(1) There is a long-term actuarial funding crisis in the state-run monopolistic workers' compensation system;
(2) Similar short-term and long-term crises have been ongoing during the past two decades;
(3) During the current crisis, employers in West Virginia find it increasingly difficult to afford the rates charged by the Workers' Compensation Commission for workers' compensation coverage and that paying said rates adversely impacts employers' ability to compete in a global economic environment;
(4) The cost of obtaining workers' compensation coverage from the state system may result in many employers leaving the state;
(5) Employers' access to competitive workers' compensation rates and the resulting economic development benefit is of utmost importance to the citizens of West Virginia;
(6) A mechanism is needed to provide an enduring solution to this recurring workers' compensation crisis;
(7) An employers' mutual insurance company or a similar entity has proven to be a successful mechanism in other states for helping employers secure insurance and for stabilizing the insurance market;
(8) There is a substantial public interest in creating a method to provide a stable workers' compensation insurance market in this state;
(9) The state-run workers' compensation program is a substantial actual and potential liability to the state;
(10) There is substantial public benefit in transferring certain actual and potential future liability of the state to the private sector and creating a stable self-sufficient entity which will be a potential source of workers' compensation coverage for employers in this state;
(11) A stable, financially viable insurer in the private sector will aid in providing a continuing source of insurance funds to compensate injured workers; and
(12) Because the public will greatly benefit from the formation of an employers' mutual insurance company, state efforts to encourage and support the formation of such an entity, including providing funding for the entity's initial capital, is in the clear public interest.
(b) The purpose of this article is to create a mechanism for the formation of an employers' mutual insurance company that will provide:
(1) A means for employers to obtain workers' compensation insurance that is reasonably available and affordable; and
(2) Compensation to employees of mutual policyholders who suffer work place injuries as defined in this chapter.
(c) The further purpose of this article is to transfer New Fund assets relating to the workers' compensation insurance business to the company, including a reasonable level of policyholder surplus, and for the company to assume the New Fund liabilities related to the transferred assets. It is the intent of this article to provide for the initial capitalization of the company to comply with and to meet the requirements of section 351 and related sections of the Internal Revenue Code.
Note: WV Code updated with legislation passed through the 2014 1st Special Session
The WV Code Online is an unofficial copy of the annotated WV Code, provided as a convenience. It has NOT been edited for publication, and is not in any way official or authoritative.