2017/18 Workers Compensation Program - Memorandum of CoverageMemorandum of Coverage - Primary Workers' Compensation and
Employer's Liability
Issued to the «Agency»
Effective July 1, 2017 — July 1, 2018
Administered by the California Joint Powers Insurance Authority
I' CLLLLNCk
INNOVATION
TEAMWORK
Effective July 1, 2016 — July 1, 2017, as a joint protection program authorized pursuant to
Article 11(a) of the California RIA joint powers agreement
CALIFURNIA
PrnMeling Irmo vatri ve JRiA hfanggeniv t1,5'r,lurirrr s For Our Public R ruc , Parr ntws I . V . I - A
COVER PAGE
MEMORANDUM OF PRIMARY WORKERS' COMPENSATION AND
EMPLOYER'S
LIABILITY COVERAGE
FOR THE
CALIFORNIA JOINT POWERS INSURANCE AUTHORITY
MEMBER: «Member Name»
MAILING ADDRESS: «Member Address»
«City», «State» «Zip»
PROTECTION LIMITS:
Workers' Compensation: Statutory
Employer's Liability: $10,000,000 per occurrence
PROTECTION PERIOD: From July 1, 2017 at 12:01 a.m. Pacific Time until July 1,
2018 at 12:01 a.m. Pacific Time.
This Memorandum is a description of the terms and conditions of the Program through which
certain specified and limited self -insured risks of liability are administered by the Authority and
shared by its Members. This Memorandum is not an insurance policy. As provided in Section
990.8 of the California Government Code and appellate court cases of Orange County Water
District v. Association of California Water Agencies JPIA (1997) and City of South El Monte v.
Southern California Joint Powers Insurance Authority (1995), the pooling of self -insured claims
or losses among the Members of the Authority shall not be considered insurance nor be subject to
regulation under the Insurance Code.
California JPIA
By
President
ii
TABLE OF CONTENTS
1. INTRODUCTION
2. COVERAGE
A. Workers' Compensation
B. Employer's Liability
C. Other Coverages
3. DEFINITIONS
4. EXCL USIONS
5. CONDITIONS AND RESPONSIBILITIES
1
2
2
3
6
6
8
9
ii
MEMORANDUM OF PRIMARY WORKERS' COMPENSATION
AND EMPLOYER'S LIABILITY
COVERAGE
for the
CALIFORNIA JOINT POWERS INSURANCE AUTHORITY
1. INTRODUCTION
This Memorandum is a description of the terms and conditions of the Program through
which certain self -insured risks of workers' compensation and employer's liability are
administered by the Authority and shared by its Members pursuant to the Joint Powers
Agreement creating the Authority under the provisions of §6500 et seq. of the
Government Code.
As provided in §990.8 of the Government Code, pooling of losses in this Program is not
insurance. The sole duty of the Authority is to administer the Program adopted by the
Members. The Authority will pay on behalf of members the liability only for Claims or
losses which are pooled under the terms of this Memorandum and the Joint Powers
Agreement.
The provisions of the Program are subject to and subordinated to the Joint Powers
Agreement or any action taken by the Executive Committee or the Board of Directors in
connection with the Program. This Program has been adopted pursuant to action taken
by the Executive Committee, and is subject to any amendment, modification or extension
by the Executive Committee or the Board of Directors at a regular meeting or at a special
meeting called for that purpose.
The terms of this Memorandum shall be construed in an evenhanded fashion in
accordance with the principles of California contract law. If the language of this
Memorandum is alleged to be ambiguous or unclear, the issue of how the protection
should apply shall be resolved in a manner most consistent with the relevant terms of this
Memorandum without regard to authorship of the language and without any
presumption of arbitrary interpretation or construction in favor of either the Member or
the Authority. Any controversy or dispute arising out of or related to an interpretation or
breach of this Memorandum shall be settled in accordance with the appeals procedures
as set forth in this Memorandum.
Throughout this Memorandum, words and phrases that appear in bold print are defined
in 3. Definitions.
Memorandum of Workers' Compensation
and Employer's Liability Coverage Page 1 of 15 July 1, 2017 — July 1, 2018
2. COVERAGE
In consideration for Member's payment of the required primary deposit for participation
in this Program, and subject to all terms and conditions set forth in this Memorandum,
the Program agrees to provide the following protection:
A. Workers' Compensation
The Program will pay on behalf of the Member workers' compensation benefits
for bodily injury by accident or occupational disease, including resulting death,
deemed compensable under the laws of the State of California, and sustained by
an Employee. Such payments, including any settlements, shall be made at the
Authority's sole discretion.
The Program will provide for the administration and defense of Claims for
workers' compensation benefits, including investigation, payment of benefits,
compliance with reporting requirements for Claims administration, and
settlement. The Program, at its discretion, will choose and manage service
providers necessary to fulfill its objectives; including third party Claims
administrators, medical management providers, defense attorneys, investigators,
etc.
Coverage is subject to the following conditions:
Bodily injury by accident must arise out of and in the course of
employment by the Member and must occur during the Protection
Period.
2. Occupational disease must be caused by or aggravated by the conditions
of employment, and the exposure must occur during the Protection
Period.
3. Bodily injury or occupational disease from presumptive causations
contained in Labor Code §3212 et seq. or other California governmental
codes must occur during the Protection Period.
4. Coverage is limited to amounts the Member is legally liable to pay after
apportionment to pre-existing, concurrent or subsequent injuries or
illnesses as defined by law.
5. The Program will pay temporary disability, permanent disability and
death benefits at the statutory rates defined in the California Labor Code
(Labor Code Division 4, Part 2, Chapter 2, Articles 3, 4, 4.5 and 5). If the
Member pays the Employee for periods of temporary disability per a
salary continuation plan under a collective bargaining agreement,
Memorandum of Workers' Compensation
and Employer's Liability Coverage Page 2 of 15 July 1, 2017 — July 1, 2018
memorandum of understanding or other employment agreement, the
Program will reimburse the Member at the statutory temporary disability
benefit rate for those periods paid by the Member.
6. If the Employee is eligible to receive salary continuation in lieu of
temporary disability under Labor Code §4850 et seq., the Program will
reimburse the Member at the statutory rate for temporary disability
benefits that the Member would be obligated to pay if Labor Code §4850
et seq. did not apply.
7. Employees on temporary assignment or traveling for Member business
outside the State of California who sustain an injury or occupational
disease are covered for benefits under this Program. Benefits will be paid
on behalf of the Member up to the amount payable under the workers'
compensation laws of the State of California, regardless of the jurisdiction
selected by the Employee.
B. Employer's Liability
The Program will indemnify the Member, where permitted by law, for Loss
arising from bodily injury or occupational disease, including resulting death.
Coverage is subject to the following conditions:
(a). Bodily injury by accident must arise out of and in the course of
employment by the Member. Occupational disease must be caused
by or aggravated by the conditions of employment. The accident
or period of exposure must occur during the Protection Period.
Bodily injury does not include emotional distress, anxiety,
discomfort, inconvenience, depression, dissatisfaction or shock to
the nervous system, unless caused by either a manifest physical
injury or a disease with physical dysfunction or condition resulting
in treatment by a licensed physician or surgeon.
(b). Bodily injury or occupational disease suffered by Employee is not
covered by workers' compensation law.
(c). The Employee's duties are necessary or incidental to work
conducted by the Member.
(d). The Member timely and fully pursues all available remedies for
contribution or indemnification from any and all other available
sources.
Memorandum of Workers' Compensation
and Employer's Liability Coverage Page 3 of 15 July 1, 2017 — July 1, 2018
(e). The original Claim or Suit and related legal actions for damages
are brought in the State of California or under the laws of the State
of California.
2. Subject to the foregoing provision of B. Emblover's Liabilitv, the
Program shall:
(a). Indemnify the Member for all sums legally payable as damages
under this section. Damages include:
i. Amounts for which the Member is liable to a third party by
reason of a Claim, Suit or proceeding against the Member
to recover damages suffered by the third party; or
ii. Damages for care and loss of services of an injured
employee of the Member; or
iii. Damages for consequential bodily injury to a spouse, child,
parent, or sibling of the Employee, provided that such
damages are the direct consequence of injury or disease
arising out of and in the course of the Employee's
employment by Member.
iv. Injury or disease to an Employee arising out of and in the
course of employment, claimed against the Member in a
capacity other than as Employer.
V. Such payments, including any settlements, shall be made at
the Authority's sole discretion.
(b). Defend, at the Program's expense, any Claim, proceeding or Suit
against the Member for damages payable under this section. The
Program has the right to investigate and settle these Claims,
proceedings and Suits. The Program has no duty to defend any
Claim, proceeding or Suit that is not covered by this Program.
The Program has no duty to defend or continue defending after
the Program has paid its maximum amount of coverage.
(c). Pay the following costs, in addition to the other amounts payable
under this section, as part of any Claim, proceeding or Suit the
Program defends:
i. Reasonable expenses incurred at the Program's expense,
but not loss of earnings;
Memorandum of Workers' Compensation
and Employer's Liability Coverage Page 4 of 15 July 1, 2017 — July 1, 2018
ii. Premiums for bonds to release attachments and for appeal
bonds in bond amounts up to twice the maximum amount
of coverage under this Program;
iii. Litigation costs taxed against the Member;
iv. Interest on a judgment as required by law; and
V. Other expenses incurred by the Program in discharging the
obligation of the Program or its members under this
section.
3. The following are excluded from coverage under this section:
(a). Damages arising out of the actual or alleged discharge; coercion;
criticism; demotion; evaluation; reassignment; discipline;
defamation; harassment; humiliation; discrimination against;
termination of; wrongful dismissal or discharge; breach of any oral
or written employment contract or quasi -employment contract;
misrepresentation; violation of employment discrimination laws;
workplace sexual or other harassment; wrongful failure to employ
or promote; wrongful discipline; negligent evaluation; wrongful
demotion; wrongful deprivation of a career opportunity;
employment -related invasion of privacy, defamation or wrongful
infliction of emotional distress; or any other personnel practices,
policies, acts or omissions, of any Employee, including Claims
brought under Americans with Disabilities Act, Family Medical
Leave Act, Pregnancy Disability Leave Act, Equal Opportunities
Act, Fair Employment and Housing Act, Fair Labor Standards Act;
or any other such State or Federal act;
(b). Any obligation of any type that is imposed by a workers'
compensation, occupational disease, unemployment compensation,
occupational health and safety law, or disability benefits law, or
any similar law;
(c). Damages for any injury or disease for any Employee engaged in
work subject to the Longshore and Harbor Workers' Compensation
Act, the Outer Continental Shelf Lands Act, the Defense Base Act,
the Jones Act, the Federal Employers Liability Act, or any other
Federal workers' compensation or occupational disease law, or any
international workers' compensation law;
(d). Punitive or exemplary damages, however characterized, or
damages, fines or penalties imposed under the Migrant and
Seasonal Agricultural Worker Protection Act, or for violation of
Memorandum of Workers' Compensation
and Employer's Liability Coverage Page 5 of 15 July 1, 2017 — July 1, 2018
any other Federal, state, county or other law, regulation or
ordinance;
C. Other Coverages
Defense of Serious & Willful Misconduct Allegation (Labor Code §4553)
or Alleged Discrimination Prohibited by Labor Code § 132a.
The Authority may, at its own discretion, elect to defend a Member
against Claims alleging Serious & Willful Misconduct or a violation of
§ 132a. Such defense will be provided by an attorney assigned by the
Authority. Any penalties awarded for Serious & Willful Misconduct or
violation of § 132a will be the responsibility of the Member. The
Member may elect to defend itself with counsel of its own choosing, at its
own expense.
3. DEFINITIONS
A. Authority means the California Joint Powers Insurance Authority.
B. Bodily Injury means bodily injury, sickness, or disease sustained by any person,
including death resulting from any of these at any time.
C. Claim means a notice, demand, or Suit against a Member to recover Damages.
Claim does not include an administrative claim filed with the Equal Opportunity
Employment Commission or the California Department of Fair Employment and
Housing or any other administrative or regulatory agency.
D. Damages means compensation in money recovered by a party for loss or
detriment it has suffered. Damages does not include defense of Claims or any
punitive, exemplary or multiplied damages or non -monetary relief or redress or
injunctive relief.
E. Defense Costs means all fees and expenses incurred in connection with the
administration, investigation, defense, and appeal of a Claim covered hereunder,
including attorney fees, court costs, premiums for appeal bonds, and interest on
judgments accruing after the entry of judgment, and also shall include the costs of
any Claims administrator or defense counsel assigned by the Authority to
respond to any Claim on behalf of the Authority. Defense Costs shall not
include the office expenses of the Member, nor the salaries of employees or
officials of the Member, nor expenses of any Claims administrator engaged by
the Member. Defense Costs also do not include any fee or expense relating to
coverage issues between the Authority and any Member.
Memorandum of Workers' Compensation
and Employer's Liability Coverage Page 6 of 15 July 1, 2017 — July 1, 2018
F. Discrimination means injury caused by or arising out of:
Unlawful discrimination because of race, sex, color, age, religion, or
national origin, or membership in any similarly legally protected class; or
2. Violation of the discrimination prohibitions of the Americans with
Disabilities Act of 1990, any rules or regulations promulgated thereunder
and amendments thereto or similar provisions of any Federal, state, or
local statutory law or common law.
G. Employee includes any person falling within the definition of "employee" under
Labor Code Division 4, Chapter 2, Article 2, beginning with §3351. Volunteers
are considered employees under this Memorandum only if the Member has a
resolution in effect, and passed prior to the date of injury or illness at issue,
providing workers' compensation coverage to volunteers under Labor Code
§3363.5, and while performing specific functions in the course and scope of
authorized activities under the direction and control of the Member.
H. Loss means amounts actually paid by the Program for statutory workers'
compensation benefits, employer's liability Claims and allocated costs for
investigation, administration and defense of Claims under this Memorandum of
Coverage.
I. Member means the entity, including all of its departments and constituent
agencies, which has adopted a resolution to participate in the Program and
become a signatory to the Joint Powers Agreement creating the Authority as may
be amended from time to time, whose name appears on the Cover Page of this
Memorandum. Member includes any other agency for which the Member's
governing board or council acts as the governing board, and also includes any
commissions, agencies, districts, authorities, redevelopment agencies, boards, or
similar entities coming under the Member's direction and control. Member shall
include any other agency authorized by the Authority's Board of Directors. The
Member must be approved for self-insurance by the Office of Self Insurance
Plans and maintain its qualification for self-insurance during the Protection
Period.
J. Memorandum means this Memorandum of Workers' Compensation and
Employer's Liability Coverage authorized by the Joint Powers Agreement of the
Authority specifying the terms and conditions of the Program.
K. Occurrence means a single accident or event causing bodily injury to one or
more employees; or occupational disease sustained by one or more employees as
a result of an outbreak of the same communicable disease, or sudden and
accidental exposure to the same environmental hazard.
Memorandum of Workers' Compensation
and Employer's Liability Coverage Page 7 of 15 July 1, 2017 — July 1, 2018
L. Program means the California Joint Powers Insurance Authority's Workers'
Compensation and Employer's Liability Program described by this
Memorandum and the Agreement of the Members creating the Authority. The
Program is a fund created by the Members for the purpose of pooling self -
insured losses.
M. Protection Period means the time period shown on the Cover Page of this
Memorandum.
N. Suit means a civil proceeding in which a Member is named as a defendant or
cross -defendant, or an arbitration proceeding or alternative -dispute resolution
proceeding to which a Member submits with the Authority's written consent.
4. EXCLUSIONS
This Memorandum, including any obligation to indemnify, defend or pay Defense
Costs, does not apply to:
A. The Member's obligation to pay salary in lieu of temporary disability benefits
under Labor Code §4850, except to the extent that the Member would be
obligated to pay temporary disability benefits in the absence of the mandate of
§4850.
B. The Member's obligations under Labor Code §4856 to provide health benefits.
C. Injury or disease to an Employee while knowingly employed in violation of law;
D. Injury or disease intentionally caused or aggravated by or at the direction of the
Member;
E. Penalties or fines imposed for violation of Labor Code 132a or Labor Code §4553
(Serious & Willful Misconduct);
F. Penalties or self-imposed benefit increases for violations of Labor Code §5814 et
seq. attributable to the Member's actions;
G. Damages arising out of, or in any way related to, operations with respect to which
the Member:
has violated or failed to comply with any workers' compensation law, or
any provision thereof, or
2. has rejected any workers' compensation law.
Memorandum of Workers' Compensation
and Employer's Liability Coverage Page 8 of 15 July 1, 2017 — July 1, 2018
H. Any Claim, Suit, liability, or alleged liability for punitive or exemplary damages
or fines or other damages imposed primarily for the sake of example and by way
of punishing the Member, including liability of a Member to defend or pay
damages where the governing body thereof has elected to provide a defense or
pay damages for a Claim, action or judgment for punitive or exemplary damages.
I. Any liability for which the Member is obligated to pay damages by reason of
liability assumed in a contract or agreement.
5. CONDITIONS AND RESPONSIBILITIES
A. General Obligations
The Member agrees to abide by all employment, equal opportunity, anti-
discrimination, health and safety laws, statutes and regulations. It understands
that, among other obligations, it has a non -delegable duty to provide employees
with a safe place to work, and training in safe work practices. The Member
agrees to abide by all applicable wage and hour laws, collective bargaining
agreements, memoranda of understanding, and other statutes and regulations
regarding working conditions.
The Member agrees to immediately report every occupational injury or illness
which results in medical treatment, or any claim by an Employee for workers'
compensation benefits, to the Authority or the Authority's designated
administrator, but in no instance to cause the delay of such report of injury, illness
or claim more than five days after date of knowledge or as otherwise required by
Labor Code §6409.1. The Member agrees to give every employee a claim form
pursuant to Labor Code 5401 within one working day of receiving notice or
knowledge of a claim or potential claim. In the event of an injury or illness, the
Member agrees to provide first aid or arrange for appropriate immediate medical
care. The Member agrees to provide suitable temporary modified or alternate
duty whenever possible for employees with workers' compensation injuries, and
agrees to conduct interactive accommodation meetings as required by AB 2222.
B. Inspection and Audit
The Authority shall be permitted but not obligated to inspect the Member's
records, property and operations at any time. Neither the Authority's right to
make inspections, nor the making thereof, nor any report hereon shall constitute
an undertaking, on behalf of or for the benefit of the Member or others, to
determine or warrant that such property or operations are safe or healthful, or are
in compliance with any law, rule or regulations. The Authority may examine and
audit the Member's books and records at any time during the Protection Period
Memorandum of Workers' Compensation
and Employer's Liability Coverage Page 9 of 15 July 1, 2017 — July 1, 2018
and extensions thereof, and within three years after the final termination of this
Program, as far as they relate to the subject matter of this Memorandum.
C. Member's Duties in the Event of Occurrence, Claim or Suit
In the event of any Occurrence, written notice containing particulars
sufficient to identify the Member and also reasonably obtainable
information with respect to the time, place, and circumstances thereof, and
the names and addresses of the injured and of available witnesses, shall be
given by or for the Member to the Authority's claims administrator as
soon as practicable, but no later than required by statute or regulation.
2. If a Claim is made against a Member, the Member shall immediately
forward to the Authority's claims Administrator every demand, notice,
summons or other process received by the Member or the Member's
representative.
3. The Authority's claims Administrator will review the Claim, and under
the direction of the Authority, undertake the administration of the Claim,
including investigation, defense and settlement, as appropriate.
4. The Member shall cooperate with the Authority and, upon the
Authority's request, assist as appropriate in the resolution of the Claim,
including enforcing any right of contribution or indemnity against any
person or organization who may be liable to the Member because of
injury or damage to an Employee or Member property. The Member
shall not voluntarily make any payment, assume any obligation or incur
any expense.
D. Privacy and Confidentiality of Claim Records
All Claim records, including Claim files, examiners notes, medical reports,
subpoenaed records, correspondence, tapes and films, and whether electronic or
hard files, are the property of the Authority. Because these records may contain
confidential or private medical and/or psychological information related to
workers' compensation Claims administered by or on behalf of the Authority,
access to Claim files and the information contained therein is restricted to the
Authority and its agents and assignees, with the exception that the Member is
entitled to medical information limited to the diagnosis of the mental or physical
condition for which workers' compensation is being claimed and the treatment
provided for this condition, or what is necessary for the Member to have in order
to provide temporary or permanent modification or accommodation of the
employee's work duties.
E. Change in conditions
Memorandum of Workers' Compensation
and Employer's Liability Coverage Page 10 of 15 July 1, 2017 — July 1, 2018
If a Member experiences a significant change in operations or conditions, the
Member shall notify the Authority as soon as practicable, and the Authority has
the right to an underwriting review and to collect additional primary deposits as
may be appropriate to reflect the added exposure to the Program. The additional
primary deposit must be paid within ninety days of notice.
F. Other Protection
If collectible insurance or any other coverage or protection with any insurer, self -
insured employer, joint powers authority or any other source, is available to the
Member covering a loss also protected hereunder (whether on a primary, excess
or contingent basis), the protection hereunder (including any Defense obligation)
shall be in excess of, and shall not contribute with, such insurance or other
coverage or protection, provided that this clause does not apply with respect to
any insurance purchased by a Member specifically to be in excess of this
Memorandum. Under no circumstances shall the protection afforded by this
Program be considered primary, pro rata, concurrent or co -existent with such
insurance, coverage, or other protection.
G. Termination or Amendment
This Memorandum may be terminated or amended at any time in accordance
with the Joint Powers Agreement and Bylaws of the Authority.
H. Changes to Memorandum
Notice to any agent or knowledge possessed by any agent of the Authority or by
any other person shall not effect a waiver of or a change in any part of this
Memorandum, nor shall the terms of this Memorandum be waived or changed,
except by a written addendum issued by the Authority to form a part of this
Memorandum.
Subrogation and Recovery
The Authority shall be subrogated to the extent of any payment hereunder to all
the Member's rights of recovery thereof. This section applies to all recoveries
from third parties or governmental agencies, including recoveries for state
mandate reimbursements pursuant to SB 90 or other statute or regulation.
The Member shall do nothing after loss to prejudice such rights and shall do
everything necessary to secure such rights. The Authority shall have standing to
seek subrogation recovery in its own name or in the name of the Member, and
the Member shall cooperate with and assist the Authority in pursuing such
recovery, including assigning its right to recover subrogated amounts, and if
Memorandum of Workers' Compensation
and Employer's Liability Coverage Page 11 of 15 July 1, 2017 — July 1, 2018
necessary, executing a written agreement to effect such assignment. Any amount
so recovered shall be credited to the workers' compensation file.
Assignment
There is no assignment of interest permitted under this Memorandum.
K. Joint Powers Agreement
The provisions of this Memorandum are subject to and subordinate to the terms
and provisions of the Agreement creating the Authority, and in the event of any
conflict between the terms and provisions of said Agreement and this
Memorandum, the terms and provisions of the Agreement shall control.
L. Appeal of Disputes
Should a dispute arise between the Member and the Program, the following
conditions will apply:
No party is entitled to appeal or arbitrate Claims under this Memorandum
other than the Member.
2. Any disputes concerning coverage, protection, Defense obligations, or
procedures of the Program, as interpreted by the Authority's staff, shall
be appealed to the Authority's Executive Committee in accordance with
the following procedures.
3. A Member may request any determination of a lack of coverage made by
the Authority to be reviewed by the Chief Executive Officer. Such a
request shall be in writing and must be made within 90 days of the date of
notice from the Claims Administrator.
4. Upon request, the Chief Executive Officer shall review a determination of
a lack of coverage made by the Claims Administrator or Authority staff
and shall send to the Member a written determination of coverage.
5. If a Member disagrees with the coverage determination by the Chief
Executive Officer, the Member may appeal the decision to the Appeals
Committee. The Appeals Committee consists of the Executive Committee
and the chairs of the Managers and Finance Officers Committees.
Appeals must be in writing within 90 days of the date of the Executive
Director's written decision. The appeal request must state why the
Member disagrees with the denial, and the Member should present any
information that may have a bearing on the ultimate determination of
coverage.
Memorandum of Workers' Compensation
and Employer's Liability Coverage Page 12 of 15 July 1, 2017 — July 1, 2018
6. The appeal request shall be presented by Authority staff to the Appeals
Committee, on a regularly scheduled Executive Committee meeting day,
allowing time for sufficient review and agenda deadlines. Staff shall
notify the Member in advance of the meeting at which its appeal will be
presented.
7. If the Member would like to personally address the Appeals Committee,
the Member or the Member's representative may attend the meeting and
speak to the issue.
8. The Appeals Committee may refer the appeal to the Coverage Committee
and consider the recommendation of the Coverage Committee during its
deliberation on the appeal. The Appeals Committee's decision is final.
Authority staff will notify the Member of the Appeals Committee's
decision in writing.
9. Following a final determination regarding a Claim, consideration of the
decision may be reopened at the request of the Member if circumstances
change as follows: (1) a new and distinct Claim arising out of the prior
occurrence is presented to the Member, or (2) new and distinct causes of
action are added to the Claim. If the new Claim or causes of action are
reasonably thought by the Member to be covered, the Appeals Committee
will reconsider the issue, in accordance with the procedure in section,
upon request. Any request for such reconsideration must be in writing
within 90 days of the notice to the Member of the new Claim or cause of
action.
10. If a Member disputes a coverage issue, then, during the course of the
administrative and arbitration proceedings provided herein, the Authority
shall defend the Claim against the Member and have the right to control
any settlement of that Claim, subject to the right of the Authority to
recover from the Member any amounts paid out by the Authority for
such defense or settlement which are finally determined by the Appeals
Committee, or as a result of the Binding Arbitration Process, not to be
owed by the Authority under the Program.
M. Arbitration
If the Member has followed the coverage Appeals Procedure outlined in 5. L.
Appeal of Disputes and disagrees with the final determination of the Appeals
Committee, the Member may request consideration of the coverage issue through
the Authority's binding arbitration process.
Memorandum of Workers' Compensation
and Employer's Liability Coverage Page 13 of 15 July 1, 2017 — July 1, 2018
The Arbitration process shall be as follows:
Following a decision by the Appeals Committee, the appealing Member
shall notify the Chief Executive Officer in writing, within thirty days of
the Appeals Committee's final decision, that it wishes to participate in
Binding Arbitration and shall submit a non-refundable $1,000 arbitration
appeal fee. The written notice shall specify the grounds for the arbitration.
2. Following payment of the arbitration appeals fee, the name of each
Member, other than the appealing Member and the Members
represented on the Appeals Committee, shall be placed in an unmarked
envelope. Each envelope shall be placed in a box and eleven envelopes
shall be drawn by the Chief Executive Officer. A representative of the
appealing Member may be present at the drawing.
3. The managers of the eleven Members shall be the pool of potential
arbitrators. The eleven Members and the names of their managers shall
be given in writing to the appealing Member.
4. The appealing Member shall have the right to strike two or less names
from the pool for any reason which shall not be disclosed. The Authority
shall have the right to strike two or less names from the pool for any
reason which shall not be disclosed. The appealing Member and the
Authority must strike names within five business days of the drawing.
The right of either party to strike names shall lapse at 5:00 PM on the fifth
business day following the drawing. Notice of names stricken by either
party shall be given in writing to the other party prior to 5:00 PM on the
fifth day following the drawing.
5. The remaining managers shall be contacted by the Chief Executive Officer
to determine their willingness to serve on the arbitration panel. If more
than five are willing to serve, each name shall be placed in an unmarked
envelope, put in a box, and the Chief Executive Officer shall draw five
envelopes from the box. The individuals whose names are drawn shall be
the arbitration panel and they shall be disclosed in writing to the appealing
Member.
6. If only five are willing to serve, they shall be the arbitration panel.
7. If fewer than five are willing to serve, the name of each Member not
drawn in the previous selection drawing shall be placed in an unmarked
envelope, put in a box, and four envelopes shall be drawn for each
arbitration panel position needed to complete a five -Member panel. A
representative of the appealing Member may be present at the drawing.
The names drawn shall be disclosed to the appealing Member who may
reject, for any reason which shall not be disclosed, one name for each four
Memorandum of Workers' Compensation
and Employer's Liability Coverage Page 14 of 15 July 1, 2017 — July 1, 2018
names drawn. The Authority may also reject one name for each four
names drawn and shall not disclose the reason. Names rejected by the
appealing Member and the Authority must be rejected within 48 hours of
the drawing. The right to reject names shall lapse 48 hours following the
drawing.
8. The managers or chief executive officers of the Members remaining shall
be contacted by the Chief Executive Officer to determine their willingness
to serve on the arbitration panel. The names of those willing to serve shall
be placed in unmarked envelopes, put in a box, and the number necessary
to fill out the arbitration panel shall be drawn by the Chief Executive
Officer and disclosed in writing to the appealing Member. A
representative of the appealing Member may be present at the drawing.
9. This process shall be repeated until five Members are obtained for the
arbitration panel.
10. The arbitration panel Members shall be compensated at the rate of $125
per half -day or portion thereof. If a panel Member is required to stay
away from home overnight, lodging shall be paid by the Authority.
Necessary meals shall be provided for all panel Members. Mileage costs
shall be reimbursed by the Authority at its standard rate.
11. The cost of the arbitration panel shall be borne by the Authority. The
cost of presentation by the appealing Member, including preparation,
exhibits, attorneys, and all other costs of the Member shall be paid by the
Member.
12. The arbitration panel may request legal counsel that shall be selected by
the Chief Executive Officer and paid for by the Authority. Legal counsel
shall not be the counsel for the Authority that has advised the staff and
Executive Committee. However, counsel for the Authority may
participate in or make the presentation to the arbitration panel on behalf of
the Authority, as requested by the Chief Executive Officer.
13. The parties to the arbitration shall not be governed by formal rules of
evidence.
14. The arbitration panel's decision shall be final and binding on the Member
and the Authority. Decisions of the arbitration panel shall be by majority
vote.
15. The decision of the arbitration panel shall be written and shall govern the
issue decided but may be referred to by the Authority and future
arbitration panels for precedent.
Memorandum of Workers' Compensation
and Employer's Liability Coverage Page 15 of 15 July 1, 2017 — July 1, 2018