compensation as a self-insured employer becomes a final order of the commission 30 calendar
days from the date of the denial unless within that 30 days the employer or the public agency
insurance mutual that filed the application files an application for a hearing in accordance with
Part 8, Adjudication.
(3) To qualify as a self-insured employer, an employer or a public agency insurance
mutual shall:
(a) submit a written application requesting to directly pay compensation as a self-insured
employer;
(b) annually provide the division proof of the employer's or the public agency insurance
mutual's ability to directly pay compensation in the amount, manner, and time provided by this
chapter and Chapter 3, Utah Occupational Disease Act; and
(c) if requested by the division, deposit acceptable security in the amounts determined by
the division to be sufficient to secure the employer's or the public agency insurance mutual's
liabilities under this chapter and Chapter 3, Utah Occupational Disease Act.
(4) (a) Acceptable security deposited by a self-insured employer in accordance with
Subsection (3)(c) shall be:
(i) deposited on behalf of the division by the self-insured employer with the state
treasurer; and
(ii) withdrawn only upon written order of the division.
(b) The self-insured employer has no right, title, interest in, or control over acceptable
security that is deposited in accordance with this section.
(c) If the division determines that the amount of acceptable security deposited in
accordance with this section is in excess of that needed to secure payment of the self-insured
employer's liability under this chapter and Chapter 3, Utah Occupational Disease Act, the division
shall return the amount that is determined to be excess to the self-insured employer.
(5) (a) The division may at any time require a self-insured employer to:
(i) increase or decrease the amount of acceptable security required to be deposited under
Subsection (3)(c); or
(ii) modify the type of acceptable security to be deposited under Subsection (3)(c).
(b) (i) If the division requires a self-insured employer to take an action described in
Subsection (5)(a), a perfected security interest is created in favor of the division in the assets of
the self-insured employer to the extent necessary to pay any amount owed by the self-insured
employer under this chapter and Chapter 3, Utah Occupational Disease Act, that cannot be paid
by acceptable security deposited in accordance with this section.
(ii) The perfected security interest created in Subsection (5)(b)(i) ends when the
self-insured employer complies with the division's request under Subsection (5)(a) to the
satisfaction of the division.
(6) (a) If an employer or a public agency insurance mutual is approved under Subsection
(2) to directly pay compensation as a self-insured employer, the division may revoke the
employer's or the public agency insurance mutual's approval.
(b) The division's revocation of the employer's or the public agency insurance mutual's
approval under Subsection (6)(a) becomes a final order of the commission 30 calendar days from
the date of the revocation unless within that 30 days the employer or the public agency insurance
mutual files an application for a hearing in accordance with Part 8, Adjudication.
(7) If the division finds that a self-insured employer has failed to pay compensation that
the self-insured employer was liable to pay under this chapter or Chapter 3, Utah Occupational
Disease Act, the division may use the acceptable security deposited and any interest earned on the
acceptable security to pay:
(a) the self-insured employer's liability under this chapter and Chapter 3, Utah
Occupational Disease Act; and
(b) any costs, including legal fees, associated with the administration of the compensation
incurred by:
(i) the division;
(ii) a surety;
(iii) an adjusting agency; or
(iv) the Uninsured Employers' Fund.
(8) (a) If the division determines that the acceptable security deposited under Subsection
(3)(c) should be available for payment of the self-insured employer's liabilities under Subsection
(7), the division shall:
(i) determine the method of claims administration, which may include administration by:
(A) a surety;
(B) an adjusting agency;
(C) the Uninsured Employers' Fund; or
(D) any combination of Subsections (8)(a)(i)(A) through (C); and
(ii) audit the self-insured employer's liabilities under this chapter and Chapter 3, Utah
Occupational Disease Act.
(b) The following shall cooperate in the division's audit under Subsection (8)(a)(ii) and
provide any relevant information in its possession:
(i) the self-insured employer;
(ii) if the self-insured employer is a public agency insurance mutual, a member of the
public agency insurance mutual;
(iii) any excess insurer;
(iv) any adjusting agency;
(v) a surety;
(vi) an employee of a self-insured employer if the employee makes a claim for
compensation under this chapter or Chapter 3, Utah Occupational Disease Act; and
(vii) an employee of a member of a public agency insurance mutual that is approved as a
self-insured employer under this section, if the employee makes a claim for compensation under
this chapter or Chapter 3, Utah Occupational Disease Act.
(9) (a) Payment by a surety is a full release of the surety's liability under the bond to the
extent of that payment, and entitles the surety to full reimbursement by the principal or the
principal's estate including reimbursement of:
(i) necessary attorney's fees; and
(ii) other costs and expenses.
(b) A payment, settlement, or administration of benefits made in good faith pursuant to
this section by a surety, an adjusting agency, the Uninsured Employers' Fund, or this division is
valid and binding as between:
(i) (A) the surety;
(B) adjusting agency;
(C) the Uninsured Employers' Fund; or
Amended by Chapter 71, 2002 General Session
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