Owners/Officers/Partners
An individual who owns an unincorporated business is a __?
Sole Proprietor
What is required for a corporation’s officer to be excluded from coverage?
10% or more ownership in the corporation and a signed exclusion form
Which entity or entities are organized without owners but is managed by the concept of mutual agreement and shared responsibility?
•Association (e.g. HOA, Water District, Co-Op)
An insurance agent issues a new policy for a partnership entity. The agent does not provide the signed application or any election forms. What documentation is required for the Partners to remain excluded?
None. Partners are automatically excluded from coverage and to be included in coverage they must sign the "election to be subject to workers' compensation act and occupational disease disablement law" form.
How are LLCs established?
LLCs are established by filing the Articles of Organization or a Certificate of Information with the Secretary of State.
Which entity does not distribute profits to shareholders or owners?
A not-for-profit organization (NFPO) is an entity that does not distribute its surplus funds to owners or shareholder
If the entity is a trust as the named insured, who is eligible to excluded from coverage?
No exclusions apply due to no individual ownership. Policy ownership will be listed as "Non Profit“.
Tarman Enterprises owns 3 businesses. The President is included in coverage and active in all 3 businesses. How many times will New Mexico Mutual pick up the Owner's payroll at final audit?
1- If all policies are insured with New Mexico Mutual.
What are Homeowner Associations (HOA) and Real Estate Co-Ops established for?
They are organized to manage and maintain the common areas and to enforce community guidelines within the boundaries of the association.
The spouse of a Sole Proprietor works in the business performing unpaid administrative duties for more than 20 hours per week. How will the wages be calculated if there are no other employees doing similar work?
Worker employed 20 or more hours weekly, use 100% of the “Premium Determination for Partners and Sole proprietors” located in the state rate pages of the NCCI Basic Manual.
If a corporation is legally set up in accordance with state law, which group is legally liable for its debts and obligations?
The Corporation itself. The Officers and Shareholders are not responsible.
If Ernesto is on the Board of Directors for Neighborhood Help and he is a paid employee of the organization, how is his payroll handled for audit purposes?
Active board members are included for their full payroll as long as they are not also an Officer.
A Sole Proprietor wants to exclude his spouse as a “partner”. Is this allowed?
No. A Sole Proprietor can only have one 100% owner responsible for all operations.
A company determines that it is in their best interest to enter into a PEO contract that includes all employees and the executive officers. They terminate all employees and then “lease” them back from the PEO company. Are the Executive Officers subject to Officer Min/Max rules?
No, the Executive Officers are now employees of the Leasing Company and not the original company. Therefore, they are not eligible for min/max rules
If a board member is inactive in the business but paid a stipend for their duties on the board, are these payments subject to workers compensation inclusion at audit?
No, their stipends will be excluded