DEPARTMENT OF LABOR AND ECONOMIC GROWTH

                          WORKERS' COMPENSATION AGENCY

                                 GENERAL RULES

(By authority conferred on the director of the workers'  compensation  agency 
by section 205 of 1969 PA 317, section 48  of  1969  PA  306,  and  Executive 
Reorganization Order Nos. 1996-2, 1999-3, 2002-1, and  2003-1,  MCL  418.205, 
24.248, 445.2001, 418.3, 445.2004, and 445.2011)


                              PART 1. RECORDS

R 408.31   Report  of   injury;   claim   for   compensation,   additional   
reports; weekly rate of compensation.
  Rule 1. (1) An employer shall report immediately, to the  bureau,  on  form 
100, all injuries, including diseases, which arise out of and in  the  course 
of the employment, or on which a claim is made, and  result  in  any  of  the 
following:
  (a) Disability extending beyond 7 consecutive days, not including the  date 
of injury.
  (b) Death.
  (c) Specific losses.
  (2) Any report of injury filed with the bureau by an employer that fails to 
meet the requirements of subrule (1) of this rule shall not be maintained  as 
a record of the bureau unless filed with a form 107.
  (3) An employer shall give a copy of the report of injury (form 100) to the 
injured employee immediately and in the case of death, to the dependent. Form 
100 shall indicate compliance with this requirement.  A  delay  in  reporting 
shall not occur because of this requirement. In case of  death,  an  employer 
shall also immediately file an additional report on form 106.
  (4) An employee shall make a claim for compensation to the bureau  on  form 
117.
The bureau shall mail a copy of form 117 to the employer.
  (5) After an employee has given an employer the name of the physician  with 
whom he or she intends to seek treatment and has commenced treatment with the 
physician under section 315  of  the  act,  the  employee  shall  obtain  and 
promptly  furnish  a  report  to  the   employer,   insurance   company,   or 
self-insurers’  security  fund.  The  report  shall  set  forth  the  history 
obtained, the diagnosis, the  prognosis,  and  other  information  reasonably 
necessary to properly evaluate the injury, the disability, and the  necessity 
for further rehabilitation or treatment. Thereafter, at reasonable  intervals 
of not more than 60 days, an employee shall  obtain  and  furnish  a  current 
medical report, paid for by the carrier,  containing  the  same  information, 
together with an itemized statement of charges for services rendered to date.
A self-insured employer, insurance company, or self-insurers’  security  fund 
is not required to make payment  to  the  physician  until  the  reports  and 
itemized charges have been furnished to it.
Medical fees shall not exceed fees considered usual and  reasonable  for  the 
services performed in accordance with the health care service rules.
  (6) For a case that requires the payment of compensation,  a  carrier,  the 
second injury fund, the self-insurers’ security fund, and the silicosis, dust 
disease and logging  industry  compensation  fund,  shall  file  all  of  the 
following reports, notices, or statements as required by the bureau:
  (a) Form 701 on the day  after  the  first  payment  of  compensation.  The 
carrier or fund shall furnish a copy of form 701 to the employee.
  (b) Form 701 on the day after  the  stopping  of  payment  of  compensation 
showing the amount of compensation paid in every case. Subject to  R  408.40, 
when compensation is stopped on the basis that  the  employee  has  recovered 
from disability or that the employee is able to return to work, but  has  not 
done so, the medical report supporting this position  shall  be  attached  to 
form 701, or filed within 30 days thereafter. When a supplemental form 701 is 
filed, only that amount not previously reported shall be  shown.  In  a  case 
that requires the filing of form 701, the carrier and  the  funds  shall,  in 
writing, advise the injured employee  whose  benefits  have  stopped  of  the 
reasons for the action taken at the same time by furnishing  a  copy  of  the 
form 701 to the employee.
  (c) The director may require a report showing the  amount  of  compensation 
actually paid in cases where payment of compensation has not been  previously 
stopped as of December 31 by the filing of form 701, for that calendar  year, 
regardless of the length of time the case was open. If  during  the  calendar 
year a form 701 had been previously filed, then only the payments made during 
the calendar year after the filing of form 701 shall be reported. The  report 
shall be furnished to the bureau at a time and in a manner  as  the  director 
may reasonably require.
  (d) Immediate notification to the bureau of  any  change  in  the  rate  of 
compensation. The notice shall state the reason on form  701.The  carrier  or 
fund shall send a copy to the employee.
  (e) A statement of the attending physician  in  every  specific  loss.  The 
statement shall identify the date and extent of the loss.

  History:  1979 AC; 1980 AACS; 1984 AACS; 1998-2000 AACS.
 

R 408.31a  Computation of weeks and days.
  Rule 1a. In computing periods of disability and  of  compensation,  a  week 
shall be computed as 7 days and a day as 1/7 of a  week,  without  regard  to 
Sundays, holidays, and working days.

  History:  1998-2000 AACS.


R 408.32   Compensation supplement fund; "maximum benefit" defined.
  Rule 2. (1) A carrier, second injury fund, or self-insurers’ security  fund 
shall claim reimbursement from the compensation supplement fund for  payments 
made in accordance with section 352 of the  act.  A  carrier,  second  injury 
fund, or self-insurers’ security fund, shall make a claim on bureau form 114, 
application for reimbursement.
  (2) A carrier, second injury fund, or self-insurers’  security  fund  shall 
make an initial application for reimbursement not later than 3  months  after 
the end of the quarter for which the right to reimbursement first accrues.
The right to reimbursement first accrues on the  first  day  of  the  quarter 
following any quarter for which  supplemental  benefits  are  first  paid  or 
ordered to be paid.
  (3) A carrier, second injury fund, or self-insurers’ security fund may make 
subsequent application for reimbursement quarterly, but not later than 1 year 
after the closing date of  the  quarter  for  which  reimbursement  is  being 
requested.
  (4) A carrier, second injury fund, or self-insurers’  security  fund  shall 
submit a separate form 114  for  each  quarter  for  which  reimbursement  is 
requested. A quarter, as used in this rule, is based on a  calendar  year  as 
identified by the bureau on an annual basis.
  (5) Upon a proper showing of a claim for  reimbursement,  the  compensation 
supplement fund shall make payment within a reasonable time after the receipt 
of  the  claim.  The  compensation  supplement  fund  shall   normally   make 
reimbursement within 3 months after the receipt of form 114, unless a dispute 
arises.
  (6) For the purpose of these rules, "maximum benefit" means  the  statutory 
maximum for the year of injury upon which benefits  are  based;  2/3  of  the 
employee’s  average  weekly  wage  on  the  date  of  injury;   the   minimum 
compensation rate in effect on the date of injury; or a maximum  compensation 
rate established by bureau order. If an employee, or his or  her  dependents, 
is receiving maximum benefits as defined in this subrule,  there  will  be  a 
presumption that benefits are being paid under section 351 or 321 of the act.
  (7) A compensation supplement shall not be paid for any  of  the  following 
received by an eligible employee or dependent:
  (a) Benefits received for any period of disability before January 1, 1982.
  (b) Benefits received under an agreement to redeem  the  liability  of  the 
carrier.
  (c) A lump sum payment for remarriage under section 335 of the act.
  (d) Interest paid on benefits awarded by a magistrate.
  (e) Partial compensation paid under section 361(1) of the act.
  (8) In a case involving a lump sum advance payment,  supplemental  benefits 
shall not be part of the advance payment,  but  shall  continue  to  be  paid 
weekly.
  (9) In a case involving the carrier’s right to subrogation in a third-party 
recovery, the amount of supplemental benefits shall be based  on  the  weekly 
compensation rate that the employee would have been receiving on  January  1, 
1982.
  (10) If compensation supplement benefits have been paid and if the employee 
is later found to be entitled to total  and  permanent  disability  benefits, 
then the second injury fund shall reimburse the compensation supplement  fund 
for the appropriate amount of benefits paid by  the  compensation  supplement 
fund, and the second injury fund shall reimburse the carrier for the  balance 
of  benefits  that  would  have  otherwise  been  paid  by  the  compensation 
supplement fund.
  (11) If the second injury fund is paying differential benefits directly  to 
the injured employee and if the amount of  differential  benefits  increases, 
then  the  second  injury  fund  either  shall  reimburse  the   compensation 
supplement  fund  for  any  overpayment  of  monies  that  the   compensation 
supplement fund has already reimbursed the carrier  or  shall  reimburse  the 
carrier directly in cases where the compensation supplement fund has not  yet 
reimbursed the carrier.
  (12) If a case is on appeal over the issue of whether the injured  employee 
is totally and permanently disabled and if the claimant is receiving  70%  of 
the amount of differential benefits that would be owed if total and permanent 
disability is found to apply, the amount of supplement that  is  due  may  be 
reduced or offset by the 70% amount that is being paid.
  (13) If the compensation supplement fund has reimbursed a carrier  for  the 
supplemental benefits paid,  and  if  it  is  later  found  that  the  amount 
reimbursed included an overpayment, then  the  compensation  supplement  fund 
shall be entitled to recoupment of the  overpayment  from  the  carrier.  The 
carrier is entitled to recoup the overpayment from the employee.
  (14) Section 357 of the act  shall  not  be  applied  when  the  amount  of 
supplemental benefit,  as  provided  for  in  section  352  of  the  act,  is 
calculated for eligible employees whose date of  personal  injury  is  before 
July 1, 1968.
  (15) After the supplemental benefit has been computed  in  accordance  with 
section 352(1) of the act, based on the weekly  compensation  rate  that  the 
employee or dependent of a deceased employee is receiving or is  entitled  to 
receive on January 1, 1982, had the employee been receiving benefits at  that 
time, the supplemental benefit shall not be reduced or increased  by  changes 
to the weekly compensation rate that occur after January 1, 1982,  except  as 
provided in section 352 and in this rule.

  History:  1979 AC; 1980 AACS; 1984 AACS; 1986 AACS; 1998-2000 AACS.


R 408.32a  Medical benefits; reimbursement application.
  Rule 2a. (1) To be reimbursed for payments  made  in  accordance  with  the 
provisions of section 862(2) of the act, medical  benefits  shall  have  been 
required by the terms of an award and shall have been paid in accordance with 
section 315 of the act and the rules promulgated under section 315.
In providing benefits as required by section 862(2) of  the  act,  a  carrier 
shall require that the employee and the provider comply with the requirements 
of section 315 of the act and the rules promulgated under section 315.
  (2)  Reimbursement  shall  apply  only  to  cases  for  which  an   initial 
application for mediation or hearing is filed after  March  31,  1986,  under 
section 847 of the act. Claims shall be made on forms provided by the  bureau 
and sent  to  the  bureau  of  workers’  disability  compensation.  If  other 
insurance coverage is or was available to cover medical benefits  paid  under 
section 862(2) of the act, then the bureau will not make reimbursement.
  (3) Applications for reimbursement from the bureau shall be made  not  less 
than 30 days after the benefit amount is reduced  or  rescinded  by  a  final 
determination. An application for reimbursement shall be made not later  than 
1 year after a final  determination  is  entered  that  reduces  or  rescinds 
benefits.
  (4) Reimbursement from the bureau shall be consistent with benefits awarded 
in the magistrate’s decision. Reimbursement will only  be  made  for  medical 
benefits that  were  provided  between  the  bureau’s  mailing  date  of  the 
magistrate’s award and the mailing date of the  final  determination  of  the 
appeal or for a shorter period as specified in  the  award.  A  copy  of  the 
magistrate’s order and all subsequent  appellate  decisions  shall  accompany 
each request for reimbursement.
  (5) A copy of the medical bills, proof of payment,  and  a  medical  report 
with sufficient  documentation  to  demonstrate  that  the  medical  services 
provided fall  within  the  provision  of  the  magistrate’s  decision  shall 
accompany each request for reimbursement.  Proof  of  payment  shall  include 
certification from the carrier that it has paid  the  medical  bills  or,  if 
requested by the bureau, shall include a  receipt  from  the  provider  which 
shows that payment has been made.
  (6) Reimbursement shall not be paid if the claim was  redeemed  before  the 
final determination or if the carrier has not provided proper documentation.
  (7) The bureau shall not pay interest on reimbursable amounts.
  (8) If  the  bureau  determines  that  all  or  part  of  the  request  for 
reimbursement is not proper, then the bureau  shall  notify  the  carrier  in 
writing. If the carrier disputes the  determination,  then  it  may  file  an 
application for mediation or hearing.

  History:  1989 AACS; 1998-2000 AACS.


R 408.33   Disputed claims; late payment penalty.
  Rule 3. (1) On or before the fourteenth day after the employer  has  notice 
or knowledge of an alleged injury or death, a carrier and the  self-insurers’ 
security fund shall notify the bureau, on form  107,  if  the  right  of  the 
injured or dependent to compensation is disputed. If compensation  thereafter 
is paid, report it on form 701. A copy of form 107, notice of dispute,  shall 
be mailed or given to the injured employee.
  (2) The following subdivisions govern the administration and enforcement of 
the penalty provisions under section 801 of the act:
  (a) Under section 801(1) of the act, compensation shall  be  paid  promptly 
and directly to the person entitled to compensation. Weekly  benefits  become 
due and payable on the fourteenth  day  after  the  employer  has  notice  or 
knowledge of the disability or death. On that date,  all  compensation  which 
has accrued shall be paid. If  benefits  are  not  paid  within  30  days  of 
becoming due and payable, then the carrier shall pay to the  employee  $50.00 
per day for each day after 30 days that the benefits remain  unpaid,  not  to 
exceed $1,500.00.
  (b) If a case is in litigation and the defendant agrees to pay benefits  on 
a voluntary basis, then the magistrate shall specify the weekly  compensation 
rate, the period of time for which accrued  benefits  have  become  due,  and 
which medical bills shall be paid by the carrier as a result of the injury or 
disability. If the benefits agreed to are not paid within 30 days of the date 
the agreement is formalized by the magistrate, then the carrier shall pay  to 
the employee $50.00 per day for each day after  30  days  that  the  benefits 
remain unpaid, not to exceed $1,500.00.
  (c) Medical bills become due and payable on the day  the  carrier  receives 
the bill. If there is a dispute resulting in a delay in  paying  the  medical 
bills, then the carrier shall advise the employee and doctor of  the  reasons 
for the delay in writing. If there is no dispute and the bill remains  unpaid 
after 30 days, then the carrier shall pay to the employee $50.00 for each day 
after 30 days that the bill remains unpaid, not to exceed $1,500.00.
  (d)  The  travel  allowance  for   medical   examination,   treatment,   or 
rehabilitation is provided in R 408.45. The employee shall  be  notified,  in 
writing, of any dispute resulting in  a  delay  in  paying  travel  allowance 
payments. If the expenses are not paid within 30 days  of  the  date  of  the 
carrier’s notification, and if  the  expenses  are  not  disputed,  then  the 
carrier shall pay the employee $50.00 for each day after  30  days  that  the 
expenses remain unpaid, not to exceed $1,500.00.
  (e) Under section 801(4) of the act, an employer may be liable for all or a 
portion of the penalty provided in section 801(2) of the act. If there  is  a 
dispute between an employer and insurance carrier as to who is liable for the 
payment of the penalty, the carrier shall be liable for paying the penalties, 
but may be entitled to reimbursement from the employer.
  (f) Any employee who may be entitled to penalty payments under section  801 
of the act and who has not received the payments may apply by  notifying  the 
bureau in writing. A copy of the request shall be forwarded to  the  carrier. 
In all cases, the bureau of workers’ disability  compensation  shall  respond 
within a reasonable period of time and shall act, as it deems appropriate, to 
resolve any disputes involving the penalty provisions of section 801  of  the 
act. If a dispute continues beyond a determination by the bureau  or  if  the 
director believes there is a question of compliance with the  act,  then  the 
dispute may be set for a hearing under R 408.35. A party  to  a  dispute  may 
request a formal hearing before a magistrate.
  (g) A carrier shall pay any penalty amounts due an injured  employee  as  a 
result of the penalty provisions specified in section 801 of  the  act  in  a 
separate check. Penalty amounts are not a part of the basic benefits to which 
an employee is entitled for the purpose of loss or assessment.
  (h) Benefits, allowances, or bills are presumed paid within 30  days  if  a 
check is mailed within 27 days of becoming due and payable under these rules.

  History:  1979 AC; 1980 AACS; 1998-2000 AACS.



                             PART 2. HEARINGS

R 408.34   Petitions for hearing; small disputes.
  Rule 4. (1) In cases of  dispute  coming  under  the  jurisdiction  of  the 
bureau, any party may petition the bureau for relief. The  complaining  party 
shall file his or her petition (form 104A, 104B, or 104C) with the bureau  at 
its Lansing office. The bureau shall then serve the adverse party with a copy 
of the petition and, at the same time, notify the parties  of  the  time  and 
place of the initial hearing. The adverse party shall file his or her  answer 
to the petition with the bureau within 15 days after service and serve a copy 
of the answer on the complaining party.
  (2) In any case where the compensable disability of an injured employee  is 
undisputed and involves 1 or more disputed injury dates during the course  of 
employment with 1 or more employers, or during the course of employment  with 
1 employer who is insured by 1 or more insurance  carriers,  the  bureau  may 
direct compensation benefits to be paid at the maximum rate, as determined in 
section 351 of the act, with no dependents as provided  in  the  schedule  of 
benefits on the earliest or initial date of injury alleged. The  self-insured 
employer or insurance carrier that has the risk on the  earliest  or  initial 
date of injury shall make the payments. Payments shall continue  through  the 
mailing date of the decision of the  magistrate  and  shall  be  adjusted  in 
accordance with the decision unless an appeal is taken. If an appeal is taken 
section 862 of the act shall apply. The magistrate shall order  reimbursement 
where appropriate.
  (3) In apportionment cases that are tried involving a date of injury before 
January 1, 1981, the primary action is between  the  last  employer  and  the 
injured employee.  All  other  joined  employers  may  appear,  cross-examine 
witnesses, give evidence, and defend on the issue of  liability.  In  setting 
trial dates for such cases, only the convenience of  the  plaintiff  and  the 
last employer, or their attorney, shall be considered.
  (4) After attempting to resolve the  dispute  without  bureau  involvement, 
either party may request  the  director  to  schedule  a  conference  or  the 
director, on his or her own motion, may  schedule  a  conference  to  resolve 
small disputes. Parties involved in such disputes shall attend the conference.

  History:  1979 AC; 1984 AACS; 1998-2000 AACS.


R 408.35   Bureau compliance hearings.
  Rule 5. (1) If the director believes that there  has  not  been  compliance 
with the act, then the director may, on his or her own motion, give notice to 
the parties and schedule a hearing for the purpose of determining compliance. 
The notice shall contain a statement of the matter to be considered.
  (2) If a matter that is alleged to be grounds for a hearing  in  accordance 
with this rule is brought to the attention of the bureau, then  the  director 
or his  or  her  authorized  representative  shall  review  the  evidence  of 
noncompliance with the act that is presented and, after making  inquiries  or 
investigations that he or she deems appropriate, determine if  a  hearing  in 
accordance with this  rule  is  necessary.  The  parties  involved  shall  be 
notified within 30 days of a receipt of the request as to the time  and  date 
of hearing or the reasons for denial.
  (3) The bureau shall schedule a hearing within a reasonable  time,  subject 
to the availability and  schedules  of  hearing  personnel  and  the  parties 
involved.
A request for a  hearing  under  this  rule  shall,  at  a  minimum,  contain 
sufficient information to warrant investigation or inquiry into a matter. The 
request for hearing shall  include,  but  is  not  limited  to,  all  of  the 
following information:
  (a) Facts and law involved in the  alleged  failure  to  comply,  including 
names, dates, amounts, or other pertinent information.
  (b) A description of the redress or other specific  action  requested  with 
specific references to sections of the act allegedly not complied with.
  (4) The director shall issue an order on the hearing  in  which  compliance 
may be ordered.
  (5) Any order of the director under this rule may be appealed to the  board 
of magistrates within 15 days after the order is mailed to  the  parties.  If 
the order is not appealed within 15 days after mailing, then the order of the 
director is final. The board of magistrates shall conduct a  hearing  on  the 
appeal within 60 days of the date of appeal to the board of magistrates.

  History:  1979 AC; 1984 AACS; 1998-2000 AACS.


R 408.36   Service of papers.
  Rule 6. Service of all petitions, papers, notices, and orders  shall  be in 
accordance with the following:
  (a) Service of all original petitions  for  hearing   under   R   408.34(1) 
shall be by the bureau on each named party to the case at the time service is 
made.
  (b) Service of any subsequent petitions or motions filed   on   a   pending 
contested case which may alter the parties to  a  case  shall   be   by   the 
bureau. The bureau shall serve all new parties  but  may   serve   only   the 
attorney for each previously named party. Parties not  represented  by  legal 
counsel shall be served directly. The bureau  may   request   the   necessary 
papers, notices, and postage to be provided by the moving party.
  (c) Service of any subsequent petitions or motions filed   on   a   pending 
contested case which do not alter the parties to a case may be  made  by  the 
moving party upon the adverse  party.  The  moving  party   shall   only   be 
required to serve the attorney for each previously named  party.  Any   party 
not represented by legal counsel shall be served   directly.   The   original 
petition or motion and proof of service shall be filed with the bureau.
  (d) Notices mailed by the bureau after service of  the  original   petition 
for hearing shall be served upon the attorney for each   named   party.   Any 
party not represented by legal counsel shall be served   directly.   If   the 
notice requests or requires the appearance or action of  a  specific   party, 
that party shall also be served.
  (e) Decisions or orders issued by the bureau  shall  be   mailed   to   all 
parties or may be served personally on the date  of   hearing.   All   mailed 
decisions shall be served from the  Lansing  office  or   from   such   other 
bureau offices as designated by the director.  Upon   mailing   or   personal 
service, the original order  and  copies  shall  show  a   mailed   date   or 
acknowledgement of personal service on their face,  from   which   date   the 
appropriate appeal period shall run. The mailed or  personal   service   date 
shall be considered the filed date for the order.
  (f) Service of all other papers, unless otherwise directed by  law,  may be 
made by mail by the moving party upon the adverse party  and  proof  of  such 
mailing shall be prima facie evidence of such service. Proof of  such service 
shall be filed with the bureau.
  (g) Service of all papers under this rule upon  employers  whose  liability 
under the act is not insured according to the records of   the   bureau,   or 
who have not been granted the privilege of  self-insurance,   shall   be   by 
certified mail with a return  receipt  requested.  Filing   of   the   return 
receipt shall be prima facie proof of service.

  History:  1979 AC; 1984 AACS.


R 408.37   Rescinded.

  History:  1979 AC; 1998-2000 AACS.


R 408.38   Application for advance payment of compensation.
  Rule 8. An applicant shall submit an application  for  advance  payment  of 
compensation on form 108. If the carrier, second injury fund,  self-insurers’ 
security fund, or silicosis and dust disease  fund  refuses  to  approve  the 
application, then the matter shall be set for hearing  to  determine  whether 
the application should be approved. A  carrier,  second  injury  fund,  self- 
insurers’ security fund,  or  silicosis  and  dust  disease  fund  shall  not 
approve, and a magistrate shall not order an advance payment of  compensation 
to a minor dependent until a legal guardian has been appointed.

  History:  1979 AC; 1998-2000 AACS.


R 408.39   Redemptions.
  Rule 9. An agreement to redeem the liability of the carrier, second  injury 
fund, self-insurers’ security fund, or silicosis and dust disease fund  shall 
be submitted on form 556, agreement to redeem liability. The agreement  shall 
be accompanied by a  report,  approved  by  the  employee,  from  a  licensed 
physician stating, in detail, the findings of a recent examination.

  History:  1979 AC; 1998-2000 AACS.


R 408.40   Stoppage, reduction, or suspension of compensation.
  Rule 10. (1) If compensation is being paid under an order or award  of  the 
magistrate or workers’ compensation appellate commission,  then  compensation 
shall not be discontinued or reduced without a further order or award, except 
as provided in subrules (3) and (4) of this rule and sections  301(5)(b)  and 
361(1) of the act. A petition to stop compensation shall include both of  the 
following:
  (a) Proof of payment of compensation to within 15 days of the date  of  the 
filing of a petition to stop compensation.
  (b) An  affidavit  stating  that  the  employee  has  returned  to  gainful 
employment and substantially describing the nature of the  employment,  or  a 
signed statement from a physician stating that the employee is able to return 
to employment.
  (2) The bureau shall schedule a hearing  within  30  days  of  receiving  a 
petition to stop compensation, and an order shall be entered under R 408.36.
  (3) If a letter that carries a compensation check is returned by the United 
States post office unopened, and if a diligent search has been made  for  the 
party to whom compensation payment is due under the  terms  of  an  order  or 
award, then the party liable for payment may suspend payment upon  filing  an 
affidavit that the check was returned and  a  diligent  search  was  made  to 
locate the party. The suspension shall not  prejudice  the  reinstatement  of 
suspended payments.
  (4) Upon filing of the report required by R 408.31(6)(d)  and  notification 
to an employee, compensation benefits may be reduced in accordance  with  the 
act for changes in dependency and age 65 reductions.

  History:  1979 AC; 1980 AACS; 1998-2000 AACS.


R 408.40a  Rescinded.

  History:  1979 AC; 1998-2000 AACS.

  Editor's note:  Former R 408.40a, pertaining to  pre-trial  procedure,  was 
rescinded by 1954 ACS 65. For history of the rescinded  rule,   see   1970-71 
AACS.


R 408.40b  Appearances at mediation conferences.
  Rule 10b. (1) In a contested case, in a hearing district designated by  the 
director, the parties or their attorneys shall appear personally  before  the 
bureau at a mediation conference  at  a  date  and  place  scheduled  by  the 
director.
Failure of the petitioner or his or her attorney to appear in a timely manner 
and participate in a mediation conference may result in the  application  for 
mediation or hearing being deemed to have been  voluntarily  withdrawn  under 
section 205 of the act. Failure of the defendant or its attorney to appear in 
a timely manner and participate in a mediation  conference  may  subject  the 
defendant to being charged immediately under R 408.35 for noncompliance  with 
the act. A party  that  fails  to  appear  and  participate  in  a  scheduled 
mediation  conference  shall  obtain  the  dates  for  any  future  mediation 
conferences or hearings scheduled.
  (2) The bureau may require any information from the  parties  that  may  be 
necessary to monitor the progress  of  the  case,  assist  in  the  voluntary 
exchange of information between parties, and  facilitate  the  scheduling  of 
cases.
  (3) If the parties agree to compromise the dispute  by  voluntary  payment, 
the terms of such payment shall be specified on the  voluntary  payment  form 
signed by both parties and the mediator. If the benefits agreed  to  are  not 
paid within 30 days of the date the agreement is personally served or  mailed 
by the mediator, then the carrier shall pay  to  the  employee  penalties  in 
accordance with section 418.801 of the act.

  History:  1979 AC; 1984 AACS; 1998-2000 AACS.


R 408.40c  Rescinded.

  History:  1979 AC; 1998-2000 AACS.


R 408.40d  Rescinded.

  History:  1979 AC; 1984 AACS; 1998-2000 AACS.


R 408.40e  Rescinded.

  History:  1979 AC; 1998-2000 AACS.


R 408.40f  Rescinded.

  History:  1979 AC; 1998-2000 AACS.


R 408.40g  Rescinded.

  History:  1979 AC; 1984 AACS; 1998-2000 AACS.


R 408.40h  Rescinded.

  History:  1980 AACS; 1998-2000 AACS.


                             PART 3. INSURANCE

R 408.41   Notice of insurance.
  Rule 11. Every notice of issuance of a  workers'  disability   compensation 
insurance policy shall be reported to the bureau on   form   400,   insurer's 
notice of issuance of policy. If the employer is a  partnership,  the  notice 
shall state the names and addresses of all the partners. If  the  employer is 
doing business under an  assumed   name,   the   notice   shall   state   the 
assumed name and each Michigan location covered.  If  the   employer   is   a 
corporation doing business through a number of divisions,  the  notice  shall 
state the names of all the divisions of the corporation. The bureau  shall be 
notified when any insurance company receives  a  change  of  address  of   an 
insured.

  History:  1979 AC; 1980 AACS.


R 408.41a  Termination of insurance.
  Rule 11a. A notice of termination  of  the  liability   of   an   insurance 
company on a policy covering the risk of an employer under the  act  shall be 
reported to the bureau on form 401, notice of termination of liability.
A copy of the notice shall be mailed to the employer. If the  employer  is  a 
partnership, the notice shall state the names and  addresses   of   all   the 
partners. If the employer is doing business under  an   assumed   name,   the 
notice shall state the assumed name and the names  of   all   parties   doing 
business under the assumed name. If the employer is   a   corporation   doing 
business under a number of divisions, the notice shall state  the  names   of 
all the divisions of the corporation. If a business  changes   names   notice 
shall  be  given  stating  both  the  new  and  former   names.   Notice   of 
termination of a policy which has expired shall not be  reported   when   the 
insurance carrier has accepted responsibility under a  further   or   renewal 
policy, except for an assured's name change.

  History:  1980 AACS.


R 408.41b  Notice of election to be excluded as employees under act.
  Rule 11b. A notice of election to be excluded under section 161(4)  of  the 
act shall be reported to the bureau on form 337,  notice  of  exclusion.  The 
employer shall have the notice notarized. If the employer is a partnership or 
corporation, then the notice shall state the names of  all  the  partners  or 
corporate officers. If the employer is doing business under an assumed  name, 
then the notice shall state the  assumed  name  and  each  Michigan  location 
covered.
The employer shall certify that the employees signing the exclusion  comprise 
all of the employees of the employer.  The  employer  shall  further  certify 
that all employees are eligible to be excluded under section 161(2) or (3) of 
the act. Each employee shall furnish his or her social  security  number  and 
certify that the employee voluntarily signed the election to be excluded. The 
employer shall furnish its federal identification number. The employer  shall 
furnish each employee with a copy of  the  completed  exclusion  form  before 
filing the form with the bureau. The exclusion shall  become  effective  upon 
receipt of the notice of exclusion by the bureau.

  History:  1987 AACS; 1998-2000 AACS.


R 408.41c  Notice of election to terminate exclusion as employees under act.
  Rule 11c. Every notice of election to terminate an exclusion from  coverage 
previously filed under section 161(4) of the act shall  be  reported  to  the 
bureau on form 338, notice to terminate exclusion. The  employer  shall  have 
the notice notarized. The notice shall state the reason for  terminating  the 
exclusion. The notice to terminate exclusion shall certify that all employees 
and the employer signing the notice to terminate exclusion  have  received  a 
copy of the completed notice to terminate exclusion before filing the  notice 
with the bureau. The employer shall furnish its federal identification number.
The termination of exclusion shall become effective not later  than  20  days 
after the notice to terminate exclusion is  received  by  the  bureau.  If  a 
carrier is providing coverage at the time the notice to  terminate  exclusion 
is filed, or assumes coverage during the 20-day period, then  the  notice  to 
terminate exclusion shall become effective on the date  the  carrier  assumes 
coverage.

  History:  1987 AACS; 1998-2000 AACS.


R 408.42   Application  for  specific  risk  insurance  policy  to   cover   
specified construction site.
  Rule 12. An applicant  may  make  written  application  to  the  bureau  of 
workers’ disability compensation for permission to  obtain  a  specific  risk 
insurance policy to cover all employers  on  a  specified  construction  site 
where the cost of construction will  be  more  than  $65,000,000.00  and  the 
contemplated completion period will be 5 years or less. The application shall 
give sufficient detail to specify the location of the  proposed  construction 
site, a breakdown of the total cost, and the contemplated  completion  period 
for the construction. After considering the application  and  all  supportive 
data, the bureau shall either grant approval  or  advise  the  owner  of  the 
requirements to be met before approval is granted.  The  applicant  shall  be 
given 30 days from the receipt of the bureau’s notice in which to comply with 
the requirements of the bureau. The approval for a specific  risk  policy  is 
not effective until the bureau has received proof that  all  requirements  of 
the bureau for issuance of a  specific  risk  policy  to  cover  a  specified 
construction site have been met. The applicant,  at  the  discretion  of  the 
director, may be  granted  additional  time  to  meet  the  requirements  for 
approval of a specific risk policy. A request for an extension of time  shall 
be made in writing within the 30-day compliance period. If  the  bureau  does 
not receive proof that all requirements for the approval of a  specific  risk 
policy for a specified construction  site  have  been  met  within  the  time 
prescribed, then the application shall be considered withdrawn.

  History:  1979 AC; 1980 AACS; 1998-2000 AACS.


R 408.42a  Notice of insurance; specified construction site insurance policy.
  Rule  12a.  If  an  insurance  policy  is  issued  to  cover  a   specified 
construction site where the cost  of  the  construction  will  be  more  than 
$65,000,000.00 and the contemplated completion period  will  be  5  years  or 
less, then the insurers shall notify the bureau on  a  form  400a,  insurer’s 
notice of issuance of specific risk  policy,  of  the  date  upon  which  the 
employer became subject to the specific insurance policy. If the employer  is 
a partnership, then the notice shall state the names and addresses of all the 
partners. If the employer is doing business under an assumed name,  then  the 
notice shall state the assumed name  and  the  names  of  the  parties  doing 
business under the assumed name. If  the  employer  is  a  corporation  doing 
business through a number of divisions, then the notice shall state the  name 
of the employer and the divisions that are covered under  the  specific  risk 
policy. The specific risk carrier shall notify the bureau when  the  specific 
risk carrier receives a change of address for the employer.

  History:  1980 AACS; 1998-2000 AACS.


R 408.42b  Termination  of  insurance;  specified   construction    site    
insurance policy.
  Rule 12b. A notice of termination for coverage  of  an  employer  under  an 
insurance policy covering  the  specified  construction  where  the  cost  of 
construction will be more than $65,000,000.00 and the contemplated completion 
period will be 5 years or less, shall be reported to the bureau on form 401a, 
notice of termination of liability for employer under specific risk policy.
The insurer shall mail a copy of the notice to the employer. If the  employer 
is a partnership, then the notice shall state the names and addresses of  all 
the partners. If the employer is doing business under an assumed  name,  then 
the notice shall state the assumed name and the names of  all  parties  doing 
business under the assumed name. If  the  employer  is  a  corporation  doing 
business under a number of divisions, then the notice shall state the name of 
the employer and the divisions of the corporation covered by the termination. 
If the business changes names, then notice shall be given  stating  both  the 
new and former names. Notice of termination of a  policy  which  has  expired 
shall  not  be  reported  when  the  specific  risk  carrier   has   accepted 
responsibility under a further or renewal policy,  except  for  an  assured’s 
name change. The termination  notice  shall  be  filed  with  the  bureau  of 
workers’ disability compensation at Lansing, Michigan, not less than 20  days 
before the effective date of any termination or cancellation  of  the  policy 
with respect to the employer. The notice shall give the date  of  termination 
or cancellation of the contract or  policy  with  respect  to  the  employer. 
Termination or cancellation of the specific risk policy  takes  effect,  with 
respect to the employees of the insured employer, 20 days after notice  of  a 
proposed termination or cancellation is received by the  bureau  of  workers’ 
disability compensation.

  History:  1980 AACS; 1998-2000 AACS.


R 408.43   Employer self-insured application; combinable entities.
  Rule 13. (1) An employer  who  applies  for  the  authority  to  become  an 
individual self-insurer shall apply to the bureau on form 402.
  (2) The initial and annual renewal application shall contain answers to all 
questions, shall include all requested supporting information,  as  directed, 
and shall be sworn to by an authorized representative of the  employer  whose 
signature is notarized.
  (3) Separate legal entities may be self-insured under a single authority if 
they are majority-owned by the self-insured entity submitting the application 
or if the same person or group of persons owns a majority  interest  in  each 
entity on a single application. "Majority interest" of  a  corporation  means 
ownership of a majority of  the  voting  stock  or  authority  to  appoint  a 
majority of directors, if there is no voting stock. "Majority interest" of  a 
partnership means majority partnership interest by the same person  or  group 
of persons. "Majority interest" in a limited liability company means majority 
member ownership by the same person or group of persons.

  History:  1979 AC; 1980 AACS; 1984 AACS; 1998-2000 AACS.


R 408.43a  Employer  individual  self-insurer;  surety  bond  or  letter  of 
credit; consideration of employer in  business  less  than  5  years;  excess 
liability  Insurance;  required   guaranties;   claims   service   companies; 
self-administered claims.
  Rule 13a. (1) A nonpublic self-insurer may be required to furnish a  surety 
bond or letter of credit. The bureau will establish the amount of security at 
the time of initial application. The bureau  shall  review  the  adequacy  of 
security periodically. The bureau shall prescribe the format and language  of 
the bond or letter of credit. The bureau shall accept surety bonds only  from 
a surety writer authorized to transact security bond business in Michigan.  A 
surety bond shall provide for 60 days' notice of cancellation to the  bureau. 
Letters of credit are administered under R 408.43q.
  (2) An employer that is  in  business  less  than  5  years  shall  not  be 
considered  for  self-insured  authority  unless  its   workers'   disability 
compensation  liability  will  be  guarantied  by  a  parent  corporation  or 
combinable affiliated entity that has been in business not less than 5  years 
and that would qualify for self-insured authority in Michigan.
  (3) The bureau shall require  specific  excess  liability  insurance,  with 
policy limit and retention acceptable to the bureau, for  every  self-insured 
employer, unless the bureau, at its discretion, waives the requirement.   The 
bureau may require aggregate excess liability insurance  as  a  condition  of 
approval for a self-insured employer. Specific and aggregate excess liability 
insurance policies are accepted under R 408.43k.
  (4) Parent corporations shall guaranty  all  liability  incurred  by  their 
self- insured subsidiaries under the workers'  disability  compensation  act, 
unless the bureau, at its discretion, waives  the  requirement.   The  bureau 
shall prescribe the form and substance of the  guaranties.   The  bureau  may 
require employers, combinable  under  a  single  self-insured  authority,  to 
execute workers' disability compensation payment guaranties  as  a  condition 
for approval of the self-insured authority. The bureau  shall  prescribe  the 
form and substance of the guaranties.
  (5) A self-insurer approved under section 418.611(1)(a) of  the  act  shall 
contract with a claims  service  company  approved  by  the  bureau  under  R 
408.43m.The bureau may approve a self-insurer to  self-administer  claims  if 
the employer has all necessary systems, processes, and reporting capabilities 
and can demonstrate it has employed competent claims personnel with  Michigan 
workers' compensation adjusting experience.

  History:  1980 AACS; 1998-2000 AACS; 2007 AACS.


R 408.43b  Employer  individual   self-insurer;   compliance   with   bureau 
requirements; notice; additional time; certification; renewal application.
  Rule 13b. (1) If the bureau approves an initial application of an  employer 
to be an individual self-insurer, then the approval shall be in writing.  The 
approval letter shall contain the excess  liability  insurance  terms,  bond, 
letter of credit, and guaranties required by the bureau as a condition of the 
self-insured authority. The employer has 30 days  from  the  receipt  of  the 
bureau’s notice in which to comply with the requirements of the  bureau.  The 
self-insured authority shall  not  become  effective  until  the  bureau  has 
received proof  that  all  requirements  of  the  bureau  for  self-  insured 
authority have been met.
  (2) The  employer  may,  at  the  discretion  of  the  bureau,  be  granted 
additional time to meet the requirements for the self-insured authority.
An employer shall make a request for an extension of time in  writing  within 
the 30-day compliance period. If the bureau does not receive proof  that  all 
requirements for the self-insured authority have been  met  within  the  time 
prescribed, then the application shall be considered withdrawn.
  (3) The bureau will issue a letter certifying self-insured authority to the 
employer when  the  employer  meets  the  requirements  of  the  bureau.  The 
self-insured authority for all nonpublic employers expires on the  designated 
renewal date, which shall not be more than 12 months from the effective  date 
of the authority. A self-insured employer, excluding a public employer, shall 
submit a renewal application (form  402R)  and  requested  documents  to  the 
bureau 30 days before the expiration  of  the  self-insured  authority.  Upon 
receipt of a renewal application,  the  authority  shall  be  extended  until 
denied or approved for an additional 12 months. A self-insured authority  for 
a public  employer  is  continuous  from  the  initial  approval  date  until 
withdrawn by the employer or terminated by  the  bureau.  A  public  employer 
shall file a certificate confirming the  excess  liability  insurance  policy 
required as a condition of the self- insured authority  as  directed  by  the 
bureau and provide entity, location, and dba listings, with  addresses,  when 
changes occur subsequent to the initial approval. Upon  specific  request  by 
the  bureau,  a  public  employer  shall  submit  financial  data,   workers’ 
disability  compensation  loss  data  or  any  other  data  that  supports  a 
demonstration  of  its  ability  to  self-insure  its   workers’   disability 
compensation exposure. Public employers for the purposes of this subrule  are 
the same as defined in section 418.611(2) of the act.

  History:  1980 AACS; 1998-2000 AACS.


R 408.43c  Financial,  loss  experience  and  liability  exposure  analysis; 
notice of denial or termination.
  Rule 13c. (1) The bureau may decline to approve an application for, or  may 
terminate the self-insured authority if an employer is unable to  demonstrate 
a position of  reasonable  solvency  and  the  ability  to  pay  benefits  as 
prescribed in the  act.  The  bureau  analysis  of  each  nonpublic  employer 
application shall include a review of the employer’s financial  position  and 
operating results.
Standard  financial  ratio  analysis  and  comparison  to  similar   industry 
statistical data will be considered in the financial position analysis. Other 
information relevant to the applicant’s financial ability, including but  not 
limited to the following, will be considered:
  (a) The historical operating results.
  (b) Evaluation of financial trends.
  (c) Banking relations.
  (d) Contingent liabilities.
  (e) Pending litigation.
  (f) Corporate guaranties.
  (g) Management team continuity and experience.
  (h) General and specific industry economic conditions.
  (i) Legal structure.
The bureau’s  analysis  of  the  employer’s  loss  experience  and  liability 
exposure shall include but is not limited to the following:
  (a) Claims for not less than 3 policy years broken down by  paid,  reserve, 
and total incurred amounts.
  (b) Number of employees.
  (c) Payroll code classifications.
  (d) Excess liability insurance policy terms will be required and considered 
in the determination of financial ability.
  (2) The bureau shall mail notice of a denial or termination of self-insured 
authority to the employer. The notice shall include the grounds for denial or 
termination. The employer may request a hearing in  accordance  with  section 
418.611(5) of the act and R 408.43n.

  History:  1980 AACS; 1998-2000 AACS.


R 408.43d  Group self-insurers; application.
  Rule 13d. Application for group coverage, as contemplated in section 611 of 
the act for the express purpose of establishing a group  self-insurers' fund, 
to be administered under  the  direction  of  an  elected  board  of trustees 
and to provide workers' compensation  coverage  for   a   group   of  private 
employers in the same industry or for public employers of the  same  type  of 
unit, shall be made to the bureau. The application shall  be  made on a  form 
prescribed by the  bureau  and  shall  contain  answers  to   all  questions. 
Answers shall be given under oath.

  History:  1980 AACS.


R 408.43e  Group   self-insurers;   new     and     renewal     application 
requirements.
  Rule 13e. (1) A new application, as submitted by the   initial   board   of 
trustees of the self-insurer's fund, shall be accompanied by   all   of   the 
following:
  (a) A copy of the approved bylaws of the  proposed   group   self-insurers' 
fund.
  (b) An original signed individual member  application   approved   by   the 
board of trustees for each member of the group applying   for   coverage   in 
the fund.
  (c)  A  current  financial  statement  of  each  member   of   a    private 
self-insurers' group that, taken collectively, shows both of the following:
  (i) The combined net assets of all members applying for  coverage  on   the 
inception date of the fund, which shall not be less than $1,000,000.00.
  (ii) Working capital, which shall be in an amount  that   establishes   the 
financial strength and liquidity of the business.
  (d) A  composite  listing  of  the  estimated  standard   premium   to   be 
developed by each member of the group  individually  and  in   total   as   a 
group.
  (e) Proof of payment by  each  member  of  not  less  than   25%   of   the 
estimated annual standard premium into a designated depository.
  (f) An excess insurance policy which is issued by an authorized  carrier in 
an amount acceptable to the bureau and  which  is  in  compliance  with   the 
requirements set forth in R 408.43k.
  (g) A copy of a signed service agreement  that   designates   an   approved 
service company.
  (h) A copy of the current contract or agreement between  the  trustees  and 
the administrator if one is used.
  (i) Proof of a fidelity policy in a form and amount   acceptable   to   the 
bureau.
  (j) If required, a surety bond written by an authorized  carrier  or  other 
security in a form and amount acceptable to the bureau.
  (k) In the case of a private employer's group,   an   indemnity   agreement 
jointly and severally binding the group and each member of   the   group   to 
comply with the provisions of  the  act.  The   indemnity   agreement   shall 
conform to an indemnity agreement as approved by the bureau.
  (l) A breakdown of all rates by code classification that will  be  used  by 
the group fund to develop final audited premium, including  an  exhibit  that 
shows all administrative expenses  as  a  percentage   of   estimated   final 
audited premium  and  loss  fund  developed  under   the   aggregate   excess 
contract as a percentage of final audited premium.
  (m) The trustees shall provide proof, satisfactory to  the   bureau,   that 
the annual gross premiums of the fund will be not less  than  $500,000.00.
The premium collected from each member shall be based   upon   applying   the 
appropriate manual rates per payroll code classification   as   approved   by 
the bureau and  the  excess  carrier.  The  premium   collected   from   each 
participant in a group self-insurance program  shall  be   adjusted   by   an 
experience modification formula approved by the bureau.  The  total   premium 
collected from all participants shall be sufficient to fund  the  loss   fund 
developed under the excess insurance contract and  the  total  administrative 
expenses of the group  fund.  A  written  excess   insurance   policy   shall 
confirm that the rate structure proposed by the  aggregate   excess   insurer 
will be used by the  group  fund  to  develop  the  loss   fund   under   the 
aggregate excess contract. The loss fund shall be  75%   of   final   audited 
premium or as approved by the bureau.
  (n) Proof, satisfactory to the bureau, shall be provided  to   prove   that 
the fund has, within its own organization, ample  facilities  and   competent 
personnel to service its own program with respect  to  underwriting   matters 
and loss control services or the fund  shall  contract   with   an   approved 
service company to provide the services. An approved service company shall be 
used to handle claims adjusting and   reporting   of   loss   data   to   the 
bureau.
  (2) Each group fund shall submit a renewal application to  the  bureau   30 
days before the expiration of the self-insurance  privilege,  together   with 
the terms of renewal for the excess insurance contract.   Upon   receipt   of 
the renewal application, the self-insurance privilege   shall   be   extended 
until it has been acted upon by the director.  The   application   shall   be 
accompanied by all of the following:
  (a) Evidence  of  the  financial  ability  of  the  group   to   meet   its 
obligations under the act.
  (b) Confirmation of an excess insurance policy which  is   issued   by   an 
authorized carrier in an amount acceptable to the bureau and  which   is   in 
compliance with the requirements set forth in R 408.43k.  With  the  approval 
of the director and after meeting all requirements the  director  imposes,  a 
group self-insurance fund may use a letter of credit in  place  of  aggregate 
excess insurance if the fund gives the bureau 6 months' notice of its  intent 
to use a letter of credit.
  (c) A copy of a signed service contract  which   designates   an   approved 
service company, which provides for claims administration  and  reporting  of 
loss data to the bureau, and  which  may  include   underwriting   and   loss 
control services, unless approval has been granted to self-administer claims.
  (d) Proof of a fidelity policy in a form and amount   acceptable   to   the 
bureau.
  (e) A breakdown of all rates by code classification that will  be  used  by 
the group fund to develop  final  audited  premium.   If   aggregate   excess 
insurance is required by the bureau, the rates used by the  fund  to  develop 
final audited premium shall be the rates  used  by   the   aggregate   excess 
insurer and shall be included  as  an  exhibit  to   the   aggregate   excess 
insurance policy. In addition, an exhibit that   shows   all   administrative 
expenses as a dollar amount and a percentage of   estimated   final   premium 
and the loss fund developed under  the  aggregate  excess   contract   as   a 
percentage of final audited premium shall be provided.
  (f) A copy of the current contract or agreement between  the  trustees  and 
the fund administrator, if one is used.
  (g) Proof provided by the trustees that  the  premium  collected  from each 
member shall be based upon applying the appropriate manual rates  per payroll 
code classification as approved  by  the  bureau  and  the  excess  insurance 
carrier or consulting actuary. Each member's  premium  shall   be  experience 
rated. The experience modification formula shall be approved by  the  bureau. 
The total premium collected from  all  participants  shall  be sufficient  to 
fund all administrative expenses and the estimated loss fund developed  under 
the excess insurance contract. The loss fund shall be  75% of  final  audited 
premium or as approved by the  bureau.  If  a  letter  of credit is  used  in 
place of aggregate  excess  insurance,  the  fund  shall  collect  sufficient 
premiums to fund the  ninetieth  percentile  confidence level  of   losses,   
as   calculated   by   a   consulting   actuary,   and    all  administrative 
expenses. If a public employer  group  fund  operates  with  specific  excess 
insurance only, the fund  shall  collect  sufficient  premiums  to  fund  the 
ninetieth  percentile  confidence  level  of  losses,  as  calculated  by   a 
consulting actuary, and all administrative expenses of the fund.
  (h) If the  fund  intends  to  provide  underwriting   and   loss   control 
services, the fund shall provide proof that  the  fund  has ample  facilities 
and competent personnel to service the programs.
  (i) If the fund requests approval to self-administer claims,  then  all  of 
the following:
  (i) Proof that the fund has been in operation not less than 5 years.
  (ii) Proof that  the  fund  has  annual  collected  premium  of  more  than 
$10,000,000.00.
  (iii) A written document in which the fund agrees to all of  the  following 
provisions:
  (A)   The   fund   will   demonstrate   that   the   estimated   cost    of 
self-administration of the claims program will be  fully  funded  by  premium 
collections.
  (B) The fund will demonstrate that it has ample  facilities  and  competent 
staff, including licensed adjusters with workers' compensation qualifications 
under chapter 12 of Act No. 218 of the Public  Acts  of  1956,  as  amending, 
being S500.1201 et seq. of the Michigan Compiled Laws, who will  be  handling 
the workers' compensation claims.
  (C) That  the  claims-handling  function  will  be  subject  to  an  annual 
independent audit of all established cases and  operational  processes.   The 
independent auditor will meet guidelines established by the bureau.
  (D) That annually, the fund administrator will provide a written  assertion 
to the  fund's  independent  certified  public  accountant  that  the  fund's 
claim-paying function maintains an effective internal control structure  over 
financial reporting as of the fund's fiscal year end.  The fund's independent 
certified public accountant shall  issue  a  report  on  the  administrator's 
assertion  in  accordance  with  statements  on  standards  for   attestation 
engagements No. 2 (SSAE#2), as amended.
  (E) The group fund will furnish loss data  in  a  form  acceptable  to  the 
bureau and the excess carrier.
  (F) That failure to provide  accurate  and  timely  payment  of  claims  or 
failure to meet the requirements of self-administered claims  may  result  in 
termination of approval to self-administer claims.
  (G) That the excess insurer will provide documentation of its  approval  of 
the group fund's self-administration of claims.

  History:  1980 AACS; 1984 AACS; 1996 AACS; 1997 AACS.


R 408.43f  Group self-insurance; same   industry   requirement;   approval; 
review; certificate.
  Rule 13f. (1) After considering an application  for  group   self-insurance 
and all supportive data, the bureau shall either grant  approval  or   advise 
the trustees of the self-insurers' group of the  requirements   to   be   met 
before approval is granted. In determining whether private  employers  are in 
 the  same  industry,  the   bureau   may   use   the   standard   industrial 
classification codes assigned to each employer applying  for  membership   in 
the group. The bureau shall also consider all information  available  on  the 
nature of the business of each private employer and may  require  the   group 
fund to present additional evidence, either oral  or   written,   to   verify 
that all employers applying for membership in  the  group   fund   meet   the 
statutory requirement of being in the same industry. The   group   shall   be 
given 30 days from the receipt of the bureau's notice in  which   to   comply 
with the requirements of the bureau. The self-insured  authority  shall   not 
become effective until the bureau has received proof that all requirements of 
the bureau for self-insured approval have been met.
  (2) The group may,  at  the  discretion  of  the   director,   be   granted 
additional time to meet the requirements for the  self-insured   program.   A 
request for an extension of time shall be made in  writing   by   the   group 
within the 30-day compliance period. If the bureau does  not  receive   proof 
that all requirements for the self-insured program have   been   met   within 
the time prescribed, the application shall be considered withdrawn.
  (3) On new and renewal applications, the  bureau   may   require   evidence 
that the proposed rate for each  payroll  classification   is   adequate   to 
cover expected losses for that payroll classification   and   evidence   that 
the experience rating formula will be actuarially sound.  The  bureau   shall 
take all of the following factors into account   before   granting   approval 
for a group self-insurance program:
  (a) Past and anticipated losses.
  (b) Proper reserves for reported and unreported losses.
  (c) Past surplus and expected increase in benefit levels.
  (d) Administrative costs.
The bureau may contract with a consulting actuary, at the  expense   of   the 
group fund, to determine if the proposed group self-insurance program will be 
actuarially sound.
  (4) Upon meeting the requirements of the bureau, the group shall receive a  
formal  certificate  approving   its   status   as   a   self-insurer.    The 
certificate shall expire 12 months after the effective date  of  approval.

  History:  1980 AACS; 1984 AACS; 1996 AACS.


R 408.43g  Group self-insurers' admission of new  members;  termination  of 
individual members; notice; records.
  Rule 13g. (1) After the inception date  of  the   fund,   prospective   new 
members of the fund shall submit an  application  for   membership   to   the 
board of trustees, or its designated representative, on a  form  approved  by 
the bureau. The board of trustees or  its   designated   representative   may 
approve the application for membership pursuant to the bylaws  of  the  group 
self-insurers' fund. The original signed application  for  membership   shall 
then be filed with the bureau in Lansing.  Membership   shall   take   effect 
after approval by the bureau.
  (2) After a group fund has completed 1 year   of   operation,   application 
may be made to the director to authorize the  group  fund   to   accept   new 
members without prior bureau approval. The application shall be  submitted on 
forms provided by the bureau and shall define all businesses  that   will  be 
accepted in the same industry  within  the  group.  The   application   shall 
define the financial standards that  will  be  applied  by   the   group   in 
accepting new members.
  (3) If approved, the group shall submit confirmation   of   membership   to 
the bureau on form 650, group self-insurance fund notice  of  acceptance   of 
membership, together with a copy of the  individual  membership   application 
and the financial report provided by the member.  If  the   employer   is   a 
partnership, the notice shall state the names and  addresses   of   all   the 
partners. If the employer is doing business under  an   assumed   name,   the 
notice shall state the assumed name and each Michigan  location  covered.  If 
the  employer  is  a  corporation  doing  business  through   a   number   of 
divisions, the notice shall state the names of all the   divisions   of   the 
corporation. The bureau shall be notified when any group  fund   receives   a 
change of address of a member.
  (4) Individual members may elect to terminate their  participation   in   a 
group self-insurers' program or be subject to cancellation   by   the   group 
pursuant to  the  bylaws  of  the  group  fund.   However,   termination   or 
cancellation shall take place not less than 20 days after  the   bureau   has 
received notice of the termination or cancellation  from   the   group   fund 
reported to the bureau on form 651, group self-insurance   fund   notice   of 
termination of membership. If the employer is a   partnership,   the   notice 
shall state the names and addresses of all the partners. If  the  employer is 
doing business under an  assumed   name,   the   notice   shall   state   the 
assumed name and the names of all parties doing business  under  the  assumed 
name. If the employer is a corporation doing business under   a   number   of 
divisions, the notice shall state the names of all the   divisions   of   the 
corporation. If a business changes names, notice shall   be   given   stating 
both the new and former names.
  (5) The chairman  of  the  board  of  trustees  or,   at   the   chairman's 
designation, the administrator shall be responsible   for   maintaining   all 
records of the  fund.  The  fund  shall  maintain  all   of   the   following 
documents with respect to records:
  (a) Forms 100, 101, 102, 701, and 107.
  (b) Redemption papers.
  (c) Excess workers' compensation policies.
  (d) Spreadsheets containing premium audit summaries.
  (e) Contracts with the group's claims service and administrator.
  (f) A complete set of claim loss runs as of the end of each fiscal year.
  (g) Certified audit reports.
  (h) Minutes of trustee and annual meetings.
  (i) Group renewal applications and related documents.
  (j)  Individual  membership  applications   containing   signed   indemnity 
agreements.
The records shall  be  retained  for  not  less  than  30   years   and   the 
administrator or board of trustees shall know the location of the  records at 
all times. All records of the fund are the  property  of  the  fund.  If  the 
records  are  held  by  the  funds  service  company,   the   records   shall 
immediately be surrendered to the fund upon the fund's request.

  History:  1980 AACS; 1984 AACS; 1996 AACS.


R 408.43h  Group self-insurance; reports and filings.
  Rule 13h. (1) The group shall make all  reports  and  filings  required  of 
carriers  by  the  act.   In addition, the group fund shall  comply with  all 
of the following provisions:
  (a) The financial position of the group fund shall be  reported,   by   the 
trustees or their designated representative, on a quarterly  basis  for  each 
open fund year. The report is due within 30 days after the  quarter  ends.
The format for the report may be prescribed by the  bureau.   A   fund   year 
shall be considered open as long as there are unsettled  claims.  The  annual 
financial statements shall be audited by a certified  public  accountant  and 
filed with the bureau within 180 days after the fund year ends.  If  a   fund 
ceases to provide coverage on an ongoing basis,  annual   audited   financial 
statements shall be provided to the bureau within 180 days of  the   end   of 
the fund's fiscal year.
  (b) The fund shall file summary loss data, in a  manner prescribed  by  the 
bureau, on each fund  year  within  30  days  after  the evaluation date.
Losses shall be evaluated on a monthly basis or as required by the bureau.
  (c) The fund shall file a copy of the minutes of all trustee meetings  with 
the bureau within 30 days after the meeting.
  (d) The fund  shall  provide  reports  or  filings   on   payroll   audits, 
investments,  experience rating, or any other   information  concerning   the 
group fund upon specific request of the bureau.
  (e) An authorized representative of  the  fund  shall  sign  All  financial 
reports and minutes submitted.
  (2) A fund that fails or refuses to file the reports  specified   in   this 
rule within the time limits prescribed may be notified that its  authority to 
 be  self-insured  will   be   terminated.   If   a   fund's   authority   is 
terminated, then the fund shall be notified of the grounds for termination.
The fund may request a hearing in accordance with R 408.43n.

  History:  1980 AACS; 1984 AACS; 1996 AACS; 1997 AACS.


R 408.43i  Group self-insurer's fund; board of trustees' power  and  duties; 
investment restrictions.
  Rule 13i.  To ensure the financial stability of each  group  self-insurers' 
fund, a board  of  trustees  of  each  fund  shall  be  responsible  for  all 
operations of the fund. A board of trustees  shall  be  a  group  of  members 
elected by the membership of the  fund  for  stated  terms  of  office.   The 
majority of the trustees shall be owners  or  employees  of  members  of  the 
self-insurers' fund, but a  trustee  shall  not  be  an  owner,  officer,  or 
employee of a service company. The board of trustees of each fund shall  take 
all necessary precautions to safeguard the assets of the fund, including  all 
of the following:
  (a) Designate a trustee as administrator or, in the  alternative,  hire  an 
employee or designate an individual to act as the group  fund  administrator. 
The trustees may delegate to the  administrator  the  duties  they  determine 
proper. The duties may include, but are not limited to,  advising  the  board 
with regard to any of the following:
  (i) Contracting with a service company.
  (ii) Determining the premium charged.
  (iii) Investing surplus monies, subject to the restrictions  set  forth  in 
this rule.
  (iv) Accepting applications for membership.  However, the board of trustees 
remains the responsible party for the  operation  of  the  fund.  The  duties 
delegated to the administrator  and  all  compensation  to  be  paid  to  the 
administrator shall be reduced to writing, and a copy shall  be  provided  to 
the bureau with  each  annual  group  renewal  application.  The  group  fund 
administrator shall not be an  owner,  officer,  or  employee  of  a  service 
company. The trustees shall purchase a  fidelity  policy  covering  the  fund 
trustees, administrator, employees of the fund, and the service company in an 
amount sufficient to protect the assets of the fund.  A copy of the  fidelity 
policy will be provided to the bureau with each annual renewal.
  (b) Limit disbursements to payment and  expenses  of  handling  claims  and 
administrative expenses necessary for  operating  the  fund.   The  board  of 
trustees shall also establish necessary accounts  and  accounting  procedures 
for  control  and  accurate  financial  reporting.   Established   accounting 
procedures shall provide accurate financial information for  each  open  year 
individually with respect to revenue and expense until  the  year  is  closed 
out. The board of trustees  shall  maintain,  and  be  responsible  for,  all 
records and documents relating to the formation and ongoing operation of  the 
group self-insurance fund. If the board of trustees  does  not  maintain  the 
records in a responsible manner and in accordance with these rules, then  the 
self-insured approval of the fund may be terminated by the director.
  (c) Audit the accounts and records of the fund  annually  or  at  any  time 
required by the bureau. Audits shall be made by certified public  accountants 
or by authorized representatives of the  bureau.   The  bureau  reserves  the 
right to prescribe the type of audits to be made and the  uniform  accounting 
system to be used  by  the  self-insurers'  fund  to  enable  the  bureau  to 
determine the solvency of the group self-insurers' fund.  Copies of financial 
audits prepared by certified public  accountants  shall  be  filed  with  the 
bureau in Lansing within 180 days after the close of the  fund  year.   Claim 
reserve audits used in support of  surplus  distribution  requests  shall  be 
performed by auditors who meet the requirements of  the  bureau  relating  to 
independence, report content, and timing.
  (d) Not extend credit to individual members for payment of premium.
  (e) Apply a penalty rate in excess of the normal premium to any  risk  that 
has unfavorable loss experience, if the member and the bureau are notified in 
writing before the effective date of the change in rates.
  (f) Not utilize any of the monies collected as  premiums  for  any  purpose 
unrelated to workers' compensation. Further, the board of trustees shall  not 
borrow any monies from the fund or in the name of the fund  without  advising 
the bureau of the nature  and  purpose  of  the  loan  and  obtaining  bureau 
approval. The board of trustees may, at its discretion,  invest  any  surplus 
monies not needed for immediate cash needs,  but  the  investments  shall  be 
limited to United States government  bonds,  United  States  treasury  notes, 
United States government agency issues,  United  States  government-sponsored 
enterprises, investment share accounts in any savings  and  loan  association 
and credit unions that have their deposits insured by a federal  agency,  and 
certificates of deposit issued by a duly chartered commercial bank.  Deposits 
in savings and loan associations, credit unions, and commercial  banks  shall 
be limited to institutions in this state and shall not exceed  the  federally 
insured amount in any 1 account, except that the federally insured amount  in 
any 1 account in a commercial bank may be  exceeded  if  the  account  amount 
involved does not exceed either of the following factors:
  (i) Five percent of the combination of surplus and  undivided  profits  and 
reserves as currently reported for each bank in  the  state  in  the  banking 
division annual report of the financial institutions bureau of the department 
of consumer and industry service.
  (ii) Five hundred thousand dollars per institution.  A group self-insurance 
fund shall not invest in mutual  funds,  except  that  investments  in  money 
market mutual funds of short-term duration which invest  only  in  government 
agency issues, government-sponsored enterprises, and government bills, bonds, 
and notes will be allowed for short-term cash investment needs.  As  used  in 
this paragraph, "short-term duration" means 180 days or less.
  (g) The board of trustees of a group self-insurance fund,  subject  to  the 
limitations set forth in subdivisions (h), (i), and (j) of this subrule, may, 
in its discretion, and upon contracting with a bank trust department or  with 
a professional investment advisor registered with the securities and exchange 
commission under the investment advisors  act  of  1940,  15  U.S.C.  '80B-3, 
invest monies not needed for immediate cash  needs  in  corporate  bonds  and 
municipal bonds and common and preferred stock.
  (h) Limit the combined holdings of corporate and  municipal  bonds  to  not 
more than 45% of the market value of the  available  investment  portfolio.   
Corporate and municipal bonds must be (A) rated or better  by  at  least  two 
nationally recognized rating services. Not more than 5% of the corporate  and 
municipal bond portfolio may be invested in any 1 corporation or municipality.
  (i) Of the 45% of the market value of the  investment  portfolio  available 
for investment in municipal or corporate bonds, 25% may be invested in common 
or preferred stocks.  Common or preferred stocks shall be limited to publicly 
owned companies that trade on a United  States  regulated  exchange.   Mutual 
funds or bank pooled funds that invest in  common  or  preferred  stocks  are 
permitted and shall be calculated as part of the percentage of  market  value 
available for investment in common and preferred stocks.
  (j) Ensure that the professional investment advisor completes a  compliance 
review of the investment portfolio on a  quarterly  basis.   A  copy  of  the 
investment review shall be provided to the fund and the bureau within 30 days 
of the close of each quarter.   The  annual  financial  statements  shall  be 
audited by a certified public accountant and shall include a certification as 
to whether the  fund  has  been  in  compliance  with  the  requirements  for 
investments.  Failure to report on investments as required by this  rule  may 
result in withdrawal of the authority to invest in  corporate  and  municipal 
bonds and/or common and preferred stocks.
  (k) Any group fund found to have investments  in  vehicles  other  than  as 
provided by this rule shall be given 30 days or a time period approved by the 
director to divest  themselves  of  the  investments.  Failure  to  meet  the 
divestiture requirement may subject the  fund  to  further  sanction  by  the 
director.

  History:  1980 AACS; 1984 AACS; 1996 AACS; 1997 AACS; 2003 AACS; 2007 AACS.
 

R  408.43j  Group  self-insurers'  funds;   advance    premium    discounts; 
surplus monies; surplus investment income and premiums; unfunded claims.
  Rule 13j. (1) The trustees of any group self-insurers'   fund   shall   not 
authorize advance premium discounts to  any  member  in   excess   of   those 
authorized by the excess insurance underwriter and approved by the bureau.
If discounts are approved by the excess carrier and the  bureau,  the  excess 
carrier shall agree to base the loss fund on the  premium   collected   after 
discount.
  (2) Any surplus monies for a fund year in excess of the amount necessary to 
fulfill all obligations under the act  for  that  fund  year,   including   a 
provision for claims incurred but not reported,  may  be   declared   to   be 
refundable by the trustees at any time, and the amount  of  the   declaration 
shall be a fixed liability of the fund at the time of  the  declaration.  The 
date of payment shall be as agreed to by  the  trustees   and   the   bureau, 
except that monies not needed to satisfy the loss   fund   requirements,   as 
established by the aggregate excess contract, may  be  refunded   immediately 
after the end of the fund year with the approval of the bureau. The intent of 
this rule is to ensure that sufficient  monies  are  retained  so  that total 
assets are greater than total liabilities for each fund year.
  (3) If premiums collected and earned investment  income   associated   with 
any fund year are insufficient to completely fund all  reported  claims   and 
expenses for that year, unfunded amounts, by fund year,  shall  be   reported 
immediately to the bureau with the proposed plan to achieve 100%  funding.
The plan to achieve 100% funding for  all  claims  is   subject   to   bureau 
approval. A plan may include, but is not limited to, all of the following:
  (a) Use of premiums collected in other fund years, but  not  necessary  for 
payment of claims or expenses in the year collected.
  (b) Use of investment earnings associated with other fund  years,  but  not 
necessary for  payment  of  claims  or  expenses  in  the   year   in   which 
associated.
  (c) Assessment of members by order of the bureau.
  (4)  The  bureau  may  allow  investment  income  earned   by    a    group 
self-insurance fund during a calendar year to  be  returned   to   the   fund 
membership without prior bureau approval if the fund trustees provide  all of 
the following documentation:
  (a) Certification, to the bureau,  in  the  form  of  a   letter   from   a 
certified public accountant, attesting to the amount  of  investment   income 
earned during the calendar year.
  (b) Certification to the bureau, by the board of trustees, of the amount of 
the investment income and of   the   employers   to   whom   the   investment 
income is to be distributed.
  (c) Certification by the board of trustees  and   the   group's   certified 
public accountant that, after the distribution of  investment   income,   the 
aggregate retention in the current fund year, as determined  by  the  group's 
excess insurance carrier, and all administrative expenses   will   be   fully 
funded.
  (d) If the fund operates with specific excess insurance only or a letter of 
credit in place of aggregate excess insurance, the  board  of   trustees  and 
the group's certified  public  accountant  shall  certify  that,  after   the 
distribution of investment income,  ultimate  loss,  as   calculated   by   a 
certified actuary at  a  90%  confidence  level,   and   all   administrative 
expenses will be fully funded.
  (e) Certification by the board of  trustees  and   the   fund's   certified 
public accountant that the fund's financial statements  are  not   discounted 
and do not consider the time value of money.
The information specified in subdivisions (a) to (e) of this  rule  shall  be 
received by the bureau not earlier than December 1,  and   not   later   than 
December 31, of the calendar year in which the investment  income  is  earned 
and is to be distributed. If the information specified in this  rule  is  not 
received by the bureau in a timely manner, then the   bureau   may   withdraw 
the fund's privilege  of  returning  investment  income   to   fund   members 
without prior bureau approval.

  History:  1980 AACS; 1984 AACS; 1996 AACS.


R 408.43k  Aggregate excess liability  insurance;  specific  excess  liability 
insurance; individual self-insurer; group self-insurer.
  Rule 13k. The bureau shall not recognize a policy of aggregate or  specific 
excess liability insurance in considering the ability of  a  self-insurer  to 
fulfill its financial obligations under the act, unless the policy is  issued 
by a casualty insurance company authorized, as defined in section 108  of  PA 
218, MCL 500. to transact such business in  this  state.   The  policy  shall 
comply with all of the following provisions unless specifically waived by the 
bureau.  Policies issued that do not comply with all provisions of this  rule 
may be considered grounds for  termination  of  the  employer's  self-insured 
authority.
  (a) The policy shall not  be  cancelable  or  nonrenewable  unless  written 
notice, sent by courier, registered mail or certified mail, is given  to  the 
other party to the policy and to the bureau not  less  than  60  days  before 
termination by the party desiring to cancel or not renew the policy.
  (b) The policy shall contain no endorsements,  provisions,  or  terms  that 
increase the named insured or insureds retentions or increase the amount that 
must be paid by the named insured or insureds beyond the retentions  reported 
on the declarations page of  the  policy  and  the  Michigan  certificate  of 
specific/aggregate excess liability insurance.  This provision does not apply 
to customary policy language that may call  for  increased  payments  by  the 
insured or insureds for failure to act or abide by a policy provision.
  (c) A policy that has any type of commutation clause shall provide that any 
commutation  effected  under  the  policy  shall  not  relieve  the  casualty 
insurance company of further liability with respect to  claims  and  expenses 
unknown at the time of the commutation or in regard to any  claim  apparently 
closed at the time of initial commutation that is subsequently reopened by or 
through a competent authority. If the casualty insurance company proposes  to 
settle  its  liability  for  future  payments  payable  as  compensation  for 
accidents occurring during the term of the policy by the payment  of  a  lump 
sum to the employer, to be fixed as provided in the commutation clause of the 
policy, then the casualty insurance company or the company's agent shall give 
the bureau not less then 30 days' prior notice of  the  commutation.   Notice 
shall be by courier, registered mail or certified mail. If any commutation is 
affected, then the bureau has the right to direct that the sum be  placed  in 
trust for the benefit of the injured employee or employees entitled to future 
payments of compensation.
(d) The policy shall state that if a private  self-insured  employer  becomes 
insolvent and is unable to make compensation payments and the  self-insurers' 
security fund may have responsibility for making payment under section 537 of 
the act, then the excess  insurance  carrier  shall  make,  directly  to  the 
claimants or their authorized representatives, payments as  would  have  been 
made by the excess insurance carrier  to  the  employer  after  it  has  been 
determined that the retention level has been reached on the excess  liability 
insurance policy.
  (e) The policy shall state that 100% of the  following  payments  shall  be 
applied toward reaching the retention level in  the  specific  and  aggregate 
excess liability policy:
  (i) Benefit payments made by the employer as required in the act.
  (ii) Benefit payments, as required in the act that are  due  and  owing  to 
claimants of the employer.
  (iii) Benefit payments made on behalf of the employer, as required  in  the 
act, by a surety under a bond or through the use of other  security  required 
by the director.
  (iv) Payments made by the self-insurers' security fund.
  (v) Usual and customary claims allocated loss adjustment expenses.
  (vi) Payments made, as specified in paragraphs (i), (iii), (iv) and (v)  of 
this subdivision, that are reimbursable  by  the  specific  excess  liability 
policy shall not be considered in reaching  the  aggregate  excess  liability 
retention.
  (f) The policy shall  provide  for  100%  reimbursement  of  the  following 
payments that exceed the retention levels  as  defined  in  the  specific  or 
aggregate excess liability policy: 
  (i) Benefit payments made by the employer as required in the act.
  (ii) Benefit payments made on behalf of the employer as required in the act 
by a surety under a bond or through the use of other security required by the 
bureau.
  (iii) Payments made by the self-insurers' security fund.
  (iv) Usual and customary claims allocated loss adjustment expenses.
 (g) Reimbursement shall be pro rata if multiple excess insurers  insure  the 
same self-insured for the same period.  A request to  waive  a  provision  of 
this rule shall be in writing and approved by the bureau before a  policy  is 
issued.  The carrier shall confirm  issuance  of  an  aggregate  or  specific 
excess liability policy on a form prescribed by the bureau.

  History:  1980 AACS; 1984 AACS; 1989 AACS; 1996 AACS; 1998-2000 AACS; 
2007 AACS.

  Editor's Note: An obvious error in R 408.43k was corrected at  the  request 
of the promulgating agency, pursuant to Section 56 of 1969 PA 306, as amended 
by 2000 PA 262, MCL 24.256.  The rule containing the error was  published  in 
Michigan Register, 2007 MR 4.  The memorandum requesting the  correction  was 
published in Michigan Register, 2007 MR 10.


R 408.43m  Servicing  self-insured   employers   or   groups;   application; 
requirements; noncompliance.
  Rule 13m. (1) An individual, partnership,  limited  liability  company,  or 
corporation that desires to engage in the business of  providing  1  or  more 
services for an individual self-insurer or a self-insurers' group shall apply 
to the bureau before entering into a contract with the  individual  or  group 
self-insurer and shall satisfy the bureau that it has adequate facilities and 
competent staff with  Michigan  workers'  compensation  adjusting  experience 
within the state to service a self-insured program in a manner that  fulfills 
the employers' obligations under the act  and  the  rules  of  the  bureau.   
Workers' compensation claims of Michigan  individual  or  group  self-insured 
employers shall be handled within the state of Michigan by its staff,  except 
that the director, at his or her discretion, may permit an  approved  service 
company to handle the claims of a Michigan individual self-insurer outside of 
this state upon specific written request by the individual  self-insurer  and 
the  service  company.   The  request  for   permission   shall   set   forth 
documentation sufficient to the agency that claims will be  handled  pursuant 
to Michigan law, administrative rules, and agency policy.  The director  will 
respond to the request in writing, giving  the  reasons  for  denial,  or  if 
approved, the conditions of approval.  The approval may be withdrawn  by  the 
director at any time based upon the failure of  the  service  company  and/or 
employer to comply with the conditions of the approval.  Service may  include 
claims adjusting, loss control services, underwriting, and  the  capacity  to 
provide required reporting. Any individual,  partnership,  limited  liability 
company, or corporation  that  provides  claims  adjusting  or  loss  control 
services  to  an  approved  self-insured  employer,  where  the  self-insured 
employer has designated within its  own  organization  an  individual  to  be 
responsible to the bureau for its claims program or loss control services, or 
both, shall not be considered a service company for purposes of this rule.
  (2) An applicant shall apply to  the  bureau  for  approval  to  act  as  a 
servicing company for  self-insured  employers  or  group  funds  on  a  form 
prescribed by the bureau.  The  application  shall  contain  answers  to  all 
questions.  An applicant shall give the answers under oath. The bureau  shall 
approve the application prior to the service company entering into a contract 
with an approved self- insurer. Approval to act  as  a  service  company  for 
self-insurers is granted for a period of 1 year and  is  subject  to  renewal 
annually.
  (3)   If  a  service  company  seeks  approval  to   service   claims   for 
self-insurers,  then  it  shall  submit  proof  that  it  has,   within   its 
organization at least 1 person who has the knowledge  and  Michigan  workers' 
compensation adjusting experience necessary to handle  claims  involving  the 
act. The service  company  shall  attach  a  resume  covering  the  principal 
person's background to the application of the service company. The  principal 
individuals adjusting workers'  compensation  claims  shall  hold  a  current 
workers' disability compensation adjuster's license under chapter 12 of  1956 
PA 218, MCL §500.1201.
  (4) If a service company seeks approval to provide underwriting service  to 
self-insurers,  then  it  shall  submit  proof  that  it  has,   within   its 
organization or under contract on a full-time basis, at least  1  person  who 
has the knowledge and experience necessary to provide  underwriting  services 
for workers' compensation excess liability insurance coverage.   The  service 
company shall attach a resume detailing the principal person's background  to 
the application of the service company.
  (5) If a service company seeks approval to furnish loss control services to 
self-insurers,  then  it  shall  submit  proof  that  it  has,   within   its 
organization or under contract on a full-time basis, at least  1  person  who 
has the knowledge and background necessary to adequately provide loss control 
and health services.
  (6) A service company shall maintain adequate  staff  in  the  state.   The 
service company shall authorize staff to act for the service company  on  all 
matters covered by the act and the rules of the bureau.
  (7) A service company shall  attach  to  the  application  a  copy  of  its 
standard  service  agreement  that  it  will  enter  into  with  self-insured 
employers or group funds. The service company shall certify, in writing, that 
the service agreement is in compliance with the act  and  these  rules.   The 
service company shall certify,  and  include  a  provision  in  its  standard 
service contract which states, that the contract provides for the handling of 
all claims with  dates  of  injury  or  disease  within  the  contract  until 
conclusion of the claims, unless the  service  company  is  relieved  by  the 
bureau, in writing, of the responsibility for handling claims. If the service 
contract calls for additional fees for any reason, then the  service  company 
shall clearly define the additional fees in  the  contract.   For  a  service 
company  to  be  relieved  of  the  responsibility  of  handling  claims   to 
conclusion, the client, the previous service company,  and  the  new  service 
company shall sign a claims transfer agreement. The claims transfer agreement 
shall be completed on a form prescribed by the bureau  and  shall  include  a 
written request made by the previous service company to be  relieved  of  its 
claims handling responsibilities to the  bureau.   A  requesting  company  is 
relieved of its claims handling responsibility only after receiving a written 
response from the bureau approving a  request.   The  service  company  shall 
certify that it will report to  the  specific  excess  insurance  carrier  or 
aggregate excess insurance carrier, or both,  and  put  the  specific  excess 
insurance carrier or aggregate excess insurance carrier, or both,  on  notice 
of all claims as required  by  the  self-insurers'  or  group  self-insurers' 
insurance policies. The standard service contract filed with the  bureau  for 
approval and renewal of the service company authority shall include  language 
specifically stating that the service company is responsible for reporting to 
the excess insurance carrier. The bureau may waive the reporting  requirement 
upon written request to the bureau. Any dispute involving late  reporting  of 
excess liability insurance claims and potential penalties shall  be  reported 
to the bureau immediately.
  (8) A service company  shall  certify,  and  provide  for  in  all  service 
contracts, that all documents generated or prepared by  the  service  company 
for the group or the individual self-insurer or any materials relating to  an 
individual or group self-insurer held by a service company are  the  property 
of the individual or group self-insurer  and  shall  be  surrendered  to  the 
individual or group self-insurer within 10 days of termination of the service 
contract, subject to written request by the individual or group self-insurer.
  (9) Failure to comply with the provisions of the act constitutes good cause 
for withdrawal of the approval to act as a service company for self-insurers. 
 The bureau shall give 30 days' notice of withdrawal. The bureau  shall  give 
the notice by certified or registered mail, upon all interested parties.

  History:  1980 AACS; 1984 AACS; 1996 AACS; 1998-2000 AACS; 2007 AACS.


R 408.43n  Hearing before director; self-insured status, individual and group 
fund; group fund rates, membership applications, security  requirements,  and 
surplus refunds.
  Rule 13n. (1) Upon receiving a notice of intent to deny or terminate  self- 
insured status under section 611 of the act, a party may  request  a  hearing 
before the director within 15 days of the mailing of the notice by the bureau.
Upon receiving a notice denying a request by a group fund for deviation  from 
manual rates, denial of an  individual  membership  application  or  security 
requirement, or a denial of a request for a refund of surplus, the group fund 
may request a hearing before the director within 15 days of  the  mailing  of 
the notice by the bureau.
  (2) The director  shall,  by  certified  or  registered  mail,  notify  the 
appealing party of the  date,  time,  place,  and  reasons  for  holding  the 
hearing. The director shall mail the notice not less than 15 days before  the 
hearing. If the intent to terminate  self-insured  status  is  based  on  the 
self-insurer’s failure to maintain existing security requirements,  then  the 
notice shall advise the self-insurer  that  proof  of  reinstatement  of  the 
security shall accompany the request for hearing or the director may  make  a 
final decision on the termination without further hearing.
  (3) If an appearance is made at a hearing, then it shall be made in  person 
by a duly authorized representative or by counsel.
  (4) A person who has been served with a notice of hearing may,  at  his  or 
her option, file a written statement before the date set for hearing  or  may 
appear at the hearing and present an oral statement and other evidence on the 
issues contained in the notice of hearing. When written briefs  or  arguments 
are presented, a copy shall be served upon the director and other  interested 
parties not less than 5 days before the date set for the hearing.
  (5) If the person or persons who have requested a hearing fail to appear at 
a noticed hearing, the director may consider the request  for  a  hearing  as 
having been abandoned or, in his  or  her  discretion,  may  proceed  with  a 
hearing of the case and may, on the evidence presented, make a decision.
  (6) A hearing shall not be adjourned or continued, except upon an order  of 
the director.

  History:  1980 AACS; 1996 AACS; 1998-2000 AACS.


R 408.43o  Rescinded.

  History:  1980 AACS; 1988 AACS; 1996 AACS.


R 408.43p  Enforcement by director of order of denial or termination  of
  self-insured status; circuit court relief.
  Rule 13p. If the director has probable cause to believe   that   an   order 
denying or terminating self-insured status is being violated,  or   that   an 
employer who is approved or has been previously approved as a self-insured is 
liquidating or may be about to liquidate and distribute its  assets   to  its 
stockholders or to its members without providing  for  its  obligation  as  a 
self-insured employer to pay or arrange for the payment of  compensation  and 
benefits as directed by chapter   6   of   the   act,   the   director   may, 
through the attorney general of the state, cause a petition to  be  filed  in 
the circuit court of Ingham County or the county in which  such  person  does 
business to enjoin and restrain such person from engaging  in  such   method, 
act, or practice.

  History:  1980 AACS.


R 408.43q  Irrevocable letter of credit; acceptance; requirements; payment  of 
surety bond or letter of credit.
  Rule 13q. (1) An irrevocable letter of credit may be accepted by the bureau 
as other security for a self-insured program as provided by section 611(1)(a) 
of the act. The bureau will retain discretion  in  each  particular  case  to 
determine if the letter of credit is  acceptable  and  if  its  language  and 
format are satisfactory.
  (2) Irrevocable letters of credit shall  be  issued  by  a  state-chartered 
bank, a federally chartered bank or foreign bank. Funds shall be  immediately 
payable on demand.  The  director  may  require  confirmation  of  acceptable 
letters of credit from any state, federally or foreign chartered bank without 
state operations or branch services within this state. If a  confirmation  is 
required, it shall be by a State of  Michigan  chartered  bank  or  federally 
chartered bank with Michigan branch operations and state that the  confirming 
bank is primarily obligated on the letter of credit.
  (3) An employer who  elects  an  irrevocable  letter  of  credit  as  other 
security  for  a  self-insured  program  shall  furnish   a   memorandum   of 
understanding with the letter of credit, on a form provided  by  the  bureau, 
which affirms the employer's acceptance of all of the following requirements:
  (a) A letter of credit is furnished to the bureau instead of a surety  bond 
as one of the requirements for approval of a self-insured program.
  (b) The employer understands that the letter  of  credit  shall  be  deemed 
automatically extended without amendment for 1 year from the expiry  date  or 
any future expiry date unless, 60 days before any expiry date, the bureau  is 
notified, by courier, certified or registered mail, that the letter of credit 
shall not be renewed for any additional period.
  (c) A policy of insurance or a surety bond of equal amount may be furnished 
at a later date as a substitute for the letter of credit  if  the  policy  of 
insurance or surety bond covers all claims that would have  been  covered  by 
the letter of credit. All policies of insurance and surety bonds furnished as 
substitutes for letters of credit are subject to prior bureau approval.
  (d) The employer shall affirm that the irrevocable letter of credit in  the 
amount requested by the bureau is being offered with the  understanding  that 
if the bureau receives notice that the letter of credit will not be  renewed, 
then the bureau, in its discretion, may, after  30  days  from  the  date  of 
receipt of the notice, call the proceeds of the letter of credit and  deposit 
the proceeds in the state treasury. And further, if, in the judgment  of  the 
bureau, the letter of credit is  needed  to  cover  any  worker's  disability 
compensation claims, then the proceeds of  the  letter  of  credit  shall  be 
called immediately and deposited in the state treasury for such purpose.
  (e) If legal proceedings are initiated by any party with respect to payment 
of any letter of credit, then the proceedings shall be  subject  to  Michigan 
courts and law.
  (4) The bureau shall not grant an effective date for a self-insured program 
until a completed letter of credit and the memorandum of  understanding  have 
been reviewed and accepted by the bureau.
  (5) If it is necessary for the director, under statute and bureau rules, to 
call the bond or other security, then a trust shall be established  with  the 
funds, unless the provider of the bond or other security elects to handle the 
claims directly and the bureau approves. If a trust is established, the funds 
shall be deposited in the state treasury and the state treasurer, as provided 
by section 551(7) of the act, shall be  the  custodian  of  the  trust.   The 
trustees of the trust shall be the  trustees  of  the  funds  denominated  in 
chapter 5 of the act and also those  who  are  appointed  as  trustees  under 
section 511 of the act. The service company of the self-insured employer,  if 
any, shall continue to perform in accordance with the terms of the employer's 
contract with the service company.

  History:  1988 AACS; 1998-2000 AACS; 2007 AACS.


R 408.43r  Public employer group funds; waiver of  requirement  for  excess 
insurance.
  Rule 13r. A public employer group fund  may  request  a   waiver   of   the 
requirement for excess insurance. The director shall  waive  the  requirement 
for excess insurance  for  a  public  employer  group  fund   if   the   fund 
demonstrates that it has sufficient financial strength   and   liquidity   to 
assure that all obligations under the act shall be   promptly   met   without 
the protection of an excess insurance policy.

  History:  1987 AACS.


R 408.43s  Group  funds;  insufficient  funding;   creation    of    trust; 
appointment of trustees.
  Rule 13s (1) If the plan to achieve full  funding  for  payment   of    all 
claims and expenses of the self-insurers group  pursuant  to   rule   408.43j 
is  not approved by the bureau, then the bureau may  order  the   board    of 
trustees  of the self-insurers group to immediately  assess   the    employer 
members  of  the group for the full amount of the deficiency  and/or    order 
that  any  surplus funds distributed to group members during  the    previous 
12  calendar  months from the date of discovery of the funding deficiency  by 
the  group  fund  be immediately returned.
  (2) If the bureau determines  that  the  self-insurers  group   ceases   to 
provide ongoing and active coverage to its members and/or  the   requirements 
of  this rule are not sufficient to secure all future  liability  established
 by  the workers disability compensation act of 1969,  then  the  bureau  may
 require additional assessment of the employer members of  the   group    and 
request  the director to create and establish the terms of a  trust,  at  the 
expense of  the self-insurers group, for the deposit and  administration   of 
any  assessment received and/or all assets of the self-insurers  group.   The 
trustees   of   the  funds  appointed  under  section  511  of  the  workers' 
disability compensation act shall be appointed trustees of the  self-insurers 
group trust fund established under this rule.

  History: 2003 AACS.
 

R 408.43t  Group self-insurance; employee leasing.
  Rule 43t. On or after the effective date  of  this  rule,    an    employee 
leasing company approved for membership in  a  group   self-insurance    fund 
pursuant  to MCL 418.611(2) of the workers' compensation act shall qualify as 
being in the same industry of the group fund if the employee leasing  company 
meets all  of the following conditions:
  (a) The individual or individuals or entity or entities owning  the  entity 
or entities where the employees are or will  be   placed   shall    have    a 
combined majority ownership interest of  at  least  51%  in  the  prospective 
member leasing company.
  (b) The leasing company shall only  lease  employees  to   entities    that 
qualify for and participate in the group to which the leasing  company  seeks 
admission.
  (c) The application submitted for  membership  by  the   employee   leasing 
company shall clearly state on the first page of the application   that   the 
entity  is an employee leasing company and shall name all  the   owners    of 
the  leasing company and the percentage of ownership of each   owner.     Any 
change  in  the percentage of ownership shall be reported to the  group  fund 
and  the  agency within 10 days of the ownership change.  If   the    leasing 
company  no  longer meets the requirements of subdivision (a) or    (b)    of 
this  rule  after  the change in ownership, then the leasing company shall be 
subject to termination pursuant to R 408.43g(4).
  (d) The application shall identify and name the  entity  or  entities  with 
which employees are placed or to be placed, the name of each  individual   or 
entity that owns the entity with which employees are or  will   be    placed, 
and  the percentage or ownership interest for each.
  (e) If the leasing company leases employees to any  entity  which  is   not 
a member of the group fund of which the leasing company is  a   member,    or 
the leasing company fails to report any changes in ownership to   the   group 
fund and the agency within 10 days of the change in ownership,    then    the 
leasing company shall be terminated from participation  in  the  group  fund, 
pursuant to R 408.43g(4).

  History: 2006 AACS. 


                           PART 4. MISCELLANEOUS

R 408.44   Attorney fees.
  Rule 14. (1) The limitation in this rule as to fees applies to  plaintiff’s 
attorneys, including combined charges of attorneys who combine their  efforts 
toward the enforcement or collection of any compensation claim.
  (2) In a case tried  to  completion  with  proofs  closed  or  compensation 
voluntarily paid, an attorney, before computing the fee,  shall  deduct  from 
the accrued compensation the  reasonable  expenses  incurred  on  plaintiff’s 
behalf.
The fee that the magistrate may approve shall not be more  than  30%  of  the 
balance.
  (3) In a case involving a redemption of  liability,  the  attorney,  before 
computing  the  fee,  shall  deduct  the  reasonable  expenses  incurred   on 
plaintiff’s behalf from the total settlement. The fee that the magistrate may 
approve is as follows:
  (a) Of the first $25,000.00, a fee of not more than 15%.
  (b) Of any amount more than $25,000.00, a fee of not more than 10%.
  (4) In a case tried to completion with proofs closed  but  before  a  final 
order, after which there is a redemption of liability, the  attorney,  before 
computing  the  fee,  shall  deduct  the  reasonable  expenses  incurred   on 
plaintiff’s behalf from the total settlement. The total  settlement  in  such 
redemptions shall be deemed to include  the  gross  amounts  of  any  partial 
payments made under section 862 of the act, if  the  redemption  specifically 
includes a waiver of the right of reimbursement of such amounts  from  either 
the plaintiff or the second injury fund. The  fee  that  the  magistrate  may 
approve shall not be more than 20% of the balance.
  (5) Reasonable expenses, as used in this rule, include all of the following:
  (a) Medical examination fee and witness fee.
  (b) Any other medical witness fee, including the cost of a subpoena.
  (c) The cost of a court reporter service.
  (d) Appeal costs.
  (6) Subrules (2) to (4) of this rule apply to a case with an injury date on 
or after September 1, 1965. The rule as to attorney  fees  in  effect  before 
September 1, 1965, applies to a case with an injury date before September  1, 
1965.
  (7) In a case dismissed for lack of progress or prosecution or in which the 
petition for hearing is withdrawn for reasons other than voluntary payment or 
other meritorious reasons and further action is taken by the same attorney or 
law firm, the fee that the magistrate  may  approve  in  cases  specified  in 
subrule (2) of this rule shall be not  more  than  25%  of  the  balance;  in 
subrule (3) of this rule, of the first $25,000.00, not more than 12-1/2%, and 
of any amount more than $25,000.00, 10%; in subrule (4) of this rule, the fee 
shall be not more than 15% of the balance.
  (8) A group disability or hospitalization insurance company  that  enforces 
an assignment given to it as provided in the act shall pay a part of the  fee 
of the attorney who secured the compensation recovery in the same  proportion 
that the group insurance company payments  bear  to  the  total  compensation 
recovery upon which the attorney’s fee is based.
  (9) In the computation of attorney fees in a case decided by  the  workers’ 
compensation appellate commission, the fee shall be assessed on not more than 
104 weeks of the period the matter was pending  before  the  commission.  All 
other weekly benefits due and owing for the period of appeal shall  be  fully 
paid to  the  plaintiff.  The  limitation  of  fee  applies  only  to  weekly 
compensation.
  (10) In a case where  benefits  are  being  voluntarily  paid  at  time  of 
redemption, and no application for mediation or hearing is pending, not  more 
than 10% attorney fee will be allowed.

  History:  1979 AC; 1980 AACS; 1998-2000 AACS.


R 408.45   Medical examination and rehabilitation.
  Rule 15. (1) A carrier and the self-insurers’ security fund shall report to 
the bureau, on form 110, report on rehabilitation, 3 months after the date of 
injury and after each subsequent 4 months, what evaluation and what provision 
has been made for rehabilitation on all cases for which  a  final  form  701, 
notice of compensation payments, has not been filed.  All  reports  shall  be 
accompanied by a current medical report. In case of a specific loss where the 
injured  employee  has  returned  to  work  without   rehabilitation   before 
expiration of the specific loss period, a notation  of  the  return  to  work 
shall be made on form 110, report on rehabilitation, and  thereafter  further 
reports shall not be necessary. Where rehabilitation has been  undertaken  in 
the form of  favored  work  or  on-the-job  training  by  the  employer,  the 
rehabilitation shall be so identified in all reports.
  (2) When an employee consents or is ordered by the bureau to  submit  to  a 
medical examination or rehabilitation  or  undergoes  any  medical  treatment 
related to the disability, the  carrier  shall  pay  the  traveling  expenses 
incidental to such examination, medical  treatment,  or  rehabilitation.  The 
employee shall notify the carrier, in writing, of the  mileage  involved  and 
other expenses.
  When an employee is examined at  the  request  of  the  carrier  under  the 
provisions of section 385  of  the  act,  the  expenses  incidental  to  such 
examination shall be paid in advance.
  The traveling expenses shall be those authorized in the state  standardized 
travel regulations, except that  when  special  transportation  is  medically 
required, payments shall be made at actual  cost.  The  allowance  for  other 
expenses, if any, shall be those allowed by this state.
  The provisions of this rule do not apply to the first examination requested 
by the employer or insurer if all of the following conditions exist:
  (a)  An  application  for  hearing  is  filed  upon  which  no  payment  of 
compensation or medical expense has been made for 1 year before the  date  of 
filing.
  (b) The employee’s home at the time of filing the application  for  hearing 
is outside of this state.
  (c) The citation to appear for examination is at a time reasonably close to 
the date of hearing so as to obviate the necessity of an additional  trip  on 
the part of the employee to attend the hearing.
  (3) Under section 319 of the act, the director  may,  on  his  or  her  own 
motion or upon receipt of an application from the employee or employer, refer 
the employee for an evaluation of the need for a rehabilitation  program  and 
the kind of rehabilitation program necessary to return the employee to  work. 
If a hearing is requested, then all of the following provisions apply:
  (a) When a request for rehabilitation service is made by  the  employee  or 
employer, then the director or his authorized representative may  schedule  a 
hearing.
  (b) If the director, on his or her  own  motion,  orders  a  rehabilitation 
program, then he or she shall notify both parties and, if requested by either 
party within 15 days, shall schedule a hearing.
  (c) A hearing shall be scheduled within a reasonable time, subject  to  the 
availability of the director or his or her  representative  and  the  parties 
involved. A request for a hearing shall, at a minimum,  contain  all  of  the 
following:
  (i) A brief statement of the question concerning rehabilitation.
  (ii) If requested by the employer, a citation of the specific instances  of 
the employee’s failure to cooperate in the rehabilitation program.
  (iii) If requested by the employee, the type of program requested  and  the 
reason for it.
  (d) Unless a request for review by a magistrate is filed by a party  within 
15 days, the order of the director or his or  her  authorized  representative 
shall stand as the order of the  bureau.  For  sufficient  cause  shown,  the 
magistrate may grant additional time in which to claim such review.

  History:  1979 AC; 1980 AACS; 1998-2000 AACS.


R 408.46   Application for  silicosis,  dust  disease,  and  logging  industry 
compensation fund and second injury fund benefits.
  Rule 16.  (1)  An  application  for  reimbursement  of  benefits  from  the 
silicosis, dust disease and logging industry  compensation  fund  and  second 
injury fund shall be made on form 112 and sent to the principal office of the 
funds administrator.
  (2) A carrier believing that reimbursement  may  be  due  from  the  second 
injury fund under section 372 of the act shall immediately notify the fund of 
the potential claim. The fund  may  then  conduct  an  investigation  of  the 
personal  injury  and  shall  have  reasonable  time  to   schedule   medical 
examinations.
If a petition is filed with the bureau, then the carrier shall add the second 
injury fund and the fund shall have  the  same  rights  as  any  other  party 
defendant.
The magistrate shall enter an order determining the liability of the  carrier 
and the fund.
  (3) If an employee petitions for a hearing under section 356(1) of the act, 
then the second injury fund shall be deemed a party in interest and shall  be 
named on the petition filed by the employee or added by the carrier  when  it 
has knowledge that a claim is being filed under section 356(1)  of  the  act. 
The fund shall have the same rights as a carrier in the proceedings.
  (4) Any stipulated order presented for entry which may affect the amount or 
duration of benefits or which involves a potential  liability  on  any  state 
fund created under chapter 5 of the act shall be presented to the  magistrate 
for entry only after a party provides 10 days’ notice of the date of  hearing 
to all parties affected or potentially affected. A party shall file proof  of 
service on the other parties before the hearing date. The magistrate may,  at 
his or her discretion, require the presentment of proofs in  support  of  the 
stipulation.
  (5) Reimbursement shall be made on a quarterly basis for the second  injury 
fund’s portion of the benefits due the employee.

  History:  1979 AC; 1984 AACS; 1998-2000 AACS.


R 408.47   Extensions of time granted by the director.
  Rule 17.  The  director  or  his  authorized   representative   may   grant 
extensions of time in which to comply with any rule as  the  director   deems 
reasonable.

  History:  1979 AC.


R 408.48   Compensation payments; calculation; payment.
  Rule 18. (1) Pursuant to section 313(1) of the act,  the   calculation   of 
federal income tax, federal insurance  contribution  act   tax,   and   state 
income tax shall be based on the  federal  income   tax   schedule,   federal 
insurance contribution act tax, and state income tax rate in  effect  on  the 
applicable July 1 for which the after-tax weekly wage  is   determined.   The 
state law in effect on the applicable July 1 shall be   conclusive   in   the 
determination of the after-tax weekly wage for that calendar year.
  (2) Weekly payments shall be made payable and  mailed   directly   to   the 
injured employee or his or her dependent. When the claimant is represented by 
counsel, the accrued compensation shall be made payable to   the   person  or 
persons entitled thereto and  mailed  to  the  attorney   representing   such 
person or persons.

  History:  1979 AC; 1985 AACS.


                         PART 5. REVIEW AND APPEAL

R 408.49   Rescinded.

  History:  1979 AC; 1998-2000 AACS.


R 408.50   Rescinded.

  History:  1979 AC; 1998-2000 AACS.


R 408.51   Rescinded.

  History:  1979 AC; 1998-2000 AACS.


R  408.52   Rescinded.

  History:  1979 AC; 1998-2000 AACS.


                            PART 6. DEFINITIONS

R 408.59   "Act" defined.
  Rule 29. (1) As used in these rules:
  (a) "Act" means Act No. 317 of the Public  Acts  of   1969,   as   amended, 
being S418.101 et seq. of the Michigan Compiled Laws.
  (b) Unless the context  indicates  otherwise,  the   terms   "bureau"   and 
"director" shall have equivalent meaning.
  (2) Terms defined in the act have the same meanings when  used   in   these 
rules.

  History:  1980 AACS; 1984 AACS.