not to exceed the sums necessary for the registration and supervision of all professional employer organizations. The assessment shall be apportioned and assessed and paid in proportion to the aggregate of the annual payroll of all coemployees shared by or assigned or allocated to the professional employer organization.

J. The Bureau of Insurance of the State Corporation Commission may request and shall receive information filed with the Commission by a professional employer organization. Such information shall be confidential and shall be used solely for informational purposes by the Bureau of Insurance and its staff.

K. No person shall sell, solicit, or negotiate, as those terms are defined in § 38.2-1800, contracts of insurance for or on behalf of a professional employer organization unless such person is licensed for that class of insurance as an insurance agent, as defined in § 38.2-1800.

L. The Commission may promulgate regulations as it deems necessary for the administration of this section.

2000, cc. 624, 718; 2001, c. 706; 2002, c. 469; 2005, c. 158.

§ 65.2-804. Evidence of compliance with title; notices of cancellation of insurance.

A. 1. Each employer subject to this title shall file with the Workers' Compensation Commission, in form prescribed by it, annually or as often as may be necessary, evidence of his compliance with the provisions of § 65.2-801 and all others relating thereto; however, if the employer secures his liability under this title pursuant to subdivision A 1 of § 65.2-801 then the insurance carrier shall make a filing on behalf of the employer, and such filing shall be made electronically in the form as prescribed and to the agent as designated by the Commission, within 30 days of the inception of the policy. Evidence of an employer's compliance with the provisions of subdivision A 1 of § 65.2-801 shall be deemed to satisfy such provisions if it includes the name and address of the insured, the insured's federal employer identification number, his policy number, dates of insurance coverage, the name and address of his insurer, and the insurer's identification number. Every employer who has complied with the foregoing provision and has subsequently cancelled his insurance or his membership in a licensed group self-insurance association shall immediately notify the Workers' Compensation Commission of such cancellation, the date thereof and the reasons therefor. Every insurance carrier or group self-insurance association shall in like manner notify the Workers' Compensation Commission immediately upon the cancellation of any policy issued by it or any membership agreement, whichever is applicable, under the provisions of this title, except that a carrier or group self-insurance association need not set forth its reasons for cancellation unless requested by the Workers' Compensation Commission.

2. Every employer who cancels his insurance or his membership in a licensed group self-insurance association shall, prior to cancelling his insurance or his membership, give 30 days' written notice to his employees covered. Every employer who receives the notice required under subsection B of this section shall immediately forward a copy to his employees covered. Where the employer is a mine owner or operator, the notice or copy of notice required to be given by this subsection shall also be given to the Chief Mine Inspector. The provisions of this subsection shall not apply with respect to a cancellation incident to a change of insurance or membership where no lapse of coverage occurs.

B. No policy of insurance hereafter issued under the provisions of this title, nor any membership agreement in a group self-insurance association, shall be cancelled or nonrenewed by the insurer issuing such policy or by the group self-insurance association cancelling or nonrenewing such membership, except on 30 days' notice to the employer and the Workers' Compensation Commission, unless the employer has obtained other insurance and the Workers' Compensation Commission is notified of that fact by the insurer assuming the risk, or unless, in the event of cancellation, said cancellation is for nonpayment of premiums; then 10 days' notice shall be given the employer and the Workers' Compensation Commission.

C. The Commission may designate an agent for receipt of any notices required to be given to it pursuant to this section.

Code 1950, § 65-101; 1956, c. 467; 1968, c. 660, § 65.1-105; 1970, c. 470; 1979, c. 463; 1982, c. 383; 1991, c. 355; 1993, c. 725; 2002, c. 812; 2009, c. 150; 2010, cc. 282, 376; 2018, c. 260.

§ 65.2-805. Civil penalty for violation of §§ 65.2-800, 65.2-803.1, and 65.2-804.

A. If such employer fails to comply with the provisions of § 65.2-800 or 65.2-804, he shall be assessed a civil penalty of not more than $250 per day for each day of noncompliance, subject to a maximum penalty of $50,000. Such employer also shall be liable during continuance of such failure to any employee either for compensation under this title or at law in a suit instituted by the employee against such employer to recover damages for personal injury or death by accident, and in any such suit such employer shall not be permitted to defend upon any of the following grounds:

1. That the employee was negligent;

2. That the injury was caused by the negligence of a fellow employee; or

3. That the employee had assumed the risk of the injury.

B. Any person who fails to comply with the provisions of § 65.2-803.1 shall be assessed a civil penalty of not less than $500 nor more than $5,000 for each instance of noncompliance, in addition to any other penalties applicable under this title.

C. The civil penalties herein provided may be assessed by the Commission in an open hearing with the right of review and appeal as in other cases. Upon a finding by the Commission of such failure to comply, and after 15 days' written notice thereof sent by certified mail to the employer, if such failure continues, the Commission may order the employer to cease and desist all business transactions and operations until found by the Commission to be in compliance with the provisions of this chapter.

D. Any civil penalty assessed pursuant to this section shall be divided equally between and paid into the administrative fund established in Chapter 10 (§ 65.2-1000 et seq.) and the Uninsured Employer's Fund established in Chapter 12 (§ 65.2-1200 et seq.). The Commission may add the costs of collection of such civil penalty to the aggregate civil penalty owed, in which event such costs shall be paid into the administrative fund established in Chapter 10 (§ 65.2-1000 et seq.).

Code 1950, § 65-102; 1968, c. 660, § 65.1-106; 1970, c. 470; 1974, c. 314; 1980, c. 443; 1991, c. 355; 1993, c. 378; 2005, c. 69; 2014, c. 204.

§ 65.2-806. Criminal penalties.

In addition to the civil penalties assessed pursuant to § 65.2-805, any employer who knowingly and intentionally fails to comply with the provisions of § 65.2-800 or 65.2-804 is guilty of a Class 2 misdemeanor.

Venue for the prosecution hereof when there is an injury shall lie in the county or city wherein the injury occurred.

1977, c. 434, § 65.1-106.1; 1991, c. 355; 2005, c. 69.

§ 65.2-807. Cost of insurance may not be deducted from wages.

It shall not be lawful for any employer to deduct from the wages of any of his employees any part of the cost of insurance as provided for in § 65.2-801 to insure liability, or to require or permit any of his employees to contribute in any manner toward such cost of insurance. For any violation of the provisions of this section, an employer shall be subject to a fine not exceeding $100 for each offense and shall refund to the individual employee the amount or amounts deducted or contributed. The fine herein provided may be assessed and the refund ordered by the Workers' Compensation Commission in an open hearing with the right of review and appeal as in other cases.

Code 1950, § 65-103; 1968, c. 660, § 65.1-107; 1991, c. 355.

§ 65.2-808. Self-insurance certificate.

Whenever an employer has complied with the provisions of § 65.2-801 relating to self-insurance, the Workers' Compensation Commission shall issue to such employer a certificate which shall remain in force for a period fixed by the Commission. But the Commission may upon at least thirty days' notice and hearing to the employer revoke the certificate upon satisfactory evidence for such revocation having been presented. At any time after such revocation, the Commission may grant a new certificate to the employer upon his petition.

Code 1950, § 65-104; 1968, c. 660, § 65.1-108; 1979, c. 463; 1987, c. 343; 1991, c. 355.

§ 65.2-809. Constructive notice to, jurisdiction of, and awards, etc., binding upon insurer.

All policies insuring the payment of compensation under this title must contain clauses to the effect (i) that as between the employer and the insurer notice to or knowledge of the occurrence of the injury on the part of the insured employer shall be deemed notice or knowledge on the part of the insurer, (ii) that jurisdiction of the insured for the purposes of this title shall be jurisdiction of the insurer, and (iii) that the insurer shall in all things be bound by and subject to the awards, judgments or decrees rendered against such insured employer.

Code 1950, § 65-105; 1968, c. 660, § 65.1-109; 1991, c. 355.

§ 65.2-810. How formal notice may be given.

Whenever by this title or the terms of any policy contract notice is required to be given by an employer to any insurance carrier, the same may be given by delivery or by mailing by registered letter properly addressed and stamped to the principal office or chief agent of such insurance carrier within this Commonwealth or to its home office, or to the secretary, general agent or chief officer thereof in the United States.

Code 1950, § 65-106; 1968, c. 660, § 65.1-110; 1991, c. 355.

§ 65.2-811. Liability of insurer.

No policy of insurance against liability arising under this title shall be issued unless it contains the agreement of the insurer that it will promptly pay the person entitled to the same all benefits conferred by this title and all installments of the compensation that may be awarded or agreed upon and that the obligation shall not be affected by any default of the insured after the injury or by any default in giving notice required by such policy or otherwise. Such agreement shall be construed to be a direct promise by the insurer to the person entitled to compensation, enforceable in his name.

Code 1950, § 65-107; 1968, c. 660, § 65.1-111; 1991, c. 355.

§ 65.2-812. Subrogation of insurance carrier to employer's rights; compromise.

When any employer is insured against liability for compensation with an insurance carrier, and such insurance carrier shall have paid any compensation for which the employer is liable or shall have assumed the liability of the employer therefor, it shall be subrogated to all the rights and duties of the employer and may enforce any such rights in its own name or in the name of the injured employee or his personal representative; however, nothing herein shall be construed as conferring upon the insurance carriers any other or further rights than those existing in the employer at the time of the injury to his employee, anything in the policy of insurance to the contrary notwithstanding. No compromise settlement shall be made by the insurance carrier in the exercise of such right of subrogation without the approval of the Workers' Compensation Commission and the injured employee or the personal representative or dependents of the deceased employee being first obtained.

Code 1950, § 65-108; 1968, c. 660, § 65.1-112; 1991, c. 355.

§ 65.2-813. Insurance deemed subject to title; approval of forms.

Every policy for the insurance of the compensation herein provided or against liability therefor shall be deemed to be made subject to the provisions of this title. No corporation, association or organization shall enter into any such policy of insurance unless its form shall have been approved by the Workers' Compensation Commission.

Code 1950, § 65-109; 1968, c. 660, § 65.1-113; 1991, c. 355.

§ 65.2-813.1. Insurers offering policies with deductibles.

Every insurer against liability arising under this title offering and making available policies in which the insured pays a deductible, without regard to amount and including such policies with deductibles of $1,000 or less, shall provide in such policies that (i) the insurer shall pay all of the deductible amount applicable to a compensable claim under this title to the person or provider entitled thereto, (ii) the insurer shall then obtain reimbursement from the policyholder for the applicable deductible amount, and (iii) failure to reimburse deductible amounts by the policyholder to the insurer will result in the cancellation of the deductible endorsement.

1995, c. 237.

§ 65.2-813.2. Premium discounts; drug-free workplace programs.

Every insurer providing coverage pursuant to this title shall provide a premium discount of up to five percent to every employer instituting and maintaining a drug-free workplace program satisfying such criteria as each insurer may establish.

1997, c. 410; 2001, c. 280.

§ 65.2-814. Insurer to furnish written evidence of coverage on request.

Upon request of its insured, every insurer against liability arising under this title shall furnish to such insured, within five working days of receipt of said request, a certificate or other writing evidencing the effective coverage afforded such insured. Any insurer violating the provisions of this section shall be punished by a fine of $500.

1973, c. 254, § 65.1-113.1; 1991, c. 355.

§ 65.2-815. Group self-insurance association required to furnish written evidence of membership.

Upon request of any member employer, a group self-insurance association shall furnish to such employer a certificate of membership or other written evidence of membership.

1979, c. 463, § 65.1-113.2; 1991, c. 355.

§ 65.2-816. Title not applicable to boiler, etc., insurance.

This title shall not apply to policies of insurance against loss from explosion of boilers or fly wheels or other similar single catastrophe hazards.

Code 1950, § 65-110; 1968, c. 660, § 65.1-114; 1991, c. 355.

§ 65.2-817. Rates; cooperation between State Corporation Commission and Workers' Compensation Commission.

Authority is hereby conferred upon the State Corporation Commission to make such arrangements with the Workers' Compensation Commission as may be agreeable to the Workers' Compensation Commission, for collecting, compiling, preserving and publishing statistical and other data in connection with the work of regulating workers' compensation insurance rates and for the division of the expenses thereof, to the end that duplication of work and expenditures may be avoided. Whenever it deems proper, with the consent of the Workers' Compensation Commission, the State Corporation Commission may appoint members of the Workers' Compensation Commission, or its employees, as special agents of the State Corporation Commission to take testimony and make reports with reference to any matter involving questions of workers' compensation insurance rates.

Code 1950, § 65-113; 1968, c. 660, § 65.1-117; 1991, c. 355.

§ 65.2-818. Minimum standards of service for insurers.

The State Corporation Commission in cooperation with the Workers' Compensation Commission shall establish minimum standards of service for insurers writing workers' compensation policies in this Commonwealth, including but not limited to the servicing of such policies, the establishment of offices within the Commonwealth, and the payment of compensation.

1970, c. 470, § 65.1-117.1; 1991, c. 355.

§ 65.2-819. Penalty for violation of certain provisions.

Any person or persons who shall in this Commonwealth (i) act or assume to act as agent for any such insurance carrier whose authority to do business in this Commonwealth has been suspended, while such suspension remains in force, (ii) fail to comply with requirements or standards imposed under §§ 65.2-817 and 65.2-818 or of Chapter 10 (§ 65.2-1000 et seq.) of this title, or (iii) willfully make a false or fraudulent statement of the business or condition of any such insurance carrier, or a false or fraudulent return as therein provided, shall be deemed guilty of a misdemeanor and, upon conviction, shall be punished by a fine of not less than $100 nor more than $1,000 or by imprisonment for not less than ten nor more than ninety days, or both such fine and imprisonment, in the discretion of the court or jury trying the case.

Code 1950, § 65-114; 1968, c. 660, § 65.1-117.1; 1970, c. 470; 1991, c. 355.

§ 65.2-820. Application to State Corporation Commission for assignment of risk; insurer assigned risk to issue policy.

Every employer subject to the provisions of this chapter who has been unable to obtain a workers' compensation insurance policy shall have the right to apply to the State Corporation Commission to have his risk assigned to an insurance carrier licensed to write and writing workers' compensation insurance in this Commonwealth. The insurance carrier, whether stock, mutual, reciprocal or interinsurer or other type or form of organization, to whom any such risk is assigned shall issue a policy of workers' compensation insurance which will enable such employer to meet the requirements of this chapter.

Code 1950, § 65-114.1; 1956, c. 358; 1968, c. 660, § 65.1-119; 1991, c. 355.

§ 65.2-821. State Corporation Commission to make rules and regulations, and establish rating schedules and rates.

A. The State Corporation Commission may make reasonable rules and regulations for the assignment of risks to insurance carriers. It shall establish such rate classifications, rating schedules, rates, rules and regulations to be used by insurance carriers issuing assigned risk workers' compensation policies in accordance with this chapter as appear to it to be proper.

B. In the establishment of rate classifications, rating schedules, rates, rules and regulations, it shall be guided by such principles and practices as have been established under its statutory authority to regulate workers' compensation insurance rates and it may act in conformity with its statutory discretionary authority in such matters.

Code 1950, § 65-114.2; 1956, c. 358; 1968, c. 660, § 65.1-120; 1991, c. 355.

§ 65.2-821.1. Payment and reimbursement practices; prohibitions.

A. As used in this section, unless the context requires a different meaning:

"Contracting entity" means (i) a person that enters into a provider contract with a provider or (ii) an intended beneficiary of the rights of such person under the provider contract.

"Employer" means the employer; any insurance carrier, group self-insured association, or other person providing coverage for the employer's obligation to provide medical service to a claimant under this title; or any third-party administrator acting on behalf of the employer.

"PPO network" means the multiple provider contracts available to an employer pursuant to a PPO network arrangement.

"PPO network arrangement" means an arrangement under which the PPO network arranger sells, conveys, or otherwise transfers to an employer the ability to discount payments or reimbursements to a provider pursuant to the terms of multiple provider contracts to which the PPO network arranger is a direct party.

"PPO network arranger" means a person that operates a PPO network arrangement.

"Provider," "transition date," and "Virginia fee schedule" have the meaning assigned thereto in § 65.2-605. "Provider" includes a provider's employer or professional business entity.

"Provider contract" means an agreement between a contracting entity and a provider pursuant to which the provider agrees to deliver medical services to a claimant under this title in exchange for payment or reimbursement of an agreed-upon amount.

"Third-party administrator" means a person that administers, processes, handles, or pays claims to providers on behalf of an employer.

B. On and after the transition date:

1. No employer shall pay or reimburse a provider for medical services provided to a claimant less than the amount provided for in the applicable Virginia fee schedule or other amount determined as provided in subdivision B 2 or 3 of § 65.2-605 unless:

a. The employer has directly entered into:

(1) A provider contract with the provider;

(2) A contract with a contracting entity that has entered into a provider contract with the provider; or

(3) A contract with a PPO network arranger that authorizes the employer to use a PPO network to derive a benefit from a provider contract; and

b. The provider has agreed to provide medical services to the claimant for an agreed-upon reimbursement or contractual amount as set forth in a provider contract referenced in subdivision a.

2. A person with whom an employer has directly contracted as described in subdivision 1 a shall not sell, lease, or otherwise disseminate data regarding the payment or reimbursement amounts or terms of a provider contract without the express written consent and prior notification of all parties to the provider contract; however, the express written request from, and prior notification to, a provider shall not be required if the provider's identity has been redacted from such data.

3. If an employer uses or relies on a contract described in subdivision 1 a to discount a payment or reimbursement to a provider, the employer shall notify the provider, at the time it remits the payment or reimbursement, of (i) the name of the provider, contracting entity, or PPO network arranger with whom the employer directly contracted and (ii) how, if other than by a direct contract between the employer and the provider, the employer acquired the right to discount the payment or reimbursement to the provider.

4. If an employer uses or relies on a contract with a PPO network arranger described in subdivision 1 a (3) to discount a payment or reimbursement to a provider, the employer shall not shop for the lowest discount for a specific provider among the provider contracts held in multiple PPO networks. This prohibition shall not bar an employer that has entered into a PPO network arrangement and selected a provider contract in the PPO network from availing itself of all discounts provided pursuant to the selected provider contract in the PPO network.

C. Any person who suffers loss as a result of a violation of this section shall be entitled to initiate an action at the Commission to recover actual damages and interest from the date of the violation until entry of the final award. If the Commission finds that the violation resulted from gross negligence or willful misconduct, it may increase damages to an amount not to exceed three times the actual damages.

2016, cc. 279, 290.

§ 65.2-822. Action by State Corporation Commission upon application.

The State Corporation Commission may, if in its judgment it deems such action to be justified after reviewing all information pertaining to the applicant or policyholder available from its records, the records of the Workers' Compensation Commission or from other sources:

1. Refuse to assign an application;

2. Approve the rejection of an application by an insurance carrier;

3. Approve the cancellation of a workers' compensation policy by an insurance carrier; or

4. Refuse to approve the renewal or the reassignment of an expiring policy.

Code 1950, § 65-114.3; 1956, c. 358; 1968, c. 660, § 65.1-121; 1991, c. 355.

§ 65.2-823. Information filed with State Corporation Commission by insurance carrier to be confidential; exception.

Any and all information filed with the State Corporation Commission by an insurance carrier or a rate service organization in connection with an assigned risk shall be confidential and solely for the information of the State Corporation Commission and its staff and shall not be disclosed to any person, including an applicant, policyholder and any other insurance carrier.

However, at the discretion of the State Corporation Commission, such information may be disclosed to any agent or insurer licensed in the Commonwealth for the purpose of procuring coverage in the voluntary market. Such disclosure shall be limited to the insured's name, address, policy expiration, risk identification number, experience modification factor, governing classification, premium, information pertaining to whether the insured has locations in multiple states, and any other information the State Corporation Commission deems appropriate.

Code 1950, § 65-114.4; 1956, c. 358; 1968, c. 660, § 65.1-122; 1991, c. 355; 1993, c. 985.

§ 65.2-824. Disclosures not required of State Corporation Commission; liability for acts or omissions.

A. The State Corporation Commission shall not be required to disclose to any person, including the applicant or policyholder, its reasons for:

1. Refusing to assign an application;

2. Approving the rejection of an application by an insurance carrier;

3. Approving the cancellation of a workers' compensation policy by an insurance carrier; or

4. Refusing to approve the renewal or the reassignment of an expiring policy.

B. The State Corporation Commission shall not nor shall anyone acting for it be held liable for any act or omission in connection with the administration of the duties imposed upon it by the provisions of this chapter, except upon proof of actual malfeasance.

Code 1950, § 65-114.5; 1956, c. 358; 1968, c. 660, § 65.1-123; 1991, c. 355.