KRS 342.122: Special fund assessments -- Annual adjustments -- Quarterly payments --

Electronic remittance -- Reports -- Central claim registry.

(1) (a) For calendar year 1997 and for each calendar year thereafter, for the purpose

of funding and prefunding the liabilities of the special fund, financing the

administration and operation of the Kentucky Workers' Compensation

Funding Commission, and financing the expenditures for all programs in the

Department of Workers' Claims, Occupational Safety and Health R eview

Commission, Workers' Compensation Nominating Committee, Department of

Workplace Standards, except expenditures for the Division of Wages and

Hours contained in the Department of Workplace Standards and the

proportional support for general administrat ion and support based on an

approved indirect cost allocation plan within the Department of Workers'

Claims and the Education and Labor Cabinet, as reflected in the enacted

budget of the Commonwealth and enacted by the General Assembly, the

funding commiss ion shall impose a special fund assessment rate of nine

percent (9%) upon the amount of workers' compensation premiums received

on and after January 1, 1997, through December 31, 1997, by every insurance

carrier writing workers' compensation insurance in t he Commonwealth, by

every self -insured group operating under the provisions of KRS 342.350(4)

and Chapter 304, and against the premium, as defined in KRS 342.0011, of

every employer carrying his or her own risk.

(b) 1. The funding commission shall, for cal endar year 1998 and thereafter,

establish for the special fund an assessment rate to be assessed against

all premium received during that calendar year which shall produce

enough revenue to amortize on a level basis the unfunded liability of the

special fu nd as of June 30 preceding January 1 of each year, for the

period remaining until December 31, 2029. The special fund assessment

imposed by the funding commission shall continue to be assessed to

finance the administration and operation of the Kentucky Wor kers'

Compensation Funding Commission under subsection (1)(a) of this

section, and financing the expenditures for all programs in the

Department of Workers' Claims, Occupational Safety and Health

Review Commission, Department of Workplace Standards, exclud ing

expenditures for the Division of Wages and Hours contained in the

Department of Workplace Standards and the proportional support for

general administration and support based on an approved indirect cost

allocation plan within the Department of Workers' Claims and the

Education and Labor Cabinet.

2. For the purpose of establishing the assessment rate after the liabilities of

the special fund have been funded or prefunded, the Workers'

Compensation Funding Commission, the Department of Workers'

Claims, th e Occupational Safety and Health Review Commission, the

Department of Workplace Standards, excluding the Division of Wages

and Hours contained within the Department of Workplace Standards,

and the Education and Labor Cabinet, shall each submit a budget to the

commissioner for approval. The commissioner shall submit a combined

budget request for use of the special fund assessment, subject to the

approval of the Workers' Compensation Funding Commission, to the

chairs of the House Standing Committee on Appropr iations and

Revenue and the Senate Standing Committee on Appropriations and

Revenue. The combined budgets of the Occupational Safety and Health

Review Commission, Department of Workplace Standards, and the

proportional support for the general administratio n and approved

indirect cost allocation to the Education and Labor Cabinet, shall not

exceed fifty percent (50%) of the total combined budget submitted by

the commissioner.

3. The interest rate to be used in this calculation shall reflect the funding

commission's investment experience to date and the current investment

policies of the commission. This assessment shall be imposed upon the

amount of workers' compensation premiums received by every

insurance carrier writing workers' compensation insurance in t he

Commonwealth, by every self -insured group operating under the

provisions of KRS 342.350(4) and Chapter 304, and against the

premium, as defined in KRS 342.0011, of every employer carrying its

own risk. On or before October 1 of each year, the commission shall

notify each insurance carrier writing workers' compensation insurance in

the Commonwealth, every group of self -insured employers, and each

employer carrying its own risk, of the rates which shall become effective

on January 1 of each year, unless modified by the General Assembly.

(c) All assessments imposed by this section shall be paid to the Kentucky

Workers' Compensation Funding Commission and shall be credited to the

benefit reserve fund within the Kentucky Workers' Compensation Funding

Commission.

(d) The assessments imposed in this chapter shall be in lieu of all other

assessments or taxes on workers' compensation premiums.

(2) (a) These assessments shall be paid quarterly not later than the thirtieth day of the

month following the end of the qu arter in which the premium is received.

Receipt shall be considered timely through actual physical receipt or by

postmark of the United States Postal Service. Employers carrying their own

risk and employers defined in KRS 342.630(2) shall pay the annual

assessments in four (4) equal quarterly installments.

(b) Beginning on January 1, 2020, all assessments shall be electronically remitted

to the funding commission quarterly not later than the thirtieth day of the

month following the end of the quarter in which the premium is received.

Receipt shall be considered timely when filed and remitted using the

appropriate electronic pay system as prescribed by the funding commission.

Employers carrying their own risk and employers defined in KRS 342.630(2)

shall pay the annual assessments in four (4) equal quarterly installments.

(3) The assessments imposed by this section may be collected by the insurance carrier

from the insured. However, the insurance carrier shall not collect from the employer

any amount exceeding the assessments imposed pursuant to this section. If th e

insurance carrier collects the assessment from an insured, the assessment shall be

collected at the same time and in the same proportion as the premium is collected.

The assessment for an insurance policy or other evidence of coverage providing a

deductible may be collected in accordance with this chapter on a premium amount

that equates to the premium that would have applied without the deductible. Each

statement from an insurance carrier presented to an insured reflecting premium and

assessment amounts shall clearly identify and distinguish the amount to be paid for

premium and the amount to be paid for assessments. No insurance carrier shall

collect from an insured an amount in excess of the assessment percentages imposed

by this chapter. The assessment for an insurance policy or other evidence of

coverage providing a deductible may be collected in accordance with this chapter

on a premium amount that equates to the premium that would have applied without

the deductible. The percentages imposed by this c hapter for an insurance policy

issued by an insurance company shall be those percentages in effect on the annual

effective date of the policy, regardless of the date that the premium is actually

received by the insurance company.

(4) A self-insured group m ay elect to report its premiums and to have its assessments

computed in the same manner as insurance companies. This election may not be

rescinded for at least ten (10) years, nor may this election be made a second time

for at least another ten (10) years, except that the board of directors of the funding

commission may, at its discretion, waive the ten (10) year ban on a case -by-case

basis after formal petition has been made to the funding commission by a self -

insured group.

(5) The funding commission, as part of the collection and auditing of the special fund

assessments required by this section, shall annually require each insurance carrier

and each self -insured group to provide a list of employers which it has insured or

which are members and the amount collected from each employer. Additionally, the

funding commission shall require each entity paying a special fund assessment to

report the SIC code for each employer and the amount of premium collected from

each SIC code. An insurance carrier or self -insured group may require its insureds

or members to furnish the SIC code for each of their employees. However, the

failure of any employer to furnish said codes shall not relieve the insurance carrier

or self -insured group from the obligation to furnish same to the funding

commission. The Department of Workforce Development, Education and Labor

Cabinet, is hereby directed to make available the SIC codes assigned in its records

to specific employers to aid in the reporting and recording of the special fund

assessment data.

(6) Each self -insured employer, self -insured group, or insurance carrier shall provide

any information and submit any reports the Department of Revenue or the funding

commission may require to effectuate the provisions of this section. In addi tion, the

funding commission may enter reciprocal agreements with other governmental

agencies for the exchange of information necessary to effectuate the provisions of

this section.

(7) The special fund shall be required to maintain a central claim registr y of all claims

to which it is named a party, giving each such claim a unique claim number and

thereafter recording the status of each claim on a current basis. The registry shall be

established by January 26, 1988, for all claims on which payments were ma de since

July 1, 1986, or which were pending adjudication since July 1, 1986, by audit of all

claim files in the possession of the special fund.

(8) The fund heretofore designated as the subsequent claim fund is abolished, and there

is substituted therefor the special fund as set out by this section, and all moneys and

properties owned by the subsequent claim fund are transferred to the special fund.

(9) Notwithstanding any other provisions of this section or this chapter to the contrary,

the total amount o f funds collected pursuant to the assessment rates adopted by the

funding commission shall not be limited to the provisions of this section.

(10) All assessment rates imposed for periods prior to January 1, 1997, under KRS

342.122 shall forever remain appl icable to premiums received on policies with

effective dates prior to January 1, 1997, by every insurance carrier writing workers'

compensation insurance in the Commonwealth, by every self -insured group

operating under the provision of KRS 342.350(4) and C hapter 304, and against the

premium, as defined in KRS 342.0011, of every employer carrying its own risk.