Rules & Regulations of the State of Tennessee
Title 0780 - Commerce and Insurance
Subtitle 0780-01 - Insurance Division
Chapter 0780-01-54 - Self-Insured Worker's Compensation Pools
Section 0780-01-54-.02 - DEFINITIONS

Universal Citation: TN Comp Rules and Regs 0780-01-54-.02

Current through September 24, 2024

(1) "Administrator" means any person engaged by a pool to carry out the policies established by the pool's board of trustees and to provide daily management of the pool.

(2) "Certificate of Authority" means a license issued by the Commissioner to a pool granting it the authority to insure the workers' compensation liabilities of its members for such members' employees in this State.

(3) "Commissioner" means the Commissioner of the Tennessee Department of Commerce and Insurance.

(4) "Declaration" or "declared" for purposes of Rule 0780-01-54-.15 means an action by a Board that has the effect of making the surplus monies for a fund year payable to its members, regardless of whether the amount of surplus is known at the time of the declaration or whether it is intended to be paid at that time.

(5) "Department" means the Tennessee Department of Commerce and Insurance.

(6) "Designated Rate Service Organization" means the rate service organization designated by the Commissioner pursuant to T.C.A. §56-5-320.

(7) "Fund year" means the fiscal year during which workers' compensation insurance liabilities and expenses associated therewith are incurred by a pool. Each fund year shall be considered separately for purposes of allocated losses and expenses and for reserving for and paying such losses and expenses.

(8) "IBNR" or "Incurred But Not Reported" means those claims which have been incurred by an insured of the pool but which have not been submitted to the pool for payment of workers' compensation benefits.

(9) "Insolvent" or "insolvency" means a pool whose liabilities exceed the value of its assets and/or that has stopped paying debts in the ordinary course of business or is unable to pay them as its debts fall due, as may be shown by an excess of the pool's required liability reserves and other liabilities over its assets.

(10) "Known Claims" means claims that have been incurred by an insured of the pool and identified to, or submitted to, the pool for payment of workers' compensation benefits.

(11) "Loss reserves" means funds of the pool immediately available to pay:

(a) known or open claims and expenses associated therewith;

(b) IBNR and expenses associated therewith; and

(c) expenses associated with run-off or termination of a pool.

(12) "Manual Rate" means the product of the advisory prospective loss cost and a pool's loss cost multiplier for each individual self-insured pool.

(13) "NAIC" means the National Association of Insurance Commissioners.

(14) "Net premium" means premium derived from standard premium adjusted by any advance premium discounts.

(15) "Person" means any natural or artificial person including, but not limited to, an individual, partnership, association, trust, or corporation.

(16) "Qualified Actuary" means an individual who:

(a) Is a member in good standing of the American Academy of Actuaries and an associate or fellow of the Casualty Actuarial Society;

(b) Is qualified to sign statements of actuarial opinion for workers' compensation insurance company annual statements in accordance with the American Academy of Actuaries qualification standards for actuaries signing such statements;

(c) Is familiar with the reserve requirements applicable to workers' compensation insurance companies; and

(d) Has not been found by the Commissioner (or if so found has subsequently been reinstated as a qualified actuary), following appropriate notice and hearing to have:
1. Violated any provision of, or any obligation imposed by, the Tennessee Insurance Law or other law in the course of his or her dealings as a qualified actuary;

2. Been found guilty of fraudulent or dishonest practices;

3. Demonstrated his or her incompetence, lack of cooperation with the Commissioner, or untrustworthiness to act as a qualified actuary;

4. Submitted to the Commissioner during the past five (5) years an actuarial opinion or memorandum that the Commissioner rejected because it did not meet the provision of this Chapter including standards set by the Actuarial Standards Board; or

5. Resigned or been removed as an actuary within the past five (5) years as a result of failure to adhere to generally acceptable actuarial standards.

(17) "Pool" means any group of employers who, for the purpose of qualifying as self-insurers, pool their liabilities related to workers' compensation insurance, as provided in Tennessee Code Annotated Title 50, Chapter 6.

(18) "Sponsoring association" means a trade or professional association that has been in active existence in Tennessee for at least five (5) years that (1) has a constitution or bylaws; (2) has members that support the association by regular payment of dues on an annual, semiannual, quarterly or monthly basis; and (3) has been created in good faith for purposes other than that of creating a workers' compensation self insurer pool. The sponsoring association must give a group of ten (10) or more employer members of the association permission to pool their liabilities under Tennessee Code Annotated Title 50, Chapter 6 for the purposes of qualifying as self-insurers.

(19) "Standard premium" means the premium derived from the manual rates adjusted by experience modification factors but before advance premium discounts.

(20) "Tennessee Insurance Law" means any law administered by the Commissioner affecting the business of insurance in this state, including, but not limited to T.C.A. § 50-6-405 and T.C.A. §§ 56-1-101, et seq. as well as any rules promulgated thereunder.

(21) "Third party administrator" means a person which contracts with a pool to provide services relating to any of the following:

(a) Claim adjusting;

(b) Safety engineering;

(c) Compilation of statistics and the preparation of reports relating to premium, loss and taxes;

(d) Preparation of other required self-insurance reports;

(e) Development of members' premiums, assessments, and other fees; or

(f) Administration of a claim fund.

(22) "Unearned premium" means the portion of the written premium applicable to the unexpired or unused part of the policy period for which the premium has been paid.

(23) "Workers' compensation" means both workers' compensation and employer's liability, as prescribed under Tennessee Code Annotated Title 50, Chapter 6.

Authority: T.C.A. §§ 50-6-405(c) and (h).

Disclaimer: These regulations may not be the most recent version. Tennessee may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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