(a) The following form of endorsement shall be attached and
applicable to the standard workmen's compensation and employer's
liability policy prepared by the National Council on Compensation
Insurance affording coverage under the Federal Coal Mine Health and
Safety Act of 1969, as amended:
It is agreed that: (1) With respect to operations in a State
designated in item 3 of the declarations, the unqualified term
``workmen's compensation law'' includes part C of title IV of the
Federal Coal Mine Health and Safety Act of 1969, 30 U.S.C. section
931-936, and any laws amendatory thereto, or supplementary thereto,
which may be or become effective while this policy is in force, and
definition (a) of Insuring Agreement III is amended accordingly; (2)
with respect to such insurance as is afforded by this endorsement,
(a) the States, if any, named below, shall be deemed to be
designated in item 3 of the declaration; (b) Insuring Agreement
IV(2) is amended to read ``by disease caused or aggravated by
exposure of which the last day of the last exposure, in the
employment of the insured, to conditions causing the disease occurs
during the policy period, or occurred prior to (effective date) and
claim based on such disease is first filed against the insured
during the policy period.''
(b) The term ``effective date'' as used in paragraph (a) of this
section shall be construed to mean the effective date of the first
policy or contract of insurance procured by an operator for purposes of
meeting the obligations imposed on such operator by section 423 of part
C of title IV of the Act.
(c) The Act contains a number of provisions and imposes a number of
requirements on operators which differ in varying degrees from
traditional workmen's compensation concepts. To avoid unnecessary
administrative delays and expense which might be occasioned by the
drafting of an entirely new standard workmen's compensation policy
specially tailored to the Act, the Office has determined that the
existing standard workmen's compensation policy subject to the
endorsement provisions contained in paragraph (a) of this section shall
be acceptable for purposes of writing commercial insurance coverage
under the Act. However, to avoid undue disputes over the meaning of
certain policy provisions and in accordance with the authority
contained in section 423(b)(3) of the Act, the Office has determined
that the following requirements shall be applicable to all commercial
insurance policies obtained by an operator for the purpose of insuring
any liability incurred pursuant to the Act:
(1) Operator liability. (i) Section 415 and part C of title IV of
the Act provide coverage for total disability or death due to
pneumoconiosis to all claimants who meet the eligibility requirements
imposed by the Act. Section 422 of the Act and the regulations duly
promulgated thereunder (part 725 of this subchapter) set forth the
conditions under which a coal mine operator may be adjudicated liable
for the payment of benefits to an eligible claimant for any period
subsequent to December 31, 1973.
(ii) Section 422(c) of the Act prescribes that except as provided
in 422(i) (see paragraph (c)(2) of this section) an operator may be
adjudicated liable for the payment of benefits in any case if the total
disability or death due to pneumoconiosis upon which the claim is
predicated arose at least in part out of employment in a mine in any
period during which it was operated by such operator. The Act does not
require that such employment which contributed to or caused the total
disability or death due to pneumoconiosis occur subsequent to any
particular date in time. The Secretary in establishing a formula for
determining the operator liable for the payment of benefits (see
subpart D of part 725 of this subchapter) in respect of any particular
claim, must therefore, within the framework and intent of title IV of
the Act find in appropriate cases that an operator is liable for the
payment of benefits for some period after December 31, 1973, even
though the employment upon which an operator's liability is based
occurred prior to July 1, 1973, or prior to the effective date of the
Act or the effective date of any amendments thereto, or prior to the
effective date of any policy or contract of insurance obtained by such
operator. The endorsement provisions contained in paragraph (a) of this
section shall be construed to incorporate these requirements in any
policy or contract of insurance obtained by an operator to meet the
obligations imposed on such operator by section 423 of the Act.
(2) Successor liability. Section 422(i) of part C of title IV of
the Act requires that a coal mine operator who after December 30, 1969,
acquired his mine or substantially all of the assets thereof from a
person who was an operator of such mine on or after December 30, 1969,
shall be liable for and shall secure the payment of benefits which
would have been payable by the prior operator with respect to miners
previously employed in such mine if the
acquisition had not occurred and the prior operator had continued to
operate such mine. In the case of an operator who is determined liable
for the payment of benefits under section 422(i) of the Act and part
725 of this subchapter, such liability shall accrue to such operator
regardless of the fact that the miner on whose total disability or
death the claim is predicated was never employed by such operator in
any capacity. The endorsement provisions contained in paragraph (a) of
this section shall be construed to incorporate this requirement in any
policy or contract of insurance obtained by an operator to meet the
obligations imposed on such operator by section 423 of the Act.
(3) Medical eligibility. Pursuant to section 422(h) of part C of
title IV of the Act and the regulations described therein (see subpart
D of part 410 of this title) benefits shall be paid to eligible
claimants on account of total disability or death due to pneumoconiosis
and in cases where the miner on whose death a claim is predicated was
totally disabled by pneumoconiosis at the time of his death regardless
of the cause of such death. The endorsement provisions contained in
paragraph (a) of this section shall be construed to incorporate these
requirements in any policy or contract of insurance obtained by an
operator to meet the obligations imposed on such operator by section
423 of the Act.
(4) Payment of benefits, rates. Section 422(c) of the Act by
incorporating section 412(a) of the Act requires the payment of
benefits at a rate equal to 50 per centum of the minimum monthly
payment to which a Federal employee in grade GS-2, who is totally
disabled is entitled at the time of payment under Chapter 81 of title
5, United States Code. These benefits are augmented on account of
eligible dependents as appropriate (see section 412(a) of part B of
title IV of the Act). Since the dollar amount of benefits payable to
any beneficiary is required to be computed at the time of payment such
amounts may be expected to increase from time to time as changes in the
GS-2 grade are enacted into law. The endorsement provisions contained
in paragraph (a) of this section shall be construed to incorporate in
any policy or contract of insurance obtained by an operator to meet the
obligations imposed on such operator by section 423 of the Act, the
requirement that the payment of benefits to eligible beneficiaries
shall be made in such dollar amounts as are prescribed by section
412(a) of the Act computed at the time of payment.
(5) Compromise and waiver of benefits. Section 422(a) of part C of
title IV of the Act by incorporating sections 15(b) and 16 of the
Longshoremen's and Harbor Workers' Compensation Act (33 U.S.C. 915(b)
and 916) prohibits the compromise and/or waiver of claims for benefits
filed or benefits payable under section 415 and part C of title IV of
the Act. The endorsement provisions contained in paragraph (a) of this
section shall be construed to incorporate these prohibitions in any
policy or contract of insurance obtained by an operator to meet the
obligations imposed on such operator by section 423 of the Act.
(6) Additional requirements. In addition to the requirements
described in paragraph (c)(1) through (5) of this section, the
endorsement provisions contained in paragraph (a) of this section
shall, to the fullest extent possible, be construed to bring any policy
or contract of insurance entered into by an operator for the purpose of
insuring such operator's liability under part C of title IV of the Act
into conformity with the legal requirements placed upon such operator
by section 415 and part C of title IV of the Act and parts 720 and 725
of this subchapter.
(d) Nothing in this section shall relieve any operator or carrier
of the duty to comply with any State workmen's compensation law, except
insofar as such State law is in conflict with the provisions of this
section.