In this subtitle the following words have the meanings indicated. “Board” means the Uninsured Employers’ Fund Board. “Director” means the Director of the Board. “Fund” means the Uninsured Employers’ Fund. “Uninsured employer” means an employer who fails to secure payment of compensation to the covered employees of the employer in accordance with § 9-402 of this title.

An award is payable out of the Fund in accordance with this section. Unless an application for review has been timely filed under subsection (g) of this section or a notice of appeal timely served, an employer is in default on a claim by a covered employee or the dependents of a covered employee if the employer fails to: secure payment of compensation in accordance with § 9-402 of this title; except for a governmental self-insurance group authorized by § 9-404 of this title, deposit security in accordance with § 9-405 of this title that is: sufficient to cover a claim by a covered employee; and at least $100,000; and pay compensation in accordance with an award within 30 days after the date of the award. If an employer is in default under subsection (b) of this section, promptly after the expiration of 30 days after the date of the award, the Commission shall notify the employer that: the employer is in default; and the license or permit of the employer to do business in the State may be suspended. On receipt of a notice of default, an employer promptly shall pay the award. To object to an award, the employer, within 30 days after receipt of the notice of default, shall notify the Commission of the reasons why the employer objects to the award. The notice of objection by the employer to the Commission serves as an application for review under subsection (g) of this section. If the employer does not pay the award and does not notify the Commission of its objection to the award in accordance with subsection (d) of this section, the covered employee or the dependents of the covered employee may apply to the Director for payment from the Fund. On receipt of an application for payment, the Fund may: pay the award; or apply for review under subsection (g) of this section. The provisions of Subtitle 7 of this title about procedure and the right to appeal apply to: a covered employee or the dependents of a covered employee who file a claim; the uninsured employer; and the Fund. The right of review of the Fund includes: raising issues; discovery; and a hearing before the Commission.

If the Fund makes payment to a covered employee or the dependents of a covered employee as directed by the Commission, the Fund is subrogated to the rights of the covered employee or dependents against the uninsured employer. The Fund may: institute a civil action to recover the money paid under the award; refer the matter to the appropriate authority for prosecution under § 9-1108 of this title; or do both. Notwithstanding any other provision of law, if the uninsured employer is a corporation the assets of which are not sufficient to satisfy an award, any officer of the corporation who has responsibility for the general management of the corporation in the State is jointly and severally liable for payment of the award if the corporate officer knowingly failed to secure workers’ compensation insurance. Notwithstanding any other provision of law, if the uninsured employer is a limited liability company the assets of which are not sufficient to satisfy an award, any member of the company who has responsibility for the general management of the limited liability company in the State is jointly and severally liable for payment of the award if a member of the limited liability company who has general management responsibility knowingly failed to secure workers’ compensation insurance.

If the Fund pays compensation to a covered employee or the dependents of a covered employee, the Fund is subrogated to the rights of the uninsured employer under this title. If the Fund and the uninsured employer both have paid compensation to or on behalf of a covered employee or the dependents of a covered employee, the Fund shall apply any money that it recovers from a third party: first, to repayment of the award paid by the Fund; second, to any unsatisfied demand for security and to assessments imposed against the uninsured employer under this subtitle; and finally, to the uninsured employer. If the Fund and the uninsured employer both have paid compensation to or on behalf of a covered employee or the dependents of a covered employee, and the Fund recovers money from a third party exceeding the amount of compensation awarded to the covered employee or the dependents and the reasonable and necessary expenses incurred in making the recovery, the Fund shall: apportion the excess amount between the covered employee or the dependents and the Fund; and use the balance to: first, reimburse the Fund for its reasonable and necessary expenditures in making the recovery; second, repay any award paid by the Fund; third, satisfy any unsatisfied demand for security or assessments imposed against the uninsured employer under this subtitle; and finally, return the remainder to the uninsured employer.

When the Commission makes a decision on a claim for compensation against an uninsured employer, the Commission shall impose against the uninsured employer an assessment of: at least $500 but not exceeding $1,000; and 15% of any award made in the claim, not exceeding $5,000 in any 1 claim. Notwithstanding any other provision of law, if the uninsured employer is a corporation the assets of which are not sufficient to satisfy an assessment, any officer of the corporation who has responsibility for the general management of the corporation in the State is jointly and severally liable for the assessment if the corporate officer knowingly failed to secure workers’ compensation insurance. Notwithstanding any other provision of law, if the uninsured employer is a limited liability company the assets of which are not sufficient to satisfy an assessment, any member of the limited liability company who has responsibility for the general management of the limited liability company in the State is jointly and severally liable for the assessment if a member of the limited liability company who has general management responsibility knowingly failed to secure workers’ compensation insurance. The Commission shall direct payment of an assessment under subsection (a) of this section into the Fund.

The Commission may assess an insurer $300 if: the insurer fails to comply with the requirements of the Commission about certification of insurance with the Commission; and the Commission finds that the Fund or the Commission was required to investigate or attend a hearing to determine whether an employer has insurance. The Commission may assess the insurer an additional $300 for each subsequent failure to comply with the insurance certification requirements of the Commission. The Commission shall direct payment of an assessment under subsection (a) or (b) of this section into the Fund. If an insurer fails to comply with the insurance certification requirements of the Commissioner 5 times in a fiscal year, the Commission may: notify the Insurance Commissioner; and request that the insurer show cause why the Insurance Commissioner should not impose sanctions under § 4-113(d) of the Insurance Article.

Except as provided in subsection (b) of this section, the Commission shall impose against an employer or, if insured, its insurer an assessment equal to 1% of: each award against the employer for permanent disability or death, including awards for disfigurement or mutilation; and except as provided in paragraph (2) of this subsection, each amount payable by the employer or its insurer under a settlement agreement approved by the Commission. The amount of medical benefits specified in a formal set–aside allocation that is part of an approved settlement agreement shall be excluded from the assessment imposed by the Commission under paragraph (1)(ii) of this subsection if: the amount of medical benefits is in excess of $50,000; and the payment of medical benefits by the employer or its insurer is directly to an authorized insurer that provides periodic payments to the covered employee pursuant to a single premium annuity; or the amount of medical benefits is in any amount; and the payment of medical benefits by the employer or its insurer is to an independent third–party administrator that controls and pays the medical services in accordance with the formal set–aside allocation, provided there is no reversionary interest to the covered employee or the covered employee’s beneficiaries. Notwithstanding any other provision of law, if the employer is a corporation the assets of which are not sufficient to satisfy an assessment, any officer of the corporation who has responsibility for the general management of the corporation in the State is jointly and severally liable for the assessment if the corporate officer knowingly failed to secure workers’ compensation insurance. Notwithstanding any other provision of law, if the employer is a limited liability company the assets of which are not sufficient to satisfy an assessment, any member of the limited liability company who has responsibility for the general management of the limited liability company in the State is jointly and severally liable for the assessment if a member of the limited liability company who has general management responsibility knowingly failed to secure workers’ compensation insurance. Notwithstanding the limit on the balance of the Fund under § 9–1011 of this subtitle, if the Board determines that the reserves of the Fund are inadequate to meet anticipated losses, the Board may direct the Commission to assess an additional 1% under subsection (a) of this section. Any fractional dollar of payment under this section shall be rounded off to the nearest whole dollar. The Commission shall direct payment of an assessment under subsection (a) or (b) of this section into the Fund. Payments under this section are in addition to the payment of compensation to a covered employee or the dependents of a covered employee under this title.

This section does not apply to an award against the Subsequent Injury Fund. The Commission shall impose an assessment of 10%, not exceeding $4,500, against compensation awarded or likely to be awarded against an insured or self-insured employer and not paid if the Commission determines that the compensation is not awarded or is abated because of: death; or lack of a covered employee or a dependent of a covered employee eligible for the compensation. On expiration of the time period within which a claim may be filed under this title, the Commission shall assess the insurer or self-insured employer $4,500 if a covered employee dies: due to an accidental personal injury or occupational disease; and without any surviving dependent. The Commission shall direct payment of an assessment under subsection (b) or (c) of this section into the Fund.

When the Commission imposes an assessment on an employer under this subtitle, the Commission shall mail the employer notice of the assessment. An employer shall pay an assessment under this subtitle into the Fund within 10 days after the date that notice of the assessment is mailed to the employer. If an employer fails to pay an assessment in accordance with subsection (b) of this section, the default constitutes a default in payment of compensation and judgment shall be entered as in a case of default in payment of compensation. Except for fines collected under § 9-1108 of this title, all money collected from an uninsured employer with respect to any claim for compensation but not payable from the Fund, whether collected before or after entry of a judgment against the employer, shall be: first, considered payment of and applied to any compensation or benefits due or security demanded from the employer in connection with the claim; and second, considered payment of and applied to assessments imposed under this subtitle. All money recovered from uninsured employers on judgments entered for failure to pay assessments and for failure to pay compensation and benefits that were paid from the Fund shall be paid into the Fund.

An assessment that is payable under this subtitle is a lien against the assets of the employer who is liable for the assessment. A lien under subsection (a) of this section is subordinate to: claims for unpaid wages; and prior recorded liens.

When the amount of the Fund equals at least $5,000,000, the payment of assessments by employers and insurers is suspended. The Director shall notify each self-insured employer and insurer of the suspension of the payment of assessments under paragraph (1) of this subsection. Payment of assessments shall be resumed if: the amount of the Fund becomes less than $3,000,000 because of payments made under § 9-1002 of this subtitle or other payments; or the Director determines that payments that are likely to be made from the Fund in the next 3 months will reduce the amount of the Fund to less than $3,000,000. When payment of assessments is to be resumed under paragraph (1) of this subsection, the Director shall notify each self-insured employer and insurer that payment of assessments is to: resume on a specified date; and continue until the amount of the Fund becomes at least $5,000,000.

Notwithstanding any other provision of this subtitle, the Director shall notify an employer by certified mail, return receipt requested, that the license or permit of the employer to do business in the State may be suspended if the employer fails to: reimburse the Fund for payment of an award under § 9–1002 of this subtitle; pay an assessment under this subtitle; or pay a penalty ordered under § 9–407 of this title. The Director shall send a copy of the notice to each State, county, or municipal unit that has issued a license or permit to the employer for an activity for which workers’ compensation coverage is required by law. Within 15 days after receipt of the notice, the licensing unit shall provide the employer with the notice and opportunity for a hearing as otherwise may be required by law. If law requires the licensing unit to hold a hearing, the licensing unit shall send written notice of the hearing date to the Director. The licensing unit shall suspend the license or permit of the employer if the licensing unit finds that the employer has failed to: reimburse the Fund for payment of an award under § 9–1002 of this subtitle; pay an assessment under this subtitle; or pay a penalty ordered under § 9–407 of this title. A suspension of a license or permit under paragraph (1) of this subsection shall continue until the employer: reimburses the Fund for payment of an award under § 9–1002 of this subtitle; pays the assessment due to the Fund; pays a penalty due to the Fund; or agrees to reimburse the Fund for payment of an award or to pay the assessment and the penalty due to the Fund in a manner approved by the Board.

If the Director considers compromise to be in the best interest of the Fund, the Director may compromise the amount of a judgment against an employer under this subtitle. A compromise under paragraph (1) is not required to be approved by any other State official to be effective. A compromise under this section may not reduce the amount of benefits payable to or for a covered employee or the dependents of a covered employee. A judgment may be modified to reflect a compromise under this section.

Unless the Director gives written consent, a covered employee or the dependents of the covered employee may not settle a cause of action for an amount less than the amount that the Fund paid to or for the covered employee or dependents.