Section 25-5-8 Employers’ Options to Secure Payment of Compensation.

(a) Option to insure risks. An employer subject to this chapter may secure the payment of compensation under this chapter by insuring and keeping insured his or her liability in some insurance corporation, association, organization, insurance association, corporation, or association formed of employers and workers or formed by a group of employers to insure the risks under this chapter, operating by mutual assessment or other plans or otherwise. Notwithstanding the foregoing, the insurance association, organization, or corporation shall have first had its contract and plan of business approved in writing by the Commissioner of the Department of Insurance of Alabama and have been authorized by the Department of Insurance to transact the business of workers’ compensation insurance in this state and under the plan. Notwithstanding any other provision of the law to the contrary, the obligations of employers under law for workers’ compensation benefits for injury of employees may be insured by any combination of life, disability, accident, health, or other insurance provided that the coverages insure without limitation or exclusion the workers’ compensation benefits of this state. (b) Option to operate as self-insurer. An employer subject to this chapter who elects not to insure his or her liability thereunder shall furnish satisfactory proof to the secretary of his or her financial ability to pay directly compensation in the amount and manner and when due as provided by this chapter. Upon receiving satisfactory proof, the secretary shall authorize the employer to operate as a self-insurer. The secretary may prescribe other reasonable rules and regulations for the purpose of protecting the injured employee or the employee’s dependents and set reasonable fees to accompany self-insurance applications. (c) Evidence of compliance. An employer subject to this chapter shall file with the secretary, on a form prescribed by the secretary, annually or as often as the secretary in his or her discretion deems necessary, evidence of compliance with the requirements of this section. In cases where insurance is taken with a carrier duly authorized to write such insurance in this state, notice of insurance coverage filed by the carrier shall be sufficient evidence of compliance by the insured. (d) Certificate of compliance. (1) ISSUANCE, REVOCATION. Upon the employer’s complying with subsection (b) of this section relating to self-insurance, the secretary shall issue to the employer a certificate, which shall remain in force for a period fixed by the secretary. Upon 60 days’ notice and hearing to the employer, the secretary may, for financial reasons, for failure of the employer to faithfully discharge his or her obligations according to the agreements contained in his or her application for self-insurance, or for the violation of any reasonable rule or regulation prescribed by the secretary, revoke the self-insurance certificate, in which case the employer shall immediately insure his or her liability. Certificates of self-insurance issued prior to September 17, 1973, shall continue in force but shall become subject to revocation as provided in this subsection. At any time after the revocation, the secretary may grant a new certificate to the employer upon application by the employer. (2) APPEALS. An appeal may be taken from any ruling of the secretary under subsection (b) of this section or under this subsection to the circuit court. The presiding judge shall, within 10 days after notification of appeal, assign a member of the court to hear the case and the matter shall be set for hearing at the earliest available time. Trial shall be de novo. The taking of an appeal shall not stay the ruling or order appealed from unless good and sufficient bond approved by the judge of the court to which the appeal is taken shall be filed with the court, conditioned on complying with such order as may be legally made effective and further conditioned upon payment by the employer of all final orders for compensation that may be rendered against the employer pending the disposition of the appeal. (e) Penalties for failure to secure payment of compensation; injunctions. An employer required to secure the payment of compensation under this section who fails to secure compensation shall be guilty of a misdemeanor, and upon conviction thereof, shall be subject to a fine of not less than $100.00 nor more than $1,000.00. In addition, an employer required to secure the payment of compensation under this section who fails to secure the compensation shall be liable for two times the amount of compensation which would have otherwise been payable for injury or death to an employee. The secretary may apply to a court of competent jurisdiction for an injunction to restrain threatened or continued violation of any provisions relating to the requirements of insurance or self-insurance. The court may impose civil penalties against an employer in noncompliance with this amendatory act, in an amount not to exceed $100.00 per day. Subsequent compliance with this amendatory act shall not be a defense. (f) Employer insurance policies. (1) REQUIRED AND PROHIBITED PROVISIONS. Insurance policies written pursuant to this section shall contain a clause to the effect that, as between the worker and the insurer, notice to and knowledge by the employer of the occurrence of the injury shall be deemed notice and knowledge on the part of the insurer; that jurisdiction of the employer for the purpose of this chapter shall be jurisdiction of the insurer; and that the insurer will in all things be bound by and subject to the award or judgment rendered against the employer upon the risk so insured. The policies shall provide that the worker shall have an equitable lien upon any amount that shall become owing, on account of the policy, to the employer from the insurer, and in case of legal incapacity or inability of the employer to receive the amount owing and pay it over to the worker or his or her dependent, that the insurer will pay the same direct to the worker or dependent, thereby discharging all obligations under the policy to the employer and all the obligations of the employer and the insurer to the worker. Such policies, however, shall contain no obligations relieving the insurance company from payment of obligations if the employer becomes insolvent or discharged in bankruptcy or otherwise during the period the policy is in force, if the compensation remains owing. The insurer shall be one authorized by law to conduct business in the State of Alabama, and all insurance companies writing such insurance may include in their policies, in addition to the requirements now provided by law, the additional requirements, terms, and conditions provided in this section. (2) FILING OF AND APPROVAL OF PREMIUM AND RISK CLASSIFICATIONS. An insurance corporation, mutual corporation, reciprocal exchange, or association authorized to transact the business of workers’ compensation insurance in this state and which insures employers against liability for compensation under this chapter shall file with the Department of Insurance its classification of risks and premiums relating thereto and any subsequent proposed classification of risks and premiums, together with the basic rates and merit-rating schedules, if a system of schedule rating or merit rating is used by the insurance corporation, exchange, or association, none of which shall take effect until the Commissioner of the Department of Insurance shall have approved the same as reasonable, adequate, and not excessive. All filings with the Department of Insurance containing aggregate industry data of classifications of risks and premiums, rates, and merit-rating schedules pertaining to workers’ compensation insurance shall be public records, notwithstanding any other provisions of Alabama law. The Commissioner of the Department of Insurance shall convene a public hearing with reasonable public notice for the purpose of considering public testimony and other evidence relevant to any filing prior to approval of any bureau loss cost or rate filing related to workers’ compensation insurance. Within 10 days after approval, the Commissioner of the Department of Insurance shall make or cause to be made a sufficient number of copies of same for that purpose, and shall mail at least one copy of each of the same to every insurance carrier writing workers’ compensation business in the State of Alabama, at the carrier’s last address or at the last address of its designated agent to receive the same. The insurance carrier shall (or if it is a member of or associated with a rating or inspection bureau, either or both of them, or a concern or aggregation of like character, it shall cause the rating and inspection bureau, either or both, or concern or aggregation of like character with which it is affiliated to do so) file with the Department of Insurance a full and complete statement of the actuarial and underwriting experience data and the like in its possession, from which and upon which the rates, schedules, and systems so filed were ascertained, calculated, and constructed, and within six months after the expiration of each succeeding six months, shall file a like statement of all actuarial and underwriting data and the like, pertaining to the rates, schedules, and system accumulated or acquired by it during the preceding six months. Upon failure to file the statement within the time specified above, the rates, schedules, and systems may be presumed by the Commissioner of the Department of Insurance, without more, to be excessive, unreasonable, inadequate to provide the necessary reserves, or discriminatory, as the case may be. The Commissioner of the Department of Insurance may withdraw his or her approval of any premium rate or schedule made by an insurance corporation, association, mutual corporation, or reciprocal exchange, if, in his or her judgment, the premium rate or schedule is excessive, unreasonable, discriminatory, or inadequate to provide the necessary reserves. The commissioner shall withdraw approval of any premium rate or schedule shown by a motor common carrier employer to be conditioned on the motor common carrier accepting the coverage of owner-operators or lease-operators as a condition to providing coverage for the motor common carrier employer’s employees. Nothing contained in this chapter or in any other law of this state shall affect the right of an insurance corporation or a mutual or reciprocal insurance corporation or association to issue participating policies or contracts or to pay savings, refunds, or dividends upon the policies or contracts. (3) PAYMENT OF INSURANCE COSTS BY EMPLOYEES. No agreement by an employee to pay to an employer any portion of the cost of insuring his or her risk under this chapter shall be valid unless the agreement between the employer and employee, the plan of which is part of a contract, is approved in writing by the commissioner. But the employer and the worker may agree to carry the risks and to provide other and greater benefits, such as additional compensation; accident, sickness, or old age insurance; or benefits, and the fact that the plan involves a contribution by the worker shall not prevent its validity if the plan has been approved in writing by the commissioner. An employer who makes any charge or deduction prohibited by this section is guilty of a misdemeanor. (4) DIRECT ACTIONS AGAINST INSURERS. If the employer insures the payment of the compensation provided by this chapter and according to the full benefits thereof and with full coverage under this chapter in a corporation or association authorized to do business in Alabama and approved by the commissioner, and if the employer posts a notice or notices in a conspicuous place or in conspicuous places about his or her place of employment, stating that he or she is insured and by whom insured; and if the employer files a copy of the notice with the Department of Insurance, then, and in such case, any civil actions brought by an injured employee or the employee’s dependent shall be brought directly against the insurer, and the employer, or insured, shall be released from any further liability. If the insurance company is insolvent or bankrupt, or if it cannot be reached by due diligence by process in this state, the employer shall not be released from liability under this chapter. Should any recovery be had in excess of the amount of the insurance carried, the employer shall be liable for the excess. The return of execution upon a judgment of an employee against an insurance company, unsatisfied in whole or in part, shall be conclusive evidence of the insolvency of the insurance company for the purposes of this chapter, and if the insurance company is adjudged to be bankrupt or insolvent by a court of competent jurisdiction, proceedings may be brought by the employee against the employer in the first instance or against the employer and the insurance company jointly or severally or in a pending proceeding against the insurance company, and the employer may be joined at any time after the adjudication. (g) Employer bill of rights - Penalty. (1) Every insurance carrier and self-insurer, individual and group, shall, on written request of the insured employer, provide the employer with a list of claims made against the employer. The information provided to the employer shall include amounts paid for closed claims and, if requested, details regarding the treatment and condition of the injured or disabled worker. The employer shall also receive notice of any proposed settlement of any claim against the employer if the employer so requests in writing. (2) In the event the court determines and makes a finding that a worker has filed a fraudulent claim for workers’ compensation benefits under this amendatory act, Section 25-5-11.1 shall not apply to the employer. In addition to the denial of workers’ compensation benefits under this amendatory act, the employer, upon such a finding that a worker has filed a fraudulent claim for workers’ compensation benefits under this amendatory act, may terminate the worker. (3) Failure to comply with subdivision (1) may subject the violator to a fine, upon hearing by a court, of not less than $25.00 nor more than $100.00.