Florida Regulations 69O-190.068

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§ 69O-190.068 Indemnity Agreement.

(1) Each self-insurers fund member shall enter into an indemnity agreement jointly and severally binding the self-insurers fund and each member thereof to comply with the provisions of the Florida Workers' Compensation Law and rules of the Office. Employers in the public sector who are legally unable to enter into a joint and several liability indemnity agreement with private employers shall be ineligible to participate in a self-insurers fund with members who are private employers. Self-insurers funds composed entirely of public employers may be authorized and must qualify in the same manner and be subject to the same regulations as all other self-insurers funds.

(2) The indemnity agreement required pursuant to paragraph 69O-190.056(3)(a), F.A.C., shall conform to the form of the indemnity agreement hereinafter set forth and shall contain all its provisions but may also contain other provisions not inconsistent with these rules or with the required provisions. "Administrator" or "Fiscal Agent" may be substituted as may be necessary to reflect the respective authority, responsibility and duties of these agents, consistent with these rules.

INDEMNITY AGREEMENT

THIS INDENTURE, made and entered into this ___ day of ___, A. D., 20___, by and between all the parties who are now or may hereafter become members of the ___ Self-Insurers Fund, acting by and through a Board of Trustees of their own selection.

WITNESSETH

WHEREAS, the undersigned persons, firms and corporations, hereinafter referred to as "Members," have applied to the Office of Insurance Regulation, hereinafter referred to as the "Office," for authority to pool our liabilities pursuant to the terms of the Florida Workers' Compensation Law and specifically as provided by Section 624.4621, Florida Statutes, and

WHEREAS, the said members have organized and formed a fund pursuant to said section, which fund shall be known as ___ Self-Insurers Fund, herein referred to as the "Fund," and

WHEREAS, the members of said Fund have designated ___ as its first Board of Trustees to direct the affairs of said Fund and to pass on the admissability of future members of the Fund until the members select succeeding Trustees for said Fund, and

WHEREAS, the said Trustees have designated ___ as Service Agent for said Fund, and

WHEREAS, the Office, upon petition of the group, has made its order approving said application, but upon the following conditions, to-wit:

I The group shall, before being issued a certificate, post either a corporate surety bond or securities acceptable to the Office in the aggregate sum of ___ dollars ($) to secure performance of any awards which might be made against the Fund or any member thereof, and keep said bond or securities posted as long as may be required by the Office. The Trustees shall from time to time be entitled to receive all interest accruing on any negotiable securities posted, provided that the Fund is not in default in payment of compensation benefits or of any assessment levied by the Office in accordance with Sections 440.20(9), 440.49 and 440.51, Florida Statutes.

II That the members of said Fund execute a covenant or agreement whereby in addition to the collateral just above mentioned, the Fund and its members will jointly and severally covenant to assume and discharge, by payment, any lawful awards entered by the Office against any member of the group, which awards shall have been sustained by the courts where an appeal by either party is taken.

III That the members of the Fund execute a covenant or agreement whereby the Fund and each member thereof will jointly and severally covenant and agree to pay premiums and assessments, based upon appropriate classifications and rates, into a designated cash reserve fund out of which lawful and proper claims and awards are to be paid, and further, that the group will jointly and severally covenant and agree there will be no disbursements out of this fund by way of dividends or distribution of accumulated reserves to the respective members, except at the direction of the Trustees after application to and approval by the Office.

AND WHEREAS, the members of said fund, through their designated Trustees, have elected to comply with said conditions and become self-insurers, and to execute the other covenants required;

NOW, THEREFORE, for and in consideration of the mutual covenants, promises and obligations herein contained, which are given to and accepted by each member hereof to the other, the parties to this instrument covenant, stipulate and agree as follows:

1. The Fund hereby agrees either to file with the Office a corporate surety bond in the principal sum of ___ dollars ($ ) or to deposit ___ dollars ($ ) in acceptable securities with the Office to secure performance by the Fund of payment of all lawful awards made by the Office against any member or members of the group, predicated on a claim or claims by an employee or employees of any member of the Fund arising out of and in the course of such claimant's employment, and which awards shall have been sustained by the courts where an appeal by either party is taken; and upon condition that said member through which such claim originated shall not have been suspended from, resigned from, or expelled from the Fund after thirty (30) days' notice to the Office of such suspension, resignation, or expulsion, and which notice to the Office shall have been given thirty (30) days prior to the accident complained of.

2. The members of this Fund do jointly and severally covenant and agree that they will pay any such award as would otherwise be a claim against the aforesaid surety bond or securities as soon as the same shall become payable under the laws of the State of Florida; and the group agrees to pay to the Office for the administration of the law such assessments as may be ordered by said Office in accordance with Sections 440.20(9), 440.49 and 440.51, Florida Statutes.

3. The members intend this agreement as a mutual covenant of assumption and not as a partnership, but should any court of competent jurisdiction construe same to be a partnership, then it is the intention of the parties that such partnership be limited in scope to the uses for which this contract is executed and no other.

4. That, subject to the approval of the Office, the Trustees of the Fund shall set up, operate, and enforce its own administrative rules, regulations and by-laws as between the individual members of the Fund.

5. The members ratify and confirm appointment by the Trustees of ___ as Service Agent for the Fund and its members, individually and collectively. The Service Agent shall determine all sums due the Fund from the members, pay all approved items of expense as directed by the Trustees, and give a monthly account of all monies so handled. For handling the administrative and servicing functions of the Fund, the Service Agent shall receive a fee which shall be negotiated from time to time by the Trustees. This fee shall be in consideration of all services and expenses contracted for with the Fund, which services or expenses may include the collecting, disbursing, and accounting for monies collected, counseling with members as to safety hazards, claims handling and investigation, and providing for excess insurance coverage. The Service Agent's books and records are to be open to inspection by the Office and by the Trustees or their agents at all reasonable times.

6. The Service Agent shall deposit to the account of the Trustees, at any bank or banks designated by the Trustees, all premiums as and when collected, and said monies shall be disbursed only as provided by (1) the rules, regulations and by-laws of the Trustees, (2) the Agreement between the Trustees and the Service Agent, and (3) the Rules of the Commission pertaining to self-insurers funds.

7. The Trustees are authorized and directed to take all reasonable precaution to protect the members from losses and shall provide for excess insurance coverage designed to protect said members against excess losses. The contracts for coverage shall be governed by the Rules of the Commission pertaining to self-insurers.

8. All members of the Fund hereby agree that the Trustees may admit as members of this Fund only acceptable and financially sound employers in the State of Florida who have common interest as defined in the Rules of the Commission pertaining to self-insurers, and that, subject to the approval of the Office, the Trustees shall be sole judge of whether or not any applying business shall be admitted to membership; and further, that a member may be suspended or expelled from the Fund after thirty (30) days' notice has been given to him and the Office, and that no liability shall accrue to the Fund or its members for any accident to an employee of the suspended or expelled member occurring after thirty (30) days' notice has been given to him and the Office as above provided.

9. The rules and regulations for the administering of the Fund and the admission and expulsion or suspension of members shall be promulgated by the Trustees. However, each member of the Fund agrees to abide by the following rules and regulations:

(a) The member agrees to follow the safety recommendations of the Trustees and the Service Agent in order to give his employees the maximum in safe and sanitary working conditions, and to follow the general recommendations of the Fund in this field to promote the general welfare of his employees. (b) In the event of an accident or a reported claim, to make immediate provision for remedial care for his employees, and to give immediate notification of said accident to the Service Agent on the prescribed forms. (c) The members shall make prompt payment of all premiums and assessments as required by the Trustees, said premiums to be determined by applying applicable experience modification to the standard rates for the exposure to risk, said standard rates to be as compiled by the National Council on Compensation Insurance and approved by the Office of Insurance Regulation. Further, said premium shall include loss and expense constants and minimum premiums, where applicable. Finally, said premium may be reduced by any discount allowed by the Trustees as long as such discount does not exceed the amount permitted by the Rules of the Commission pertaining to self-insurers. (d) The member hereby appoints the Service Agent of this Fund as his agent and attorney-in-fact to act in his behalf and to execute all contracts and reports, waivers, agreements, excess insurance contracts, and service contracts; to make or arrange for payment of claims, medical expenses, and all other things required or necessary insofar as they affect his workers' compensation and/or employer's liability under Florida law and as covered by the terms of this Fund Agreement and the rules and regulations as now provided or as hereafter promulgated by the Trustees and the Office. (e) The member agrees that in the event of the payment of any loss by the Fund under this contract, the Fund shall be subrogated to the extent of such payment to all the rights of the member against any person or other entity legally responsible for damages for said loss, and in such event the member hereby agrees to render all reasonable assistance, other than pecuniary, to effect recovery. (f) The Fund is to defend in the name of and on behalf of the member any suits or other proceedings which may at any time be instituted against him on account of injuries or death within the purview of the Florida Workers' Compensation Law or on the basis of employer's liability, including suits or other proceedings alleging such injuries and demanding damages or compensation therefor, although such suits, other proceedings, allegations or demands are wholly groundless, false, or fraudulent, and to pay all costs taxed against this member in any legal proceeding defended by the company, all interest accruing after entry of judgment and all expenses incurred for investigation, negotiation or defense. (g) Liability of the Fund to the employees of any employer is specifically limited to such obligations as are imposed by Florida law against the employer for workers' compensation and/or employer's liability. (h) The Trustees of the Fund, the Service Agent, and any of their agents, servants, employees or attorneys shall be permitted at all reasonable times to inspect the work places, plants, works, machinery and appliances covered by this agreement, and shall be permitted at all reasonable times and within two years after the final termination of the membership to examine members' books, vouchers, contracts, documents, and records of any and every kind which show or tend to show or verify the premium which is payable under the terms hereof. (i) The coverage of the Fund does not apply to punitive or exemplary damages on account of such injuries to any employee or employer in violation of law. (j) Coverage by the Fund under the terms of this agreement shall expire and be cancelled automatically for nonpayment of premium, and a member may be expelled and dropped from the Fund upon thirty (30) days written notice by the Trustees or the Service Agent of the Fund to the member stating when, no less than thirty (30) days thereafter, cancellation shall be effective. (k) The Fund shall not be liable for any additional compensation imposed by Section 440.54, Florida Statutes.

10. The Trustees are authorized to set aside from the premiums collected a reasonable sum for the operating expenses or administrative expenses of the Fund. All remaining funds coming into their hands during any one fiscal year of the Fund shall be set aside and shall be used only for the following purposes:

(a) Fee for the Service Agent for said Fund as provided in paragraph 5., supra. (b) Payments for medical, surgical, hospital and nursing expense, and payments of compensation to employees covered by this contract, including settlements, awards, judgments, legal fees, and costs in all contest cases. (c) Payment of Administrative, Special Disability Fund, and other assessments as required by the Office. (d) Payment of cost of all bonds and auditing expenses required of the Fund or its agents or employees by the Office. (e) Distribution to members in such manner as the Trustees shall deem to be equitable of any excess monies remaining after payment of claims and claims expenses and after provision has been made for open claims and outstanding reserves; provided, however, that no such distributions shall be made prior to the approval of the Office, and after complying with the applicable law and rules; provided, further, that undistributed excess funds from previous Fund Years may be distributed at any time if not required for reserves and if approved for distribution by the Office.

11. The Fund shall operate on a fiscal year from 12:01 a.m. ___ first to midnight of the last day in ___ of the succeeding year. Application for continuing membership, when approved in writing by the Trustees or their designee, shall constitute a continuing contract for each succeeding fiscal period unless cancelled by the Office or the fund, or unless the member shall have resigned or withdrawn from said Fund by written notice.

12. The members jointly and severally covenant and agree that there will be no disbursement out of this Fund by way of dividends or distribution of accumulated reserve to members until after provision has been made for all obligations under the Workers' Compensation Law against said Fund and except at the discretion of the Trustees, upon application to and approval by the Division.

13. Any member who formally applies for membership in this Fund and is accepted by the Trustees shall thereupon become a party to this agreement and be bound by all of the terms and conditions hereof, and said approved application shall constitute a counterpart of this agreement.

IN WITNESS WHEREOF, the members of ______________ Self-Insurers Fund have caused these presents to be signed by their duly authorized Chairman of the Board of Trustees and have had this agreement attested by its duly authorized secretary.

___________________ Self-Insurers Fund

By ________________________________

CHAIRMAN ATTEST: ___________________________________

Secretary of Board of Trustees Signed, sealed and delivered in the presence of: ____________________________________ ____________________________________

We, the undersigned ____________ do hereunto set our hands and seals to certify our acceptance of our duties as Service Agent for ___

Self-Insurers Fund this ________ day of __________ A.D., 20________.

Signed, sealed and delivered in the presence of: ________________________________________ ________________________________________

Specific Authority 440.591, 440.38(l)(b)1., 624.4621 FS. Law Implemented 624.4621 FS. History-New 10-1-82, Formerly 38F-5.68, Amended 3-11-90, Formerly 38F-5.068, 4-190.068.