39-71-741. Compromise settlements and lump-sum payments. (1) (a) Benefits under this chapter may be converted in whole or in part to a lump sum:
     (i) if a claimant and an insurer dispute the initial compensability of an injury; and
     (ii) if the claimant and insurer agree to a settlement.
     (b) The agreement is subject to department approval. The department may disapprove an agreement under this section only if there is not a reasonable dispute over compensability.
     (c) Upon approval, the agreement constitutes a compromise and release settlement and may not be reopened by the department.
     (2) (a) Permanent partial disability benefits may be converted in whole or in part to a lump-sum payment if:
     (i) an insurer has accepted initial liability for an injury; and
     (ii) the claimant and the insurer agree to a lump-sum conversion.
     (b) The total of any lump-sum conversion in part that is awarded to a claimant prior to the claimant's final award may not exceed the anticipated award under 39-71-703.
     (c) An agreement is subject to department approval. The department may disapprove an agreement only if the department determines that the lump-sum conversion amount is inadequate. If disapproved, the department shall set forth in detail the reasons for disapproval.
     (d) Upon approval, a compromise and release settlement may not be reopened by the department.
     (3) Permanent total disability benefits may be converted in whole or in part to a lump sum. The total of all lump-sum conversions in part that are awarded to a claimant may not exceed $20,000. A conversion may be made only upon the written application of the injured worker with the concurrence of the insurer. Approval of the lump-sum payment rests in the discretion of the department. The approval or award of a lump-sum payment by the department or court must be the exception. It may be given only if the worker has demonstrated financial need that:
     (a) relates to:
     (i) the necessities of life;
     (ii) an accumulation of debt incurred prior to the injury; or
     (iii) a self-employment venture that is considered feasible under criteria set forth by the department; or
     (b) arises subsequent to the date of injury or arises because of reduced income as a result of the injury.
     (4) Any lump-sum conversion of benefits under this section must be converted to present value using the rate prescribed under subsection (5)(b).
     (5) (a) An insurer may recoup any lump-sum payment amortized at the rate established by the department, prorated biweekly over the projected duration of the compensation period.
     (b) The rate adopted by the department must be based on the average rate for United States 10-year treasury bills in the previous calendar year.
     (c) If the projected compensation period is the claimant's lifetime, the life expectancy must be determined by using the most recent table of life expectancy as published by the United States national center for health statistics.
     (6) Subject to the other provisions of this section, the department shall approve or deny in writing compromise settlements and lump-sum payments agreed to by workers and insurers. The department shall directly notify a claimant of a department order approving or denying a claimant's compromise or lump-sum payment.
     (7) A dispute between a claimant and an insurer regarding the conversion of biweekly payments into a lump-sum is considered a dispute, for which a mediator and the workers' compensation court have jurisdiction to make a determination. If an insurer and a claimant agree to a compromise and release settlement or a lump-sum payment but the department disapproves the agreement, the parties may request the workers' compensation court to review the department's decision.

     History: En. Sec. 16, Ch. 96, L. 1915; amd. Sec. 9, Ch. 100, L. 1919; re-en. Sec. 2926, R.C.M. 1921; re-en. Sec. 2926, R.C.M. 1935; amd. Sec. 1, Ch. 225, L. 1951; amd. Sec. 8, Ch. 234, L. 1957; amd. Sec. 2, Ch. 197, L. 1961; amd. Sec. 1, Ch. 9, L. 1975; amd. Sec. 1, Ch. 11, L. 1975; amd. Sec. 19, Ch. 23, L. 1975; R.C.M. 1947, 92-715; amd. Sec. 3, Ch. 63, L. 1979; amd. Sec. 1, Ch. 471, L. 1985; amd. Sec. 32, Ch. 464, L. 1987; amd. Sec. 64, Ch. 613, L. 1989; amd. Sec. 6, Ch. 574, L. 1991; amd. Sec. 20, Ch. 243, L. 1995.