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South Carolina: Guaranty Association Ordered to Pay Penalties and Interests Where It Failed to Pay Claim in Timely Fashion

January 17, 2014 (2 min read)

The Supreme Court of South Carolina recently held in relevant part that with regard to the handling of claims related to insolvent workers’ compensation carriers, the "covered claim" limitation applies only in the context of claims deriving from insolvent carrier's policies; when a claim is brought directly against the guaranty association for actions taken by it in the handling of a case, there is no such "covered claims" limitation.  Accordingly, the high court held that both interest and penalties could be assessed against the guaranty association where, after a first round of appeals was abandoned, liability for a lump-sum award was conclusively established and the guaranty association's subsequent failure to timely pay the lump-sum award could only be attributed to its own conduct. While interest and penalties could not be assessed for derivative liability, under S.C. Code Ann. § 38-31-60(j), the association could be directly liable for its own actions.

Thomas A. Robinson, J.D., the Feature National Columnist for the LexisNexis Workers’ Compensation eNewsletter, is a leading commentator and expert on the law of workers’ compensation.

LexisNexis Online Subscribers: Citations below link to Lexis Advance. Bracketed citations link to lexis.com.

See Hudson v. Lancaster Convalescent Ctr., 2014 S.C. LEXIS 4 (Jan. 8, 2014) [2014 S.C. LEXIS 4 (Jan. 8, 2014)]

See generally Larson’s Workers’ Compensation Law, § 102.04 [102.04]

Source: Larson’s Workers’ Compensation Law, the nation’s leading authority on workers’ compensation law.

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