4. a. Upon creation of the Insolvency Fund pursuant to the provisions of section 5 of this act, the association is obligated for payment of compensation under chapter 15 of Title 34 of the Revised Statutes to insolvent members’ employees resulting from: (1) incidents and injuries existing prior to the member becoming an insolvent member; and (2) incidents and injuries occurring after the member has become an insolvent member, if the employee makes timely claim for those payments according to procedures set forth by a court of competent jurisdiction over the delinquency or bankruptcy proceedings of the insolvent member. Such obligation includes only that amount due the injured worker or workers of the insolvent member under chapter 15 of Title 34 of the Revised Statutes. In no event is the association obligated to a claimant in an amount in excess of the obligation of the insolvent member. The association shall be deemed the insolvent member for purposes of chapter 15 of Title 34 of the Revised Statutes to the extent of its obligation on the covered claims and, to that extent, shall have all rights, duties and obligations of the insolvent member as if the member had not become insolvent. However, in no event shall the association be liable for any penalties or interest or for compensation payments which were due before the member became an insolvent member.

b. The association may:

(1) Employ or retain those persons necessary to handle claims and perform other duties of the association.

(2) Borrow funds necessary to effect the purposes of this act in accordance with the plan of operation.

(3) Sue or be sued.

(4) Negotiate and become a party to those contracts as are necessary to carry out the purposes of this act.

(5) Purchase reinsurance as it determines necessary pursuant to the plan of operation.

(6) Review all applicants for membership in the association. Prior to a final determination by the department as to whether or not to approve any applicant for membership in the association, the association may issue opinions to the department concerning any applicant, which opinions shall be considered by the department prior to any final determination.

(7) Charge fees to any member of the association to cover the actual costs of examining the financial condition of that member.

(8) Charge an applicant for membership in the association a fee sufficient to cover the actual costs of examining the financial condition of the applicant.

c. (1) To the extent necessary to secure funds for the payment of covered claims and also to pay the reasonable costs to administer them, the association shall levy assessments on its members. The assessment charged to each member shall be in the proportion that the member’s compensation payments during the 12-month period ending on the June 30th immediately preceding the date of the assessment bear to the total compensation payments made by all members during that period. The assessment levied against any member in any one year shall be in an amount not exceeding 1.5 percent of the total compensation paid by the member during the 12-month period ending on the June 30th immediately preceding the date of the assessment, except that the association shall increase the assessment to not more than two percent each year as needed to establish and sustain a prefunded reserve of $1,000,000. Assessments shall be administered by the board of directors in the manner specified by the plan of operation. Each member so assessed shall have at least 30 days’ written notice as to the date the assessment is due and payable. The association shall levy assessments against any newly admitted member of the association so that the basis of contribution of any newly admitted member is the same as previously admitted members, provision for which shall be contained in the plan of operation.

(2) If, in any one year, funds available from such assessments, together with funds previously raised, are not sufficient to make all the payments or reimbursements then owing, the funds available shall be prorated, and the unpaid portion shall be paid as soon thereafter as sufficient additional funds become available.

(3) No State funds of any kind shall be allocated or paid to the association or any of its accounts.

d. The association shall make every reasonable effort and undertake all appropriate actions to obtain from an insolvent member whatever funds are needed to pay compensation due to employees of the insolvent member.

L.1993,c.107,s.4.