Section 34-9-385. Bankruptcy of participants

   (a) Any participant who files for relief under the federal Bankruptcy Act or against whom bankruptcy proceedings are filed or for whom a receiver is appointed shall file written notice of such fact with the board and the board of trustees within 30 days of the occurrence of such event.

(b) Any person who files an application for adjustment of a claim against a participant who is in default or has filed for relief under the federal Bankruptcy Act or against whom bankruptcy proceedings have been filed or for whom a receiver has been appointed must file a written notice of such fact with the board and the board of trustees within 30 days of such person's knowledge of the event.

(c) Upon receipt of any notice as provided in subsection (a) or (b) of this Code section, the board shall determine whether the participant is insolvent or in default according to procedures established by the board of trustees and approved by the board. Such determination shall be made within a reasonable time after the date the board and board of trustees receive notification as provided in subsection (a) or (b) of this Code section.

(d) When a participant is determined to be in default or an insolvent self-insurer, the board of trustees is empowered to and shall assume on behalf of the participant its outstanding workers' compensation obligations excluding penalties, fines, and claimant's attorneys' fees assessed against the participant pursuant to subsection (b) of Code Section 34-9-108 and shall take all steps necessary to collect, recover, and enforce all outstanding security, indemnity, insurance, or bonds furnished by such participant guaranteeing the payment of compensation provided in this chapter for the purpose of paying outstanding obligations of the participant. The board of trustees shall convert and deposit into the fund such security and any amounts received under agreements of surety, guaranty, insurance, or otherwise on behalf of the participant. Any amounts remaining from such security, indemnity, insurance, bonds, guaranties, and sureties, following payment of all compensation costs and related administrative expenses and fees of the board of trustees including attorneys' fees, and following collection of all amounts assessed and received pursuant to subsections (a) and (d) of Code Section 34-9-121 and any applicable rule of the board may be refunded by the fund as directed by the board of trustees, subject to the approval of the board, to the appropriate party one year from the date of final payment and closure of all claims, provided no outstanding self-insured liabilities remain against the fund and the applicable statute of limitations has run.

(e) The fund shall be a party in interest in all proceedings involving workers' compensation claims against a participant whose workers' compensation obligations are to be paid or assumed by the fund and shall be subrogated to the rights of the participant. In such proceedings the fund shall assume and may exercise all rights and defenses of the participant, including, but not limited to:

   (1) The right to appear, defend, and appeal claims;

   (2) The right to receive notice of, investigate, adjust, compromise, settle, and pay claims; and

   (3) The right to investigate, handle, and controvert claims.

(f) In any proceeding in bankruptcy in which the payment of benefits has been stayed, the board of trustees, through a designated representative, may appear and move to lift the stay so that the orderly administration of claims can proceed. The fund shall be subrogated to the rights and claims of any claimant against a participant to the extent of the payments made by the fund to the claimant and may pursue recovery against the participant to the extent of the claims paid or to be paid.

(g) The board of trustees shall notify all employees who have pending claims against a participant for workers' compensation benefits which are subject to the provisions of this article of the name, address, and telephone number of the party administering and defending their claim.

(h) The board may, in its discretion, direct that the Self-insurers Guaranty Trust Fund honor and pay, in whole or in part, the contractual fee arrangement between an attorney and a claimant pursuant to subsection (a) of Code Section 34-9-108, provided that application to honor the fee arrangement is made after notice pursuant to subsection (g) of this Code section and subject to consideration of objections by any party.

(i) No provision of this Code section shall impair any claims in the insolvent self-insurer's bankruptcy by the board of trustees, any employee, or any provider of services related to the insolvent self-insurer's workers' compensation obligations, to the extent those claims remain unpaid, including but not limited to medical providers or attorneys representing either the insolvent self-insurer or claimants.

Code 1981, § 34-9-385, enacted by Ga. L. 1990, p. 770, § 1; Ga. L. 1998, p. 128, § 34; Ga. L. 1998, p. 1508, § 10; Ga. L. 2009, p. 118, § 6/HB 330; Ga. L. 2010, p. 126, § 4/HB 1101.