Senate Bill No. 349
Introduced By keating, simon
A Bill for an Act entitled: An Act revising the Workers' Compensation regulatory functions of the Department of Labor and Industry; permitting an insurer access to the Workers' Compensation data base system; eliminating department of labor and industry certification of trade groups that wish to purchase group insurance; eliminating obsolete references to the assigned risk pool; clarifying the administration of the uninsured employers' fund; eliminating the underinsured employers' fund; clarifying the procedures relating to compromise settlements and lump-sum conversions; clarifying rehabilitation plan agreements; eliminating medical advisory committees; eliminating plan No. 2 deposit requirements; providing for refund of plan No. 2 insurer deposits and the transfer of surplus funds in the underinsured employers' fund to the uninsured employers' fund; providing that an independent contractor exemption remains in effect for 3 years; amending sections 20-15-403, 33-2-119, 39-71-225, 39-71-401, 39-71-433, 39-71-503, 39-71-504, 39-71-704, 39-71-721, 39-71-741, and 39-71-2314, MCA; repealing sections 39-71-431, 39-71-531, 39-71-532, 39-71-533, 39-71-534, 39-71-1013, 39-71-1109, and 39-71-2206, MCA; and providing an effective date.
Be it enacted by the Legislature of the State of Montana:
Section 1. Section 20-15-403, MCA, is amended to read:
"20-15-403. Applications of other school district provisions. (1) When the term "school district" appears in the
following sections outside of Title 20, the term includes community college districts and the provisions of those sections
applicable to school districts apply to community college districts: 2-9-101, 2-9-111, 2-9-316, 2-16-114, 2-16-602,
2-16-614, 2-18-703, 7-3-1101, 7-6-2604, 7-6-2801, 7-7-123, 7-8-2214, 7-8-2216, 7-11-103, 7-12-4106, 7-13-110,
7-13-210, 7-15-4206, 10-1-703, 15-1-101, 15-6-204, 15-16-101, 15-16-605, 15-70-301, 17-5-101, 17-5-202, 17-6-103,
17-6-204, 17-6-213, 17-7-201, 18-1-201, 18-2-101, 18-2-103, 18-2-113, 18-2-114, 18-2-404, 18-2-432, 18-5-205,
19-1-102, 19-1-811, 22-1-309, 25-1-402, 27-18-406, 33-20-1104, 39-3-104, 39-4-107, 39-31-103, 39-31-304, 39-71-116,
39-71-2206, 40-6-237, 41-3-1132, 49-3-101, 49-3-102, 53-20-304, 77-3-321, 82-10-201,
82-10-202, 82-10-203, 85-7-2158, and 90-6-208 and Rules 4D(2)(g) and 15(c), M.R.Civ.P., as amended.
(2) When the term "school district" appears in a section outside of Title 20 but the section is not listed in subsection (1), the school district provision does not apply to a community college district."
Section 2. Section 33-2-119, MCA, is amended to read:
"33-2-119. Suspension or revocation for violations and special grounds. (1) The commissioner may
, in his discretion,
suspend or revoke an insurer's certificate of authority if, after a hearing thereon, he the commissioner finds that the insurer
(a) violated any lawful order of the commissioner or any provision of this code other than those for which suspension or revocation is mandatory;
(b) reinsured more than 90% of its risks resident, located, or to be performed in Montana, in another insurer. In considering suspension or revocation, the commissioner shall consider all relevant factors, including whether:
(i) after the reinsurance transaction all parties will be in compliance with Montana law; and
(ii) the transaction will substantially reduce protection and service to Montana policyholders
; (c) failed to accept an equitable apportionment of assigned coverage as required by 39-71-431.
(2) The commissioner shall, after a hearing
thereon, suspend or revoke an insurer's certificate of authority if he the
commissioner finds that the insurer:
(a) is in unsound condition or in
such a condition or using such methods or practices in the conduct of its business as to
that render its further transaction of insurance in Montana injurious or hazardous to its policyholders or to the public;
(b) has refused to be examined or to produce its accounts, records, and files for examination or if any of its officers have refused to give information with respect to its affairs, when required by the commissioner;
(c) has failed to pay any final judgment rendered against it in Montana within 30 days after the judgment became final;
(d) with such frequency as to indicate its general business practice in Montana, has without just cause refused to pay a
proper claim arising under its policies, whether the claim is in favor of an insured or is in favor of a third person with
respect to the liability of an insured to the third person, or without just cause compels the insured or claimant to accept less
than the amount due
him the claimant or to employ attorneys or to bring suit against the insurer or insured to secure full
payment or settlement of the claims;
(e) is affiliated with and under the same general management or interlocking directorate or ownership as another insurer
which that transacts direct insurance in Montana without having a certificate of authority therefor, except as permitted as to
a surplus lines insurer under part 3 of this chapter.
(3) The commissioner may,
in his discretion and without advance notice or a hearing thereon, immediately suspend the
certificate of authority of any insurer as to which proceedings for receivership, conservatorship, rehabilitation, or other
delinquency proceedings have been commenced in any state."
Section 3. Section 39-71-225, MCA, is amended to read:
"39-71-225. Workers' compensation data base system. (1) The department shall develop a workers' compensation data base system to generate management information about Montana's workers' compensation system. The data base system must be used to collect and compile information from insurers, employers, medical providers, claimants, adjusters, rehabilitation providers, and the legal profession.
(2) Data collected must be used to provide:
(a) management information to the legislative and executive branches for the purpose of making policy and management decisions, including but not limited to:
(a)(i) performance information to enable the state to enact remedial efforts to ensure quality, control abuse, and enhance
cost control; (b)(ii) information on medical, indemnity, and rehabilitation costs, utilization, and trends; and (c)(iii) information on litigation and attorney involvement for the purpose of identifying trends, problem areas, and the
costs of legal involvement;
(b) current and prior claim information to any insurer that is at risk on a claim, or that is alleged to be at risk in any
administrative or judicial proceeding, to determine claims liability or for fraud investigation
.. The department may release
information only upon written request by the insurer and may disclose only the claimant's name, claimant's identification
number, prior claim number, date of injury, body part involved, and name and address of the insurer and claim adjuster on
each claim filed. Information obtained by an insurer pursuant to this section must remain confidential and may not be
disclosed to a third party except to the extent necessary for determining claim liability or for fraud investigation; and
(c) current and prior claim information to law enforcement agencies for purposes of fraud investigation or prosecution.
(2)(3) The department is authorized to collect from insurers, employers, medical providers, the legal profession, and others
the information necessary to generate the workers' compensation data base system. (3)(4) The workers' compensation data base system must be designed in accordance with the following principles:
(a) avoidance of duplication and inconsistency;
(b) reasonable availability of data elements;
(c) value of information collected to be commensurate with the cost of retrieving the collected information;
(d) uniformity to permit efficiency of collection and to allow interstate comparisons;
(e) a workable mechanism to ensure the accuracy of the data collected and to protect the confidentiality of collected data;
(f) reasonable availability of the data at a fair cost to the user;
(g) a broad application to plan No. 1, plan No. 2, and plan No. 3 insurers;
(h) compatibility with electronic data reporting;
(i) reporting procedures that can be handled through private data collection systems that adhere to the provisions of
(3)(a) (4)(a) through (3)(h) (4)(h);
(j) implementation of reporting requirements that allow reasonable lead time for compliance.
(4)(5) (a) The department shall take all steps necessary to have the workers' compensation data base system fully
operational by July 1, 1995. (b) After the workers' compensation data base system is operational, the The department shall publish an annual an annual
report and may publish quarterly reports on the information compiled.
(6) Users of information obtained from the workers' compensation data base under this section are liable for damages arising from misuse or unlawful dissemination of data base information."
Section 4. Section 39-71-401, MCA, is amended to read:
"39-71-401. Employments covered and employments exempted. (1) Except as provided in subsection (2), the Workers' Compensation Act applies to all employers, as defined in 39-71-117, and to all employees, as defined in 39-71-118. An employer who has any employee in service under any appointment or contract of hire, expressed or implied, oral or written, shall elect to be bound by the provisions of compensation plan No. 1, 2, or 3. Each employee whose employer is bound by the Workers' Compensation Act is subject to and bound by the compensation plan that has been elected by the employer.
(2) Unless the employer elects coverage for these employments under this chapter and an insurer allows an election, the Workers' Compensation Act does not apply to any of the following employments:
(a) household and domestic employment;
(b) casual employment as defined in 39-71-116;
(c) employment of a dependent member of an employer's family for whom an exemption may be claimed by the employer under the federal Internal Revenue Code;
(d) employment of sole proprietors, working members of a partnership, or working members of a member-managed limited liability company, except as provided in subsection (3);
(e) employment of a broker or
salesman salesperson performing under a license issued by the board of realty regulation;
(f) employment of a direct seller as defined in 26 U.S.C. 3508;
(g) employment for which a rule of liability for injury, occupational disease, or death is provided under the laws of the United States;
(h) employment of a person performing services in return for aid or sustenance only, except employment of a volunteer under 67-2-105;
(i) employment with a railroad engaged in interstate commerce, except that railroad construction work is included in and subject to the provisions of this chapter;
(j) employment as an official, including a timer, referee, or judge, at a school amateur athletic event, unless the person is otherwise employed by a school district;
(k) employment of a person performing services as a newspaper carrier or free-lance correspondent if the person performing the services or a parent or guardian of the person performing the services in the case of a minor has acknowledged in writing that the person performing the services and the services are not covered. As used in this subsection, "free-lance correspondent" is a person who submits articles or photographs for publication and is paid by the article or by the photograph. As used in this subsection, "newspaper carrier":
(i) is a person who provides a newspaper with the service of delivering newspapers singly or in bundles; but
(ii) does not include an employee of the paper who, incidentally to the employee's main duties, carries or delivers papers.
(l) cosmetologist's services and barber's services as defined in 39-51-204(1)(l);
(m) a person who is employed by an enrolled tribal member or an association, business, corporation, or other entity that is at least 51% owned by an enrolled tribal member or members, whose business is conducted solely within the exterior boundaries of an Indian reservation;
(n) employment of a jockey performing under a license issued by the board of horseracing from the time the jockey reports to the scale room prior to a race through the time the jockey is weighed out after a race if the jockey has acknowledged in writing, as a condition of licensing by the board of horseracing, that the jockey is not covered under the Workers' Compensation Act while performing services as a jockey;
(o) employment of an employer's spouse for whom an exemption based on marital status may be claimed by the employer under 26 U.S.C. 7703;
(p) a person who performs services as a petroleum land professional. As used in this subsection, a "petroleum land professional" is a person who:
(i) is engaged primarily in negotiating for the acquisition or divestiture of mineral rights or in negotiating a business agreement for the exploration or development of minerals;
(ii) is paid for services that are directly related to the completion of a contracted specific task rather than on an hourly wage basis; and
(iii) performs all services as an independent contractor pursuant to a written contract.
(q) an officer of a quasi-public or a private corporation or manager of a manager-managed limited liability company who qualifies under one or more of the following provisions:
(i) the officer or manager is engaged in the ordinary duties of a worker for the corporation or the limited liability company and does not receive any pay from the corporation or the limited liability company for performance of the duties;
(ii) the officer or manager is engaged primarily in household employment for the corporation or the limited liability company;
(iii) the officer or manager owns 20% or more of the number of shares of stock in the corporation or owns 20% or more of the limited liability company; or
(iv) the officer or manager is the spouse, child, adopted child, stepchild, mother, father, son-in-law, daughter-in-law, nephew, niece, brother, or sister of a corporate officer who owns 20% or more of the number of shares of stock in the corporation or who owns 20% or more of the limited liability company.
(3) (a) A sole proprietor, a working member of a partnership, or a working member of a member-managed limited liability company who represents to the public that the person is an independent contractor shall elect to be bound personally and individually by the provisions of compensation plan No. 1, 2, or 3 but may apply to the department for an exemption from the Workers' Compensation Act.
(b) The application must be made in accordance with the rules adopted by the department.
There is no There is a $25 fee
for the initial initial application . Any subsequent application. Any subsequent application renewal must be accompanied by
a $25 application fee accompanied by a $25 application fee. The application fee must be deposited in the administration
fund established in 39-71-201 to offset the costs of administering the program to offset the costs of administering the
(c) When an application is approved by the department, it is conclusive as to the status of an independent contractor and precludes the applicant from obtaining benefits under this chapter.
(d) The exemption, if approved, remains in effect for
1 year 3 years following the date of the department's approval. To
maintain the independent contractor status, an independent contractor shall annually every 3 years submit a renewal
application. A renewal application must be submitted for all independent contractor exemptions approved as of July 1,
1995, or thereafter. The renewal application and the $25 renewal application fee must be received by the department at least
30 days prior to the anniversary date of the previously approved exemption.
(e) A person who makes a false statement or misrepresentation concerning that person's status as an exempt independent contractor is subject to a civil penalty of $1,000. The department may impose the penalty for each false statement or misrepresentation. The penalty must be paid to the uninsured employers' fund. The lien provisions of 39-71-506 apply to the penalty imposed by this section.
(f) If the department denies the application for exemption, the applicant may contest the denial by petitioning for review of the decision by an appeals referee in the manner provided for in 39-51-1109. An applicant dissatisfied with the decision of the appeals referee may appeal the decision in accordance with the procedure established in 39-51-2403 and 39-51-2404.
(4) (a) A corporation or a manager-managed limited liability company shall provide coverage for its employees under the provisions of compensation plan No. 1, 2, or 3. A quasi-public corporation, a private corporation, or a manager-managed limited liability company may elect coverage for its corporate officers or managers, who are otherwise exempt under subsection (2), by giving a written notice in the following manner:
(i) if the employer has elected to be bound by the provisions of compensation plan No. 1, by delivering the notice to the board of directors of the corporation or to the management organization of the manager-managed limited liability company; or
(ii) if the employer has elected to be bound by the provisions of compensation plan No. 2 or 3, by delivering the notice to the board of directors of the corporation or to the management organization of the manager-managed limited liability company and to the insurer.
(b) If the employer changes plans or insurers, the employer's previous election is not effective and the employer shall again serve notice to its insurer and to its board of directors or the management organization of the manager-managed limited liability company if the employer elects to be bound.
(5) The appointment or election of an employee as an officer of a corporation, a partner in a partnership, or a member in or a manager of a limited liability company for the purpose of exempting the employee from coverage under this chapter does not entitle the officer, partner, member, or manager to exemption from coverage.
(6) Each employer shall post a sign in the workplace at the locations where notices to employees are normally posted, informing employees about the employer's current provision of workers' compensation insurance. A workplace is any location where an employee performs any work-related act in the course of employment, regardless of whether the location is temporary or permanent, and includes the place of business or property of a third person while the employer has access to or control over the place of business or property for the purpose of carrying on the employer's usual trade, business, or occupation. The sign must be provided by the department, distributed through insurers or directly by the department, and posted by employers in accordance with rules adopted by the department. An employer who purposely or knowingly fails to post a sign as provided in this subsection is subject to a $50 fine for each citation."
Section 5. Section 39-71-433, MCA, is amended to read:
"39-71-433. Group purchase of workers' compensation insurance. (1)
On receiving approval of the department, two
Two or more business entities may join together to form a group to purchase individual workers' compensation insurance
policies covering each member of the group. (2) To be eligible to join a new group that is forming, the department shall determine that a business entity is engaged in a
business pursuit that is the same as or similar to the business pursuits of the other entities participating in the group. (3) The department shall establish a certification program for groups organized under this section and shall issue to eligible
business entities certificates of approval that authorize formation and maintenance of a group. (4) The department by rule shall adopt forms, criteria, and procedures for the issuance of certificates of approval to groups
under this section. (5) A group certified under this section may add additional members without approval from the department if the
additional members meet the specific criteria identified in the original application and any modifications to the criteria, as
approved by the department. (6)(2) A group certified formed under this section may purchase individual workers' compensation insurance policies
covering each member of the group from any insurer authorized to write workers' compensation insurance in this state,
except that the state fund, as defined in 39-71-2312, has the right to refuse coverage of a group and its plan of operation but
cannot may not refuse coverage to an individual employer. Under an individual policy, the group is entitled to a premium
or volume discount that would be applicable to a policy of the combined premium amount of the individual policies. (7)(3) A group shall apportion any discount or policyholder dividend received on workers' compensation insurance
coverage among the members of the group according to a formula adopted in the plan of operation for the group. (8)(4) A group shall adopt a plan of operation that must include the composition and selection of a governing board, the
methods for administering the group, the eligibility requirements to join the group, and guidelines for the workers'
compensation insurance coverage obtained by the group, including the payment of premiums, the distribution of discounts,
and the method for providing risk management. A group shall file a copy of its plan of operation with the department."
Section 6. Section 39-71-503, MCA, is amended to read:
"39-71-503. Administration of fund -- appropriation. (1) The department shall administer the fund and shall pay from it all expenses of administering the fund, all loss adjustment expenses for claims of injured employees of uninsured employers, and all proper benefits to injured employees of uninsured employers.
(2) Surpluses and reserves may not be kept for the fund. The department shall make payments that it considers appropriate
as funds become available from time to time. The payment of weekly disability benefits takes
preference precedence over
the payment of medical benefits. Lump-sum payments of future projected benefits, including impairment awards, may not
be made from the fund. The board of investments shall invest the money of the fund, and the investment income must be
deposited in the fund. The cost of administration of the fund must be paid out of the money in the fund.
(3) The amounts necessary for the payment of benefits from this fund are statutorily appropriated, as provided in 17-7-502, from this fund."
Section 7. Section 39-71-504, MCA, is amended to read:
"39-71-504. Funding of fund -- option for agreement between department and injured employee. The fund is funded in the following manner:
(1) (a) The department may require that the uninsured employer pay to the fund a penalty of either up to
double double the
premium amount the employer would have paid on the payroll of the employer's workers in this state if the employer had
been enrolled with compensation plan No. 3 or $200 $200, whichever is greater. In determining the premium amount for
the calculation of the penalty under this subsection, the department shall make an assessment based on how much premium
would have been paid on the employer's past 3-year payroll for periods within the 3 years when the employer was
uninsured. In determining the premium amount for the calculation of the penalty under this subsection, the department shall
make an assessment on how much premium would have been paid on the employer's past 3-year payroll for periods within
the 3 years when the employer was uninsured. (2)(b) The fund shall receive collect from an uninsured employer an amount equal to all benefits paid or to be paid from
the fund to an injured employee of the uninsured employer. (3) The department may determine that the $1,000 assessments that are charged against an insurer in each case of an
industrial death under 39-71-902(1) must be paid to the uninsured employers' fund rather than the subsequent injury fund. (4)(2) The department may enter into an agreement with the injured employee or the employee's beneficiaries to assign to
the employee or the beneficiaries all or part of the funds received collected by the department from the uninsured employer
pursuant to subsection (2) (1)(b)."
Section 8. Section 39-71-704, MCA, is amended to read:
"39-71-704. Payment of medical, hospital, and related services -- fee schedules and hospital rates -- fee limitation. (1) In addition to the compensation provided under this chapter and as an additional benefit separate and apart from compensation benefits actually provided, the following must be furnished:
(a) After the happening of a compensable injury and subject to other provisions of this chapter, the insurer shall furnish reasonable primary medical services for conditions resulting from the injury for those periods as the nature of the injury or the process of recovery requires.
(b) The insurer shall furnish secondary medical services only upon a clear demonstration of cost-effectiveness of the services in returning the injured worker to actual employment.
(c) The insurer shall replace or repair prescription eyeglasses, prescription contact lenses, prescription hearing aids, and dentures that are damaged or lost as a result of an injury, as defined in 39-71-119, arising out of and in the course of employment.
(d) The insurer shall reimburse a worker for reasonable travel expenses incurred in travel to a medical provider for treatment of an injury only if the travel is incurred at the request of the insurer. Reimbursement must be at the rates allowed for reimbursement of travel by state employees.
(e) Except for the repair or replacement of a prosthesis furnished as a result of an industrial injury, the benefits provided for in this section terminate when they are not used for a period of 60 consecutive months.
(f) Notwithstanding subsection (1)(a), the insurer may not be required to furnish, after the worker has achieved medical stability, palliative or maintenance care except:
(i) when provided to a worker who has been determined to be permanently totally disabled and for whom it is medically necessary to monitor administration of prescription medication to maintain the worker in a medically stationary condition; or
(ii) when necessary to monitor the status of a prosthetic device.
(g) If the worker's treating physician believes that palliative or maintenance care that would otherwise not be compensable under subsection (1)(f) is appropriate to enable the worker to continue current employment or that there is a clear probability of returning the worker to employment, the treating physician shall first request approval from the insurer for the treatment. If approval is not granted, the treating physician may request approval from the department for the treatment. The department shall appoint a panel of physicians, including at least one treating physician from the area of specialty in which the injured worker is being treated, pursuant to rules that the department may adopt, to review the proposed treatment and determine its appropriateness.
(h) Notwithstanding any other provisions of this chapter, the department, by rule and upon the advice of the professional licensing boards of practitioners affected by the rule, may exclude from compensability any medical treatment that the department finds to be unscientific, unproved, outmoded, or experimental.
(2) The department shall annually establish a schedule of fees for medical nonhospital services necessary for the treatment
of injured workers. Charges submitted by providers must be the usual and customary charges for nonworkers'
compensation patients. The department may require insurers to submit information to be used in establishing the schedule.
The department shall establish utilization and treatment standards for all medical services provided for under this chapter in
consultation with the standing medical advisory committees provided for in 39-71-1109.
(3) The department shall establish rates for hospital services necessary for the treatment of injured workers. Beginning January 1, 1995, the rates may be based on per diem or diagnostic-related groups. The rates established by the department pursuant to this subsection may not be less than medicaid reimbursement rates. Approved rates must be in effect for a period of 12 months from the date of approval. The department may coordinate this ratesetting function with other public agencies that have similar responsibilities. For services available in Montana, insurers are not required to pay facilities located outside Montana rates that are greater than those allowed for services delivered in Montana.
(4) The percentage increase in medical costs payable under this chapter may not exceed the annual percentage increase in the state's average weekly wage as defined in 39-71-116.
(5) Payment pursuant to reimbursement agreements between managed care organizations or preferred provider organizations and insurers is not bound by the provisions of this section.
(6) Disputes between an insurer and a medical service provider regarding the amount of a fee for medical services must be resolved by a hearing before the department upon written application of a party to the dispute.
(7) (a) After the initial visit, the worker is responsible for 20%, but not to exceed $10, of the cost of each subsequent visit to a medical service provider for treatment relating to a compensable injury or occupational disease, unless the visit is to a medical service provider in a managed care organization as requested by the insurer or is a visit to a preferred provider as requested by the insurer.
(b) After the initial visit, the worker is responsible for $25 of the cost of each subsequent visit to a hospital emergency department for treatment relating to a compensable injury or occupational disease.
(c) "Visit", as used in subsections (7)(a) and (7)(b), means each time the worker obtains services relating to a compensable injury or occupational disease from:
(i) a treating physician;
(ii) a physical therapist;
(iii) a psychologist; or
(iv) hospital outpatient services available in a nonhospital setting.
(d) A worker is not responsible for the cost of a subsequent visit pursuant to subsection (7)(a) if the visit is an examination requested by an insurer pursuant to 39-71-605."
Section 9. Section 39-71-721, MCA, is amended to read:
"39-71-721. Compensation for injury causing death -- limitation. (1) (a) If an injured employee dies and the injury was the proximate cause of the death, the beneficiary of the deceased is entitled to the same compensation as though the death occurred immediately following the injury. A beneficiary's eligibility for benefits commences after the date of death, and the benefit level is established as set forth in subsection (2).
(b) The insurer is entitled to recover any overpayments or compensation paid in a lump sum to a worker prior to death but
not yet recouped. The insurer shall recover the payments from the beneficiary's biweekly payments as provided in
(2) To beneficiaries as defined in 39-71-116(5)(a) through (5)(d), weekly compensation benefits for an injury causing death are 66 2/3% of the decedent's wages. The maximum weekly compensation benefit may not exceed the state's average weekly wage at the time of injury. The minimum weekly compensation benefit is 50% of the state's average weekly wage, but in no event may it exceed the decedent's actual wages at the time of death.
(3) To beneficiaries as defined in 39-71-116(5)(e) and (5)(f), weekly benefits must be paid to the extent of the dependency at the time of the injury, subject to a maximum of 66 2/3% of the decedent's wages. The maximum weekly compensation may not exceed the state's average weekly wage at the time of injury.
(4) If the decedent leaves no beneficiary, a lump-sum payment of $3,000 must be paid to the decedent's surviving parent or parents.
(5) If any beneficiary of a deceased employee dies, the right of the beneficiary to compensation under this chapter ceases. Death benefits must be paid to a surviving spouse for 500 weeks subsequent to the date of the deceased employee's death or until the spouse's remarriage, whichever occurs first. After benefit payments cease to a surviving spouse, death benefits must be paid to beneficiaries, if any, as defined in 39-71-116(5)(b) through (5)(d).
(6) In all cases, benefits must be paid to beneficiaries.
(7) Benefits paid under this section may not be adjusted for cost of living as provided in 39-71-702."
Section 10. Section 39-71-741, MCA, is amended to read:
"39-71-741. Compromise settlements and lump-sum payments. (1) By written agreement filed with the department, benefits under this chapter may be converted in whole or in part into a lump sum. An agreement is subject to department approval. If the department fails to approve or disapprove the agreement in writing within 14 days of the filing with the department, the agreement is approved. The department shall directly notify a claimant of a department order approving or disapproving a claimant's compromise or lump-sum payment. Upon approval, the agreement constitutes a compromise and release settlement and may not be reopened by the department. The department may approve an agreement to convert the following benefits to a lump sum only under the following conditions:
Benefits under this chapter may be converted in whole or in part to a lump sum: (i) all benefits 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 there is 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)(b) Permanent permanent partial disability benefits may be converted in whole or in part to a lump-sum payment if: (i) if 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 permanent partial 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 under this subsection
(1)(b) 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)(c) Permanent permanent total disability benefits may be converted in whole or in part to a lump sum. The if the total of
all lump-sum conversions in part that are awarded to a claimant may do 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 permanent total disability payment
in whole or in part by the department or court must be the exception. It may be given only if the worker has demonstrated
financial need that: (a)(i) relates to: (i)(A) the necessities of life; (ii)(B) an accumulation of debt incurred prior to the injury; or (iii)(C) a self-employment venture that is considered feasible under criteria set forth by the department; or (b)(ii) arises subsequent to the date of injury or arises because of reduced income as a result of the injury; or
(d) except as otherwise provided in this chapter, all other compromise settlements and lump-sum payments agreed to by a claimant and insurer.
(4)(2) Any lump-sum conversion of benefits under this section must be converted to present value using the rate prescribed
under subsection (5)(b) (3)(b). (5)(3) (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)(4) 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."
Section 11. Section 39-71-2314, MCA, is amended to read:
"39-71-2314. State fund
-- assigned risk plan subject to laws applying to state agencies. (1) If an assigned risk plan is
established and administered pursuant to 39-71-431, the state fund is subject to the premium tax liability for insurers as
provided in 33-2-705 based on earned premium and paid on revenue from the previous fiscal year. (2) The state fund is subject to laws that generally apply to state agencies, including but not limited to Title 2, chapters 2,
3, 4 (only as provided in 39-71-2316), and 6, and Title 5, chapter 13. The state fund is not exempt from a law that applies to
state agencies unless that law specifically exempts the state fund by name and clearly states that it is exempt from that law."
Section 12. Transfer of deposits and surplus funds. (1) All deposits held in trust by the department of labor and industry pursuant to 39-71-2206 must be returned to the insurer who made the deposit on or before December 31, 1997.
(2) Any surplus funds remaining in the underinsured employers' fund on [the effective date of this act] must be deposited in the uninsured employers' fund provided for in 39-71-502.
Section 13. Repealer. Sections 39-71-431, 39-71-531, 39-71-532, 39-71-533, 39-71-534, 39-71-1013, 39-71-1109, and 39-71-2206, MCA, are repealed.
Section 14. Severability. If a part of [this act] is invalid, all valid parts that are severable from the invalid part remain in effect. If a part of [this act] is invalid in one or more of its applications, the part remains in effect in all valid applications that are severable from the invalid applications.
Section 15. Effective date. [This act] is effective July 1, 1997.