Also known as...
Program areas at North Carolina Self Insurance Security Association
Pursuant to the 2006 and 2011 statutory amendments, the Association expanded its program services to include the purchase of financial guarantees, reinsurance or other instruments to collectively secure all outstanding individual member self-insurer workers' compensation liabilities according to actuarial reports provided by each member self-insurer. The Association, through its statutory mandate, may implement the Association aggregate Security system (aass) on an annual basis. The aass provides for a portfolio based Security system which replaced individual statutory deposits covering member self-insurer workers' compensation liabilities, required as a condition of being a licensed self-insurer. The aass may use a combination of the Security fund, financial guarantees, Insurance policies or other instruments which are purchased by the Association. As of december 31, 2020, the Association had coverage through a three-year Insurance policy which covered all participating member self-insurers in the aass as of december 1, 2019. The annual costs of the aass include the Insurance policy as well as design and implementation which are paid from the aass assessments of participating self-insurers as determined by the Association board of directors. Aass assessments are based on the credit worthiness of participating self-insurers and their pro-rata share of the aggregate outstanding workers' compensation claims liabilities. The Association is authorized to monitor and assess the financial condition of all participating self-insurers. Individual member self-insurers reported outstanding liabilities of approx. $309,219,000 for purposes of the 2020-2021 aass. Although group self-insurers do not participate in the aass, the Association is required to pay covered claims against insolvent group self-insurers in accordance with its statutory mandate. Accordingly, the Association has discretion to conduct separate assessment of group self-insurers.
Upon the insolvency of a member self-insurer, the Association works in concert with the North Carolina department of Insurance, investigates and participates in bankruptcy proceedings, and works with corporate representatives from the insolvent self-insurer to determine the action plan for the payment of oustanding workers' compensation claims. The Association investigates all relevant Insurance carriers to determine what if any recoveries may be available for the payment of workers' compensation claims. In accordance with its statutory mandate, upon default, the Association pursues recoveries in the bankruptcy court and recoveries from all relevant Insurance carriers or financial institutions.