A. Each certified self-insurer shall contribute to a fund to be known as the "self-insurers' guarantee fund". The fund shall be used as a last resort to provide benefits to workers and the families of workers of self-insurers who become insolvent and otherwise unable to meet their financial obligations. The board shall determine, subject to approval by the director, when payments may be made from the fund and when a self-insurer becomes insolvent and otherwise unable to meet his financial obligations.

B. At the time of the initial certification, each self-insurer shall deposit in the fund an amount equal to one percent of his paid losses for the immediately preceding year or an average of the preceding three years' New Mexico paid losses, whichever is less or, in the event the self-insurer has no previous experience, an amount to be determined by the board and approved by the director.

C. After the initial contribution, each certified self-insurer shall continue to make an annual contribution, based on one percent of the previous year's paid losses, for two more years. After three years of consecutive contributions, a certified self-insurer shall no longer be required to pay additional contributions to the fund unless:

(1) the director determines that, due to the insolvency of a member of the fund, an additional assessment is necessary to make the fund actuarially sound; or

(2) the board determines the need for any special assessment to ensure the financial stability of the fund.

D. If, at any time, the fund account balance of the self-insurer exceeds one hundred fifty percent, as calculated in Subsection C of this section, the amount in excess of one hundred fifty percent shall be refunded to the insurer.

E. In computing the account balance due, a self-insurer shall be credited with past contributions, including interest earned on those contributions.

F. Each self-insurer may be required to contribute additional amounts, as determined by the board and approved by the director, to maintain the financial stability of the fund. The board shall review at least annually the fund account balance and shall assess members as appropriate to maintain an adequate fund balance. Catastrophic losses shall be accounted for by a special assessment on members as determined by the board and approved by the director.

G. The assets of the fund are the sole property of the fund; they are not the property of the self-insurers who contribute to the fund.

H. The fund shall be maintained at one or more New Mexico financial institutions as determined by the board. The fund shall not be considered public money.

History: Laws 1990 (2nd S.S.), ch. 2, § 115.

Effective dates. — Laws 1990 (2nd S.S.), ch. 2, § 153 made Laws 1990 (2nd S.S.), ch. 2, § 115 effective January 1, 1991.