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Mission: The association was established in 1986 by the north carolina general assembly and is authorized under article 4, chapter 97 of the north carolina general statutes and is a tax exempt unincorporated legal entity that provides the mechanism for the payment of workers' compensation claims against insolvent member self-insurers. Individual member self-insurers reported outstanding liabilities of approx. $343,873,000 for purposes of the 2017-2018 association aggregate security system (aass). Member self-insurers are defined by north carolina law as individual employers or groups of two or more employers that have pooled their liabilities under applicable insurance law and have been licensed by the north carolina department of insurance. All licensed individual and group self-insurers must demonstrate the requisite financial strength to secure their respective workers' compensation obligations and are required by statute to be members of the association. Individual self-insurers must partic
Programs: Pursuant to the 2006 and 2011 statutory amendments, the association expanded its program services to include the purchase of financial guarantees, reinsurance or other instruments to collectively secure all outstanding individual member self-insurer workers' compensation liabilities according to actuarial reports provided by each member self insurer. The association, through its statutory mandate, may implement the aass on an annual basis. This alternative security program provides for a portfolio based security system which replaced individual statutory deposits covering member self-insurer workers' compensation liabilities, required as a condition of being a licensed self-insurer. The alternative security program may use a combination of the security fund, financial guarantees, or other instruments purchased by the association. As of december 31, 2017, the association had coverage through a three-year insurance policy which covered all participating member self-insurers in the aass as of december 1, 2016. The annual costs of the aass include the financial instruments as well as design and implementation which are paid from the aass assessments of individual self-insurers that are deemed eligible to participate in the aass by the association board of directors. Aass assessments are based on the credit worthiness and pro-rata share of the aggregate workers' compensation claims liability of the individual self-insurers. The association is authorized to monitor and assess the financial condition of all individual member self-insurers that participate in the aass. Although group self-insurers do not participate in the aass, the association also serves as the statutory safety net for group self-insurers. Accordingly, group self-insurers pay a separate assessment to the association.
upon the insolvency of a member self-insurer, the association works in concert with the north carolina department of insurance, investigates and participates in bankruptcy proceedings, and works with corporate representatives from the insolvent self-insurer to determine the action plan for the payment of oustanding workers' compensation claims. The association investigates all relevant insurance carriers to determine what if any recoveries may be available for the payment of workers' compensation claims. In accordance with its statutory mandate, upon default, the association pursues recoveries in the bankruptcy court and recoveries from all relevant insurance carriers or financial institutions.