HB2407

SECTION 1. Chapter 373K, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§373K- Workers' compensation insurance. (a) Before obtaining a workers' compensation insurance policy covering assigned employees of a client company, a professional employment organization shall register with the insurance commissioner as required by section 431:14- .

(b) A professional employment organization that maintains workers' compensation coverage for assigned employees shall:

(1) Maintain separate payroll records and separate records of work-related injuries and illnesses for each client company and shall report these in a timely and ongoing manner to its insurer;

(2) Provide the client company with payroll and loss experience records related to the workers' compensation insurance provided to assigned employees under the contract within sixty days after the termination of a contract with a client company; and

(3) Comply with any related rules adopted by the insurance commissioner.

SECTION 2. Chapter 431, Hawaii Revised Statutes, is amended by adding a new section to article 14 to be appropriately designated and to read as follows:

"§431:14- Professional employment organizations; registration; workers' compensation premiums. (a) A professional employment organization that will be maintaining workers' compensation coverage for assigned employees shall register with the commissioner. An insurer may not issue a workers' compensation insurance policy to a professional employment organization that is not registered, nor enter into an agreement with an unregistered professional employment organization to issue policies to clients of the professional employment organization.

(b) Workers' compensation insurance premiums with respect to any client company of a professional employment organization shall be determined based on the experience modification factor of the client; provided that the client company has sufficient workers' compensation premium volume to be experience rated. The client company's experience modification factor shall be based on exposures and claims for assigned employees and any other employees of the client company. Otherwise, the premiums shall be at the rate approved by the commissioner for an employer that cannot be experience rated.

(c) The professional employment organization shall maintain separate payroll records and separate records of work-related injuries and illnesses for each client company and shall report these in a timely and ongoing manner to its insurer.

(d) For the purposes of this section, "assigned employee", "client company", "professional employment organization", and "professional organization services" have the same meaning as in section 373K-1."

SECTION 3. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun, before its effective date.

SECTION 4. New statutory material is underscored.

SECTION 5. This Act shall take effect on January 1, 2009.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	2407
TWENTY-FOURTH LEGISLATURE, 2008
STATE OF HAWAII