08 SB425/AP
Senate
Bill 425
By:
Senator Grant of the 25th
AS PASSED
AS PASSED
AN
ACT
To amend Chapter 9 of Title 45 of the Official Code of Georgia Annotated, relating to insuring and indemnification, so as to amend certain provisions pertaining to providing insurance coverage by the commissioner of administrative services; to authorize the Department of Administrative Services to establish incentive programs including differential premium rates and deductibles based on loss histories of state agencies, institutions, and authorities, and such entities´ participation in loss control programs; to provide for definitions; to repeal provisions relating to employee operation of state motor vehicles; to amend Chapter 5 of Title 50 of the Official Code of Georgia Annotated, relating to the Department of Administrative Services, so as to authorize the commissioner of administrative services to establish incentive programs; to establish a return to work program; to provide for premiums, deductibles, and penalties for state entities; to amend Chapter 16 of Title 50 of the Official Code of Georgia Annotated, relating to public property, so as to authorize the Department of Administrative Services to establish incentive programs including differential premium rates and deductibles based on loss histories of state agencies, institutions, and authorities, and such entities´ participation in loss control programs; to amend Code Section 50-21-33, relating to liability insurance or self-insurance programs and additional coverages, so as to authorize the Department of Administrative Services to establish incentive programs including differential premium rates and deductibles based on loss histories of state agencies, institutions, and authorities, and such entities´ participation in loss control programs; to provide for the deposit of funds collected from state entities; to provide for related matters; to repeal conflicting laws; and for other purposes.
BE
IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION
1.
Chapter
9 of Title 45 of the Official Code of Georgia Annotated, relating to insuring
and indemnification, is amended by revising subsection (a) of Code Section
45-9-4, relating to the commissioner of administrative services purchasing
insurance or entering into indemnity contracts, as follows:
"(a)
When the commissioner of administrative services determines that an adequate
number of agencies, boards, bureaus, commissions, departments, or authorities of
this state have requested the commissioner to do so, the commissioner shall have
the authority to purchase policies of liability insurance, reinsurance, or
contracts of indemnity insuring or indemnifying the officers, officials, or
employees of such agencies, boards, bureaus, commissions, departments, or
authorities against personal liability for damages arising out of the
performance of their duties or in any way connected therewith, under a master
policy or on a blanket coverage basis with or without deductibles or excess
coverage. The commissioner may provide for endorsements for contractual
liability and, where necessary or convenient to the public functions of the
state, the commissioner may also provide for additional insureds. In such event,
the commissioner may alternatively retain all moneys paid to the Department of
Administrative Services as premiums on such policies of liability insurance or
contracts of indemnity, all moneys received as interest, and all moneys received
from other sources to set up and maintain a reserve fund for the payment of such
liability under, and the expenses necessary to administer properly, a
self-insurance program. If the commissioner decides to institute a
self-insurance program, the commissioner shall establish and maintain a reserve
fund for the payment of liabilities arising out of claims against officers,
officials, and employees of the state and for any additional insureds. The
commissioner shall also charge to state entities such premiums, deductibles, and
other payments taking into account any direct appropriations as shall be
necessary to maintain the soundness of the insurance or self-insurance programs
established under this Code section. The commissioner is further authorized to
establish incentive programs, including differential premium rates based on
participation in loss control programs established by the department, increased
or decreased deductibles based on participation in loss control programs
established by the department, and the imposition of fines and penalties. If
any premiums, deductibles, fines, or penalties are unpaid, the department is
authorized to deduct any unpaid amounts from the nonpaying agency´s or
authority´s continuation budget subject to the approval of the Office of
Planning and Budget and deposit those funds into the liability trust fund
provided for in this Code section. Any amounts held by the commissioner which
are available for investment shall be paid over to the Office of Treasury and
Fiscal Services. The director of the Office of Treasury and Fiscal Services
shall deposit such funds in a trust account for credit only to the
self-insurance program. The director of the Office of Treasury and Fiscal
Services shall invest these funds subject to the limitations of Code Section
50-5A-7 and Chapter 17 of Title 50. All income derived from such investments
shall accrue to the self-insurance program. When moneys are paid over to the
Office of Treasury and Fiscal Services, as provided in this subsection, the
commissioner shall submit an estimate of the date such funds shall no longer be
available for investment. When the commissioner wishes to withdraw funds from
the trust account provided for in this Code section, he or she shall submit a
request for such withdrawal, in writing, to the director of the Office of
Treasury and Fiscal Services."
SECTION
2.
Said
chapter is further amended by revising Code Section 45-9-4, relating to the
commissioner of administrative services purchasing insurance or entering into
indemnity contracts, by adding a new subsection as follows:
"(g)
The policy of insurance provided for in this Code section may also provide
liability coverage to nonprofit agencies and their employees, which agencies
have contracted with the Department of Juvenile Justice, the Department of
Transportation, or the Department of Human Resources to furnish certain
services; provided, however, that such liability coverage shall be limited to
damages arising out of the authorized use of a state-owned vehicle or a vehicle
funded pursuant to subsection (a) of Code Section 49-2-13.1 by an employee of
such nonprofit agency during the course of such person´s employment with
such nonprofit agency and the cost of such insurance furnished to any such
nonprofit agency and its employees shall be allocated to and paid by such agency
before any coverage shall be effective. For the purpose of this Code section,
'nonprofit agency' means any nonprofit or charitable organization, association,
corporation, partnership, or other entity registered pursuant to Section
501(c)(3) of the Internal Revenue Code."
SECTION
3.
Said
chapter is further amended by revising subsection (a) of Code Section 45-9-4.2,
relating to liability coverage for nonprofit agencies providing services to the
mentally retarded, as follows:
"(a)
For the purposes of this Code section, the term 'nonprofit agency' means a
nonprofit or charitable organization, association, corporation, partnership, or
other entity registered pursuant to Section 501(c)(3) of the Internal Revenue
Code."
SECTION
4.
Said
chapter is further amended by repealing Article 3, relating to the operation of
state motor vehicles by employees, and designating said article as
reserved.
SECTION
5.
Chapter
5 of Title 50 of the Official Code of Georgia Annotated, relating to the
Department of Administrative Services, is amended by revising Code Section
50-5-12, relating to the formulation of a self-insurance program for
workers´ compensation for state employees, as follows:
"50-5-12.
The
Department of Administrative Services shall formulate and initiate a sound
program of self-insurance for workers´ compensation benefits for all
employees of the state, including employees of authorities. In formulating the
self-insurance program, the department is directed to establish a return to work
program that promotes the return of an employee to employment by creating
transitional employment prior to full recovery by providing temporary
assignments for an employee that are meaningful and medically approved until the
employee can return to his or her regularly assigned duties. If an agency or
authority does not allow an employee to engage in transitional employment under
the return to work program, the number of authorized positions in the budget for
the agency or authority shall be decreased by the number of employees collecting
workers´ compensation not engaged in return to work employment for whom
return to work plans have been developed."
SECTION
6.
Said
chapter is further amended by revising Code Section 50-5-13, relating to the
extent, amounts, reserves, and excess coverage for a self-insurance program, as
follows:
"50-5-13.
The
department shall determine the amount and extent of self-insurance which the
state can assume, the necessary reserves needed, the premiums to be charged and
any deductibles to be paid by agencies and authorities, the amount of benefits
to be paid within the scope of the workers´ compensation statutes, and type
of addition or excess insurance coverage that may be required. The department
is further authorized to establish incentive programs including differential
premium rates based on participation in loss control programs established by the
department, increased or decreased deductibles based on participation in loss
control programs established by the department, and the imposition of fines and
penalties. If any premiums, deductibles, fines, or penalties are unpaid, the
department is authorized to deduct any unpaid amounts from the nonpaying
agency´s or authority´s continuation budget subject to the approval of
the Office of Planning and Budget and deposit those funds into the workers´
compensation trust fund provided for in Code
Section 50-5-14."
SECTION
7.
Said
chapter is further amended by revising subsection (b) of Code Section 50-5-16,
relating to liability insurance and self-insurance for state authorities, as
follows:
"(b)
State funds may be appropriated for the program, but the commissioner shall
charge such premiums, deductibles, and other payments as the commissioner
determines necessary or useful. The commissioner is further authorized to
establish incentive programs including differential premium rates based on
participation in loss control programs established by the department, increased
or decreased deductibles based on participation in loss control programs
established by the department, and the imposition of fines and penalties. If
any premiums, deductibles, fines, or penalties are unpaid, the department is
authorized to deduct any unpaid amounts from the nonpaying agency´s or
authority´s continuation budget subject to the approval of the Office of
Planning and Budget and deposit those funds into the reserve fund provided for
in this Code section. From the funds available to the commissioner, the
commissioner shall establish such reserves as the commissioner determines
necessary, purchase commercial policies, employ consultants, and otherwise
administer the program. Any amounts held by the liability insurance or
self-insurance funds which are available for investment shall be paid over to
the Office of Treasury and Fiscal Services. The director of the Office of
Treasury and Fiscal Services shall deposit such funds in trust accounts for
credit only to the liability insurance and self-insurance funds. The director
of the Office of Treasury and Fiscal Services shall invest the liability
insurance and self-insurance funds subject to the limitations of Code Section
50-5A-7 and Chapter 17 of this title. All income derived from such investments
shall accrue to the liability insurance and self-insurance funds. When moneys
are paid over to the Office of Treasury and Fiscal Services, as provided in this
Code section, the commissioner shall submit an estimate of the date such funds
shall no longer be available for investment. When the commissioner wishes to
withdraw funds from the trust account provided for in this Code section, he or
she shall submit a request for such withdrawal, in writing, to the director of
the Office of Treasury and Fiscal Services."
SECTION
8.
Said
chapter is further amended by revising paragraph (6) of Code Section 50-5-51,
relating to the power, authority, and duty of the Department of Administrative
Services, as follows:
"(6)
To procure all fidelity bonds covering state officials and employees required by
law or administrative directive to give such bonds; and, in order to provide the
bonds at a minimum expense to the state, the bonds may be procured under a
master policy or policies providing insurance agreements on a group or blanket
coverage basis with or without deductibles or excess coverage over the
state´s retention as determined by the commissioner. Fidelity bonds
covering state officials and employees which are procured pursuant to this
paragraph shall expressly provide that all state officials and employees who are
required by law to be bonded be named in the fidelity bond as insureds or
beneficiaries under the terms of the fidelity bond. Inclusion of any state
official, officer, or employee required by law or administrative directive to be
specifically bonded in a master fidelity bond under the terms of this part shall
satisfy any statutory requirement that the official, officer, or employee be
bonded. Fidelity bonds procured pursuant to this paragraph shall also expressly
provide for indemnification, out of the proceeds of the fidelity bonds, of all
state officials and employees for any liability or expense of any nature
resulting from a claim on the state official´s or employee´s bonds
which is due to or as a result of an act of a subordinate of the state official
or employee. In order to finance the continuing liability established with
other agencies of state government, the commissioner is authorized to retain all
moneys paid to the department as premiums on policies of insurance, all moneys
received as interest, and all moneys received from other sources to set up and
maintain a reserve for the payment of such liability and the expenses necessary
to administer properly the insurance program. The commissioner is further
authorized to establish incentive programs including differential premium rates
based on participation in loss control programs established by the department,
increased or decreased deductibles based on participation in loss control
programs established by the department, and the imposition of fines and
penalties. If any premiums, deductibles, fines, or penalties are unpaid, the
department is authorized to deduct any unpaid amounts from the nonpaying
agency´s or authority´s continuation budget subject to the approval of
the Office of Planning and Budget and deposit those funds into the reserve fund
provided for in this Code section. The commissioner shall invest the moneys in
the same manner as other such moneys in his or her
possession;"
SECTION
9.
Chapter
16 of Title 50 of the Official Code of Georgia Annotated, relating to public
property,
is amended by revising Code Section
50-16-9, relating to the formulation of a self-insurance plan for the
state´s properties, as follows:
"50-16-9.
(a)
The Department of Administrative Services may formulate and initiate a plan of
self-insurance for the state´s properties. The department shall
cause:
(1)
A complete appraisal to be made of all the state´s insurable property as to
value;
(2)
A complete classification to be made of all the state´s insurable property
by type of risk; and
(3)
A determination and recommendation to be made of the amount and extent of
self-insurance which the state can assume, the necessary reserves needed, the
minimum claim to be paid on each risk, the type of additional or excess
insurance coverage that may be required, the premiums to be charged, and any
deductibles to be paid by state agencies and authorities.
(b)
The department is further authorized to establish incentive programs, including
differential premium rates based on participation in loss control programs
established by the department, increased or decreased deductibles based on
participation in loss control programs established by the department, and the
imposition of fines and penalties. If any premiums, deductibles, fines, or
penalties are unpaid, the department is authorized to deduct any unpaid amounts
from the nonpaying agency´s or authority´s continuation budget subject
to the approval of the Office of Planning and Budget and deposit those funds
into the state insurance and hazard reserve fund provided for in this
chapter.
(c)
Upon the formulation of a plan of self-insurance based on the foregoing
determinations made and submitted by the Department of Administrative Services,
the Governor, by executive order, may establish and effectuate a plan of
self-insurance; and the General Assembly from time to time shall provide and
maintain by appropriation an insurance reserve fund."
SECTION
10.
Said
chapter is further amended by repealing Code Section 50-16-10, relating to the
formulation of a self-insurance plan for public school buildings, and
designating said Code section as reserved.
SECTION
11.
Said
chapter is further amended by revising Code Section 50-16-11, relating to
employment of personnel to carry out self-insurance plans, as
follows:
"50-16-11.
The
Department of Administrative Services is authorized and empowered to employ, as
a regular member of its staff, persons with expert knowledge, training, and
experience in underwriting and planning and such other personnel, including
temporary professional insurance engineers and actuaries, as are necessary to
carry out the details provided in Code Section 50-16-9."
SECTION
12.
Code
Section 50-21-33, relating to liability insurance or self-insurance programs and
additional coverages, is amended by revising subsection (d) as
follows:
"(d)
The Department of Administrative Services shall establish and charge to state
government entities such premiums, deductibles, and other payments, taking into
account any direct appropriations as shall be necessary to maintain the
soundness of the insurance or self-insurance programs established under this
Code section. The premiums and deductibles charged to each state government
entity may be established on such basis as the Department of Administrative
Services shall deem appropriate and such basis may include the number of
employees, the aggregate annual budget of the state government entity, and
unique exposures, loss history, or claims pending against such state government
entity. The department is further authorized to establish incentive programs
including but not limited to differential premium rates based on participation
in loss control programs established by the department, increased or decreased
deductibles based on participation in loss control programs established by the
department, and the imposition of fines and penalties. If any premiums,
deductibles, fines, or penalties are unpaid, the department is authorized to
deduct any unpaid amounts from the nonpaying agency´s or authority´s
continuation budget subject to the approval of the Office of Planning and Budget
and deposit those funds into the State Tort Claims Trust Fund provided for in
this Code section."
SECTION
13.
All
laws and parts of laws in conflict with this Act are repealed.