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Subchapter 002: MUTUAL WORKERS' COMPENSATION INSURANCE ASSOCIATIONS
§ 4361. Mutual associations authorized
Employers who are subject to the requirements of 21 V.S.A. chapter 9 may, with the
approval of the Commissioner, associate themselves in accordance with the law for
the formation of corporations without capital stock for the purpose of establishing
and maintaining mutual associations to insure their liabilities under 21 V.S.A. chapter
9. (Amended 1981, No. 165 (Adj. Sess.), § 1; 2021, No. 105 (Adj. Sess.), § 178, eff. July 1, 2022.)
§ 4362. Commissioner’s approval required
The Commissioner may require the incorporators of an association formed pursuant to
section 4361 of this subchapter to include in its proposed certificate of incorporation
any lawful provisions for the regulation of the affairs of the association and the
definition of its powers and the powers of its officers, directors, and incorporators
as the Commissioner may deem necessary to ensure that it is well designed and wisely
adapted to its proposed purposes. When the Commissioner has approved the certificate
and it has been filed with the Secretary of State, the incorporators shall promptly
submit copies of it to the Office of the Commissioner and of the Commissioner of Labor. (Amended 2005, No. 103 (Adj. Sess.), § 3, eff. April 5, 2006; 2021, No. 105 (Adj. Sess.), § 179, eff. July 1, 2022.)
§ 4363. Membership
Membership in such association shall be limited to such employers as are liable for
compensation to their employees under the workers’ compensation law, and such association
shall have power by appropriate bylaws to provide for the admission, suspension, withdrawal,
or expulsion of members. (Amended 1981, No. 165 (Adj. Sess.), § 1.)
§ 4364. Control of association
Except as otherwise provided pursuant to this subchapter, an association shall be
subject to the same rules and control as other corporations or associations taking
similar risks in this State, and the Commissioner shall have jurisdiction and power
over the association as provided by the insurance laws of this State. (Amended 2021, No. 105 (Adj. Sess.), § 180, eff. July 1, 2022.)
§ 4365. Policies
A policy shall not be issued by such association until membership in such number and
with such numbers of employees as the Commissioner may decide will give a fair diffusion
of risks shall have obligated themselves to take policies immediately upon their authorization,
nor shall a policy be issued except such as the Commissioner shall have approved as
conforming in all respects to the requirements of the law relating to such associations.
If, at any time by the retirement of members, reduction of numbers of employees, or
other cause the membership of any association shall appear to the Commissioner no
longer to afford a fair diffusion of risks, he or she may suspend or forbid the further
issue of policies until the former conditions of the association have been restored.
§ 4366. Officers and voting rights
The affairs of such an association shall be managed by such officers and directors
as may be chosen in a manner prescribed by the bylaws of the association, provided
each member shall be entitled to cast at least one ballot in all elections and votes
and that a member who has had for six months an average of more than 100 and not more
than 250 employees to whom he or she is bound to pay compensation under the workers’
compensation law shall be entitled to two ballots, and that each additional 150 employees
shall entitle such member to an additional ballot, but no member shall be entitled
to cast more than 10 ballots. (Amended 1981, No. 165 (Adj. Sess.), § 1.)
§ 4367. Power to prescribe and enforce safety rules
An association formed pursuant to the provisions of this subchapter shall have power
to prescribe and enforce reasonable rules for safety on the premises of its members,
subject, however, to the approval of the Commissioner of Labor. The association’s
inspectors shall have free access to all members’ premises during regular working
hours to ensure the safety of those premises. (Amended 2021, No. 105 (Adj. Sess.), § 181, eff. July 1, 2022.)
§ 4368. Premium rates
An association formed pursuant to this subchapter shall have power to determine the
premium rates for each occupation or risk insured by it and to prescribe rates of
cash premiums sufficient to cover losses incurred and current cost. The premium rate
on each policy shall prevail for a full year but annually may be changed by the directors.
As used in this section, “current cost” means an amount sufficient to cover the losses
and expenses incurred and a premium reserve equal to 50 percent of all premiums and
assessments levied or paid. (Amended 2021, No. 105 (Adj. Sess.), § 182, eff. July 1, 2022.)
§ 4369. Reserve requirements
Members of an association formed pursuant to the provisions of this subchapter shall
be required to pay yearly in advance cash premiums and in addition thereto an amount
in negotiable notes or cash sufficient to maintain a reserve equal to that required
of other companies doing the same class of business. Notes shall be payable in whole
or in part on the vote of the directors of the association as such payments may be
required to meet estimated losses or expenses in excess of the current cost and to
meet claims covering losses not payable within the same fiscal year within which the
claim originated. The directors may fix rates of interest on either notes or balances. (Amended 2021, No. 105 (Adj. Sess.), § 183, eff. July 1, 2022.)
§ 4370. Assessments
If an association has not sufficient funds for the payment of losses incurred, reserves,
and expenses, it shall make an assessment for the amount needed to pay such losses,
reserves, and expenses upon the members in proportion to their several payrolls and
rates.
§ 4371. Investments
The funds of such association shall be invested by the directors in the same class
of securities in which the funds of insurance companies may be lawfully invested.
§ 4372. Approval of premiums, liabilities, assessments, and dividends
Such association, subject to the approval of the Commissioner, may determine the premiums,
contingent liabilities, assessments, penalties, and dividends of its members and enforce
or administer the same.
§ 4373. Bylaws and regulations
The association may also make and amend bylaws or regulations consistent with its
certificate of incorporation, for the prompt, economical, and safe conduct of its
affairs. All bylaws and regulations of an association, except safety rules made under
the provisions of section 4367 of this subchapter, shall be filed with the Commissioner
and shall be subject to the Commissioner’s approval. (Amended 2021, No. 105 (Adj. Sess.), § 184, eff. July 1, 2022.)
§ 4374. Appeals to Supreme Court
An association may appeal to the Supreme Court from a decision or order of the Commissioner
affecting such association.