CHAPTER 5. WORKER'S COMPENSATION: INSURANCE REQUIREMENTS
IC 22-3-5
Chapter 5. Worker's Compensation: Insurance Requirements
IC 22-3-5-1
Requirements; self-insurance; security; fees
Sec. 1. (a) Every employer under IC 22-3-2 through IC 22-3-6,except those exempted by IC 22-3-2-5, shall:
(1) insure and keep insured the employer's liability underIC 22-3-2 through IC 22-3-6 in some corporation, association,or organization authorized to transact the business of worker'scompensation insurance in this state; or
(2) furnish to the worker's compensation board satisfactoryproof of the employer's financial ability to pay direct thecompensation in the amount and manner and when due asprovided in IC 22-3-2 through IC 22-3-6.
(b) Under subsection (a)(2) the board may require the deposit ofan acceptable security, indemnity, or bond to secure the payment ofcompensation liabilities as they are incurred. The board shall chargethe following:
(1) An initial application fee of five hundred dollars ($500) tobe paid along with the proof of financial ability required underthis section.
(2) A renewal fee of two hundred fifty dollars ($250) if theemployer holds a certificate of self insurance.
(3) A late filing fee of two hundred fifty dollars ($250).
(Formerly: Acts 1929, c.172, s.68.) As amended by P.L.144-1986,SEC.50; P.L.28-1988, SEC.42; P.L.170-1991, SEC.12.
IC 22-3-5-2
Termination of insurance; filing fees; evidence of compliance
Sec. 2. An employer required to carry insurance under IC 22-3-2-5and section 1 of this chapter shall file with the worker'scompensation board, in the form prescribed by it, within ten (10)days after the termination of the employer's insurance by expirationor cancellation, evidence of the employer's compliance with section1 of this chapter and other provisions relating to the insurance underIC 22-3-2 through IC 22-3-6 and shall pay a filing fee in the amountof ten dollars ($10) before July 1, 1992; and five dollars ($5) on andafter July 1, 1992 and before July 1, 1995. Proof of renewal of anexisting insurance policy may be filed every three (3) years, but thefiling fee for the policy shall be paid annually. An employer comingunder the compensation provisions of IC 22-3-2 through IC 22-3-6shall in a like manner file like evidence of compliance on theemployer's part.
(Formerly: Acts 1929, c.172, s.69; Acts 1937, c.214, s.6.) Asamended by Acts 1978, P.L.2, SEC.2211; P.L.28-1988, SEC.43;P.L.170-1991, SEC.13.
IC 22-3-5-3
Self-insurance; certificates; revocation Sec. 3. (a) Whenever an employer has complied with theprovisions of section 1 of this chapter relating to self-insurance, theworker's compensation board shall issue to such employer acertificate which shall remain in force for a period fixed by theboard, but the board may upon at least ten (10) days notice and ahearing to the employer revoke the certificate upon satisfactoryevidence for such revocation having been presented. At any timeafter such revocation the board may grant a new certificate to theemployer upon the employer's petition and satisfactory proof offinancial ability.
(b) All such certificates issued by the industrial board before May21, 1929, shall remain in force for the period for which they wereissued unless revoked as in this section provided.
(Formerly: Acts 1929, c.172, s.70.) As amended by P.L.144-1986,SEC.51; P.L.28-1988, SEC.44.
IC 22-3-5-4
Substitute system of insurance
Sec. 4. (a) Subject to the approval of the worker's compensationboard, any employer may enter into or continue any agreement withthe employer's employees to provide a system of compensation,benefit, or insurance in lieu of the compensation and insuranceprovided by IC 22-3-2 through IC 22-3-6. No such substitute systemshall be approved unless it confers benefits upon injured employeesand their dependents at least equivalent to the benefits provided byIC 22-3-2 through IC 22-3-6, nor if it requires contributions from theemployees unless it confers benefits in addition to those providedunder IC 22-3-2 through IC 22-3-6 at least commensurate with suchcontributions.
(b) Such substitute system may be terminated by the worker'scompensation board on reasonable notice and hearing to theinterested parties if it appears that the same is not fairlyadministered, its operation discloses latent defects threatening itssolvency, or if for any substantial reason it fails to accomplish thepurpose of IC 22-3-2 through IC 22-3-6. In this case the board shalldetermine upon the proper distribution of all remaining assets, if any,subject to the right of any party in interest to take an appeal to thecourt of appeals.
(Formerly: Acts 1929, c.172, s.71.) As amended by P.L.144-1986,SEC.52; P.L.28-1988, SEC.45.
IC 22-3-5-5
Policy provisions; failure to pay claims
Sec. 5. (a) No insurer shall enter into or issue any policy ofinsurance under IC 22-3-2 through IC 22-3-6 until its policy formshall have been submitted to and approved by the department ofinsurance.
(b) All policies of insurance companies and of reciprocalinsurance associations insuring the payment of compensation underIC 22-3-2 through IC 22-3-6 are conclusively presumed to cover all
the employees and the entire compensation liability of the insured.Any provision in any policy attempting to limit or modify theliability of the company or association issuing the same shall bewholly void.
(c) Every policy of any such company or association is deemed toinclude the following provisions and any change in the policy whichmay be required by any statute enacted after May 21, 1929, as fullyas if they were written in the policy:
(1) Except as provided in section 5.5 of this chapter, the insurerhereby assumes in full all the obligations to pay physician'sfees, nurse's charges, hospital services, hospital supplies, burialexpenses, compensation, or death benefits imposed upon oraccepted by the insured under the provisions of IC 22-3-2through IC 22-3-6.
(2) This policy is made subject to IC 22-3-2 through IC 22-3-6relative to the liability of the insured to pay physician's fees,nurse's charges, hospital services, hospital supplies, burialexpenses, compensation, or death benefits to and for theemployees, the acceptance of such liability by the insured, theadjustment, trial, and adjudication of claims for such physician'sfees, nurse's charges, hospital services, hospital supplies, burialexpenses, compensation, or death benefits, and the liability ofthe insurer to pay the same are and shall be a part of this policycontract as fully and completely as if written in this policy.
(3) As between this insurer and the employee, notice to orknowledge of the occurrence of the injury on the part of theinsured (the employer) shall be notice or knowledge thereof, onthe part of the insurer. The jurisdiction of the insured (theemployer) for the purpose of IC 22-3-2 through IC 22-3-6 shallbe the jurisdiction of this insurer. This insurer shall in all thingsbe bound by and shall be subject to the awards, judgments, anddecrees rendered against the insured (the employer) underIC 22-3-2 through IC 22-3-6.
(4) This insurer will promptly pay to the person entitled to thesame all benefits conferred by IC 22-3-2 through IC 22-3-6,including physician's fees, nurse's charges, hospital services,hospital supplies, burial expenses, and all installments ofcompensation or death benefits that may be awarded or agreedupon under IC 22-3-2 through IC 22-3-6. The obligation of thisinsurer shall not be affected by any default of the insured (theemployer) after the injury or by any default in giving of anynotice required by this policy, or otherwise. This policy is adirect promise by this insurer to the person entitled tophysician's fees, nurse's charges, fees for hospital services,charges for hospital supplies, charges for burial compensation,or death benefits, and shall be enforceable in the name of theperson.
(5) Any termination of this policy by cancellation shall not beeffective as to employees of the insured covered hereby unlessat least ten (10) days prior to the taking effect of such
cancellation, a written notice giving the date upon which suchtermination is to become effective has been received by theworker's compensation board of Indiana at its office inIndianapolis, Indiana.
(6) This policy shall automatically expire one (1) year from theeffective date of the policy unless:
(A) the policy covers a period of three (3) years, in whichevent, it shall automatically expire three (3) years from theeffective date of the policy; or
(B) the policy is issued as a continuous policy, in whichevent it shall not expire until terminated by the insured or theinsurer in accord with applicable state law and applicablepolicy provisions.
The termination of a policy, as provided in this subdivision,shall be effective as to the employees of the insured covered bythe policy.
(d) All claims for compensation, nurse's charges, hospitalservices, hospital supplies, physician's fees, or burial expenses maybe made directly against either the employer or the insurer or both,and the award of the worker's compensation board may be madeagainst either the employer or the insurer or both. If any insurer shallfail or refuse to pay final award or judgment (except during thependency of an appeal) rendered against it, or its insured, or, if itshall fail or refuse to comply with any provision of IC 22-3-2 throughIC 22-3-6, the board shall not accept any further proofs of insurancefrom it until it shall have paid the award or judgment or compliedwith the violated provision of IC 22-3-2 through IC 22-3-6.
(Formerly: Acts 1929, c.172, s.72; Acts 1943, c.247, s.1; Acts 1959,c.371, s.1; Acts 1961, c.242, s.1.) As amended by P.L.144-1986,SEC.53; P.L.28-1988, SEC.46; P.L.3-1989, SEC.133; P.L.249-1989,SEC.18; P.L.170-1991, SEC.14; P.L.1-1994, SEC.109;P.L.116-1994, SEC.2; P.L.2-1995, SEC.83; P.L.217-1995, SEC.1.
IC 22-3-5-5.5
Deductibles and co-insurance
Sec. 5.5. (a) Each insurer entering into or issuing an insurancepolicy under IC 22-3-2 through IC 22-3-7 may, as a part of the policyor as an optional endorsement to the policy, offer deductibles orco-insurance, or both, that are optional to the insured for benefitsunder IC 22-3-2 through IC 22-3-7. Each insurer may do thefollowing:
(1) Offer deductibles in multiples of five hundred dollars($500), up to a maximum of five thousand dollars ($5,000) percompensable claim.
(2) Offer co-insurance for each compensable claim. Thefollowing apply to co-insurance provided under thissubdivision:
(A) The co-insurance must require the insurer to pay eightypercent (80%) and the insured to pay twenty percent (20%)of the amount of benefits due to an employee for an injury
compensable under IC 22-3-2 through IC 22-3-7.
(B) An insured employer may not be required to pay morethan four thousand two hundred dollars ($4,200) inco-insurance under this subdivision for each compensableclaim.
(b) An insurer shall fully disclose in writing to prospectivepolicyholders the deductibles and co-insurance offered undersubsection (a). An insured employer who chooses a deductible undersubsection (a):
(1) may choose only one (1) deductible amount; and
(2) is liable for the amount of the deductible for benefits paidfor each compensable claim of an employee under IC 22-3-2through IC 22-3-7.
(c) An insurer shall do the following:
(1) Where a policy provides for a deductible, the insurer shall:
(A) pay all or a part of the deductible amount, whichever isapplicable to a compensable claim, to the person or medicalprovider entitled to the benefits under IC 22-3-2 throughIC 22-3-7; and
(B) seek reimbursement from the employer from theapplicable deductible.
(2) Where a policy provides a deductible or co-insurance, theinsurance company shall pay the full cost of the claim. Theinsurance company shall seek reimbursement from the insuredemployer for its portion of the liability following closing of theclaim or when twenty percent (20%) of the benefits paid exceedfour thousand two hundred dollars ($4,200).
(d) The payment or nonpayment of a deductible or co-insuranceamount by an insured employer to the insurer shall be treated underthe policy insuring the liability for worker's compensation in thesame manner as payment or nonpayment of premiums is treated.
(e) The premium reduction for deductibles or for co-insuranceshall be determined before the application of any experiencemodifications, premium surcharges, or premium discounts. Theapplicable premium reduction percentage is the percentagecorresponding to the appropriate deductible or co-insurance amount.The premium reduction is obtained by the application of theappropriate reduction percentage, shown under miscellaneous valuesin the rate pages, to the premium determined before application ofany experience or schedule modification, premium discounts, or anyretrospective rating plan.
(f) This section does not apply to the following:
(1) An employer that is authorized to self-insure against liabilityfor claims under IC 22-3-2 through IC 22-3-6.
(2) Group self-insurance funds for claims under IC 22-3-2through IC 22-3-6.
(g) A deductible or co-insurance provided under this sectionapplies against the total of all benefits paid for a compensable claim,including benefits paid under the following:
(1) IC 22-3-3-4. (2) IC 22-3-3-8 through IC 22-3-3-10.
(3) IC 22-3-3-17.
(4) IC 22-3-3-22.
(h) An employer may not use the employer's election of adeductible or co-insurance under this section or the payment of adeductible or co-insurance under this section in negotiating with theemployer's employees on any terms of employment. An employee ofan employer that knowingly violates this subsection may file acomplaint with the department of labor. The department of labor mayimpose a civil penalty of not more than one thousand dollars($1,000) against an employer that knowingly violates this subsection.
(i) This subsection applies to an employee of an employer that haspaid a deductible or co-insurance under this section and to theemployee's dependents. If an employee or a dependent recoversdamages against a third party under IC 22-3-2-13, the insurer shallprovide reimbursement to the insured equal to a pro-rata share of thenet recovery by the insurer.
As added by P.L.170-1991, SEC.15.
IC 22-3-5-6
Supplemental administrative fund
Sec. 6. (a) The worker's compensation supplementaladministrative fund is established for the purpose of carrying out theadministrative purposes and functions of the worker's compensationboard. The fund consists of fees collected from employers undersections 1 through 2 of this chapter and from fees collected underIC 22-3-2-14.5 and IC 22-3-7-34.5. The fund shall be administeredby the worker's compensation board. Money in the fund is annuallyappropriated to the worker's compensation board and shall be usedfor all expenses incurred by the worker's compensation board.
(b) The money in the fund is not to be used to replace fundsotherwise appropriated to the board. Money in the fund at the end ofthe state fiscal year does not revert to the state general fund.
As added by P.L.170-1991, SEC.16. Amended by P.L.75-1993,SEC.4; P.L.202-2001, SEC.6.