STATE OF SOUTH DAKOTA
OFFICE OF
THE ATTORNEY GENERAL

February 15, 1972

Henry Carter
Department of Labor and
Management Relations
Pierre, South Dakota 57501

OFFICIAL OPINION NO. 72-06

Employers have the option of purchasing either Workmen's Compensation Insurance, Occupational Disease Insurance, or both.

Dear Mr. Carter:

You have asked for an official opinion on the following subject:

Prior to July 1, 1971, employers, in some instances, were purchasing Workmen's Compensation Insurance policies on their employees and covering occupational diseases under a self-insurance program. The 1971 Legislature repealed SDCL 62-8-7 which took away an employer's right to exclude himself from the Occupational Disease Law. Several workmen's compensation insurance carriers have interpreted the repeal of that statute as meaning that an employer no longer had the option to be a self-insuror for occupational diseases.

The question you have asked is as follows:

Do employers still have the option of being self-insurors for occupational diseases while carrying workmen's compensation insurance?

The Workmen's Compensation Law was passed in 1917 to cover persons who were injured in accidents which arose out of their employment. This social legislation took the economic burden of such accidents from the employees and placed it upon the employers. Employers were given the option of purchasing insurance coverage or of becoming self-insurors under the act.

In 1939, the Occupational Disease Law was enacted. This legislation is similar to the Workmen's Compensation Law, except it covers diseases arising out of a person's occupation, rather than accidents. What is now SDCL 62-8-6 makes the Occupational Disease Law mandatory upon every employer who is subject to the Workmen's Compensation Law.

In past years, some employers found it economically advantageous to become a self-insuror under one law and to become insured by an insurance carrier under the other law. SDCL 62-8-7, prior to its repeal by the 1971 Legislature, provided an employer could withdraw from the provisions of the Occupational Disease Law entirely by giving proper notice to the Commissioner of Labor and Management Relations and to his employees. Since the repeal of that act, employers have no choice; they must carry some type of occupational disease coverage upon their employees.

In going through the Workmen's Compensation Act, and the Occupational Disease Act, I have been unable to find any section which would compel an employer to insure both of these risks under the same insurance policy.

SDCL 62-5-1 through 5 provides that an employer may satisfy the Workmen's Compensation Law by purchasing a Contract of Workmen's Compensation Insurance or becoming a self-insuror. SDCL 62-8-6 provides that an employer may satisfy the Occupational Disease Law by the same methods which are available for satisfaction of the Workmen's Compensation Law. There is no statute which requires the use of the same methods for the satisfaction of both laws.

Therefore, it is my opinion that an employer may either purchase an insurance policy to satisfy both laws, he may become a self-insuror to satisfy both laws, or he may purchase an insurance policy to satisfy one law and become a self-insuror to satisfy the other law.

Respectfully submitted,

Gordon Mydland
Attorney General