Vermont § 687a - Self-insurance by associations

§ 687a. Self-insurance by associations

• (a) Any association that has been in existence in this State for five or more continuous
  years may establish and maintain a nonprofit corporation to secure workers’ compensation
  insurance for employees of participating member employers and for employees of the
  association. The Commissioner of Financial Regulation shall assist with the establishment
  of a nonprofit corporation organized for the purpose of providing compensation under
  this chapter. (b) No association electing to provide workers’ compensation benefits under this chapter
  shall commence business for the purpose of distributing, sharing, or pooling any workers’
  compensation risk until a plan for the operation of the corporation and all contracts,
  agreements, and any other documents underlying or implementing the plan, and all amendments
  to those documents, have been approved by the Commissioner of Financial Regulation. (c) The Commissioner of Financial Regulation shall promptly adopt interim rules to assist
  in the formation of the nonprofit corporations and to expedite approval of any plan
  of operation. The Commissioner shall also adopt rules relating to the administration
  and operation of the nonprofit corporations in order to provide for the fiscal integrity
  of agreements and to provide that trade, market, and claim practices engaged in by
  the nonprofit corporations are equitable, fair, and consistent. In adopting these
  rules, the Commissioner shall recognize that the nonprofit corporations are not for
  profit; that they are undertaking a service to the association’s participating employers
  to control excessive workers’ compensation insurance premiums; and that they shall
  not be considered insurance companies or insurers under the laws of this State. The
  rules shall be modeled after the rules now in effect for intermunicipal insurance
  agreements authorized by 24 V.S.A. chapter 121, subchapter 6, and for captive insurance
  companies chartered under 8 V.S.A. chapter 141. (d) A nonprofit corporation established under this section: (1) Shall have as its purposes: reducing the risk of its members; safety inspections;
  distributing, sharing, and pooling risks; acquiring insurance, excess loss insurance,
  or reinsurance; and processing, paying, and defending claims of employees of employers
  who are members of the association. (2) Shall have the same persons serve as directors who serve as directors of the association. (3) Shall have the same name as the association with the additional words: “Workers’ Compensation
  Self-Insurance Corporation.” (4) May enter into agreements for obtaining or effecting insurance by self-insurance,
  for obtaining or effecting workers’ compensation insurance from any insurer authorized
  to transact business in this State as an admitted or surplus lines carrier, or for
  obtaining and effecting insurance secured in accordance with any other method provided
  by law, or by combination of the provisions of this section for obtaining and effecting
  insurance. Agreements made pursuant to this subsection shall provide for pooling of
  self-insurance reserves, risks, claims and losses, and administrative services and
  expenses associated with the agreement among participating employers. (e) Any contributions made to a nonprofit corporation established under this section for
  the purpose of distributing, sharing, or pooling risks shall be made on an actuarially
  sound basis, and the nonprofit corporation shall have its books, records, and financial
  affairs audited annually. A copy of the annual audit shall be provided to the board
  of directors of the association or its governing body, to each participating employer,
  and to the Commissioner of Financial Regulation. (Added 1993, No. 225 (Adj. Sess.), § 31; amended 1995, No. 180 (Adj. Sess.), § 38(a).)