H 4795 General Bill, By M.O. Alexander, Cato, Sharpe, R. Smith and 
Young-Brickell

Similar(S 1205)
 A Bill to amend Section 42-7-200, as amended, Code of Laws of South Carolina,
 1976, relating to the Workers' Compensation Uninsured Employers' Fund, so as
 to provide that this Fund ensures payment of Workers' Compensation benefits to
 the employees of companies which were previously qualified as self-insurers if
 security posted by the individual self-insurer proves inadequate to pay
 existing claims, provide that this Fund, under certain conditions, also
 ensures the payment of Workers' Compensation benefits to employees of
 companies which were previously participants in group self-insurance funds,
 and provide for related and incidental matters.

   02/22/94  House  Introduced and read first time HJ-7
   02/22/94  House  Referred to Committee on Labor, Commerce and
                     Industry HJ-7
   03/23/94  House  Committee report: Favorable Labor, Commerce and
                     Industry HJ-6
   04/06/94  House  Read second time HJ-38
   04/07/94  House  Read third time and sent to Senate HJ-10
   04/12/94  Senate Introduced and read first time SJ-15
   04/12/94  Senate Referred to Committee on Judiciary SJ-15
   04/27/94  Senate Committee report: Favorable Judiciary SJ-15

COMMITTEE REPORT

April 27, 1994

H. 4795

Introduced by REPS. M.O. Alexander, Cato, Sharpe, R. Smith and A. Young

S. Printed 4/27/94--S.

Read the first time April 12, 1994.

To whom was referred a Bill (H. 4795), to amend Section 42-7-200, as amended, Code of Laws of South Carolina, 1976, relating to the Workers' Compensation Uninsured Employers' Fund, etc., respectfully

That they have duly and carefully considered the same, and recommend that the same do pass:

TY COURTNEY, for Committee.

A BILL

TO AMEND SECTION 42-7-200, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO THE WORKERS' COMPENSATION UNINSURED EMPLOYERS' FUND, SO AS TO PROVIDE THAT THIS FUND ENSURES PAYMENT OF WORKERS' COMPENSATION BENEFITS TO THE EMPLOYEES OF COMPANIES WHICH WERE PREVIOUSLY QUALIFIED AS SELF-INSURERS IF SECURITY POSTED BY THE INDIVIDUAL SELF-INSURER PROVES INADEQUATE TO PAY EXISTING CLAIMS, PROVIDE THAT THIS FUND, UNDER CERTAIN CONDITIONS, ALSO ENSURES THE PAYMENT OF WORKERS' COMPENSATION BENEFITS TO EMPLOYEES OF COMPANIES WHICH WERE PREVIOUSLY PARTICIPANTS IN GROUP SELF-INSURANCE FUNDS, AND PROVIDE FOR RELATED AND INCIDENTAL MATTERS.

Be it enacted by the General Assembly of the State of South Carolina:

SECTION 1. Section 42-7-200(A) of the 1976 Code, as last amended by Section 994 of Act 181 of 1993, is further amended to read:

"(A) There is established within the office of the Second Injury Fund the South Carolina Workers' Compensation Uninsured Employers' Fund to ensure payment of workers' compensation benefits to injured employees whose employers have failed to acquire necessary coverage for employees. This fund also ensures the payment of workers' compensation benefits to the employees of companies which were previously qualified as self-insurers if security posted by the individual self-insurer proves inadequate to pay existing claims. Similarly, this fund ensures the payment of workers' compensation benefits to the employees of companies which were previously participants in group self-insurance funds if both the posted security of the group and the joint and several liability of the members of the group at the time of the loss prove inadequate to pay existing claims. The fund must be administered by the director of the Second Injury Fund who shall establish procedures to implement this section.

When an employee makes a claim for benefits pursuant to Title 42 and the State Workers' Compensation Commission determines that the employer is subject to Title 42 and is operating without insurance or as an unqualified self-insurer, or as a qualified self-insurer who has become insolvent, or as a member of a self-insurance group that has become insolvent, the commission shall notify the fund of the claim. The fund shall pay or defend the claim as it considers necessary in accordance with the provisions of Title 42.

When the fund is notified of a claim, the fund may place a lien on the assets of the employer or upon members at the time of the loss of the self-insurance group of which the employer was a member by way of lis pendens or otherwise so as to protect the fund from payments of costs and benefits. If the fund is required to incur costs or expenses or to pay benefits, the fund has a lien against the assets of the employer or against any member at the time of the loss of a self-insurance group of which the employer was a member to the full extent of all costs, expenses, and benefits paid and may file notice of the lien with the clerk of court of any county in which the employer or self-insurance group member has assets and with the Secretary of State in the same manner as utilized under Title 36 (Uniform Commercial Code). Any of the employer's assets sold or conveyed during the litigation of the claim must be sold or conveyed subject to the lien.

The fund has all rights of attachment set forth in Section 15-19-10 and has the right to proceed otherwise in the collection of its lien in the same manner as the Department of Revenue and Taxation is allowed to enforce a collection of taxes generally pursuant to Section 12-49-10, et seq. When all benefits due the claimant, as well as all expenses and costs of litigation, have been paid, the fund shall file notice of the total of all monies paid with the clerk of court in any county in which the employer or self-insurance group member has assets and with the Secretary of State. This notice constitutes a judgment against the employer or self-insurance group member and has priority as a first lien in the same manner as liens of the Department of Revenue and Taxation, subject only to the lien of the Department of Revenue and Taxation pursuant to Section 12-49-10, et seq. If the employer or self-insurance group member files for bankruptcy or otherwise is placed into receivership, the fund becomes a secured creditor to the assets of the employer or self-insurance group member in the same manner as the Department of Revenue and Taxation has priority for unpaid taxes, subject only to the lien of the Department of Revenue and Taxation. The fund otherwise has all rights and remedies afforded the Department of Revenue and Taxation as set forth in Section 12-54-10, et seq."

SECTION 2. This act takes effect upon approval by the Governor.