New Mexico § 52-8-7 - Guarantee fund created; assessment for funding

§ 52-8-7. Guarantee fund created; assessment for funding

A. Each certified self-insurer shall contribute to a fund to be known as the “self-insurers'

guarantee fund”. The fund shall be used as a last resort to provide benefits to workers and the families

of workers of self-insurers who become insolvent and otherwise unable to meet their

financial obligations. The board shall determine, subject to approval by the director, when payments may

be made from the fund and when a self-insurer becomes insolvent and otherwise unable

to meet his financial obligations. B. At the time of the initial certification, each self-insurer shall deposit in the

fund an amount equal to one percent of his paid losses for the immediately preceding

year or an average of the preceding three years' New Mexico paid losses, whichever

is less or, in the event the self-insurer has no previous experience, an amount to

be determined by the board and approved by the director. C. After the initial contribution, each certified self-insurer shall continue to make

an annual contribution, based on one percent of the previous year's paid losses, for

two more years. After three years of consecutive contributions, a certified self-insurer shall no

longer be required to pay additional contributions to the fund unless: (1) the director determines that, due to the insolvency of a member of the fund, an

additional assessment is necessary to make the fund actuarially sound; or (2) the board determines the need for any special assessment to ensure the financial

stability of the fund. D. If, at any time, the fund account balance of the self-insurer exceeds one hundred

fifty percent, as calculated in Subsection C of this section, the amount in excess

of one hundred fifty percent shall be refunded to the insurer. E. In computing the account balance due, a self-insurer shall be credited with past

contributions, including interest earned on those contributions. F. Each self-insurer may be required to contribute additional amounts, as determined

by the board and approved by the director, to maintain the financial stability of

the fund. The board shall review at least annually the fund account balance and shall assess

members as appropriate to maintain an adequate fund balance. Catastrophic losses shall be accounted for by a special assessment on members as

determined by the board and approved by the director. G. The assets of the fund are the sole property of the fund; they are not the property

of the self-insurers who contribute to the fund. H. The fund shall be maintained at one or more New Mexico financial institutions as

determined by the board. The fund shall not be considered public money.