34:15-120.20. Plan of operation

6. a. (1) Within one year of the effective date of this act, the board of directors shall submit to the commissioner a proposed plan of operation for the fair, reasonable and equitable administration of the association and the fund. The plan of operation, and any amendments thereto, shall take effect upon approval in writing by the commissioner.

(2) If the board of directors fails to submit a plan within one year of the effective date of this act, or thereafter fails to submit any acceptable amendments to the plan, the commissioner shall promulgate the rules necessary to effectuate the provisions of this section. The rules shall continue in force until modified by the commissioner or superseded by a plan submitted by the board of directors and approved by the commissioner.

b. The plan of operation shall establish the programs necessary to protect against the insolvency of a member of the association and shall provide that the members of the association shall be responsible for maintaining an adequate fund to meet the obligations of insolvent members and other insolvent self-insurers provided for under this act and the board of directors is authorized to contract and employ those persons with the necessary expertise to carry out these stated purposes.

c. All member employers shall comply with the plan of operation.

d. The plan of operation shall:

(1) Establish the procedures whereby all the powers and duties of the association under sections 4 and 15 of this act will be performed.

(2) Establish procedures for handling assets of the association.

(3) Establish the amount and method of reimbursing members of the board of directors under section 3 of this act.

(4) Establish procedures and standards for determining the insolvency of member employers pursuant to the provisions of this act.

(5) Establish procedures by which claims may be filed with the association and establish acceptable forms of proof of covered claims. Notice of claims to the receiver or liquidator of the insolvent member shall be deemed notice to the association or its agent, and a list of those claims shall be submitted periodically to the association or similar organization in another state by the receiver or liquidator.

(6) Establish regular places and times for meetings of the board of directors.

(7) Establish procedures for records to be kept of all financial transactions of the association and its agents and the board of directors.

(8) Provide that any member employer aggrieved by any final action or decision of the association may appeal to the department within 30 days after the action or decision.

(9) Establish the procedures whereby recommendations of candidates for the board of directors shall be submitted to the commissioner.

(10) Contain additional provisions necessary or proper for the execution of the powers and duties of the association.

e. The plan of operation may provide that any or all of the powers and duties of the association, except those specified under paragraphs (1), (2) and (4) of subsection d. of this section, be delegated to a corporation, association, or other organization which performs or will perform functions similar to those of this association or its equivalent in two or more states. Such a corporation, association, or organization shall be reimbursed as a servicing facility would be reimbursed and shall be paid for its performance of any other functions of the association. A delegation of powers or duties under this subsection shall take effect only with the approval of both the board of directors and the commissioner and may be made only to a corporation, association, or organization which extends protection which is not substantially less favorable and effective than the protection provided by this act.

L.1993,c.107,s.6.