Upon receipt of the funds assessed on members, the association may set aside funds for the administration of its affairs, and the balance of the funds shall be deposited to an insolvency fund under the following terms:
(1) The fund is created for the purpose of assuring payment of workers' compensation claims against members of the association who become insolvent; but only those claims which accrue while the insolvent employer is a member of the association and accrue prior to the determination of insolvency or within 30 days thereafter. The obligation of the fund shall be limited to the obligation of the insolvent employer under the Workers' Compensation Act, in an amount not to exceed 150 percent of the amount of security as determined by the department as of the last annual financial review. The fund shall have all defenses of and shall be subrogated to all rights of the insolvent employer. The fund shall not be liable for any penalties or interest assessed against the employer.
(2) It shall be the duty of the Department of Labor to determine insolvency of any self-insurer employers, and to notify the association of its determination. Members and directors of the association are specifically forbidden to be given information on the financial condition of any members except the fact of determination of insolvency.
(3) The Secretary of the Department of Labor, or his representative, will at all reasonable times have full and free access to the books and records of the association and may audit the association's financial affairs as he deems necessary. Should the secretary deem the balance in the insolvency fund insufficient to meet projected liabilities, he shall inform the board of directors, and after consultation with them, he shall set the amount which he deems sufficient and the board of directors shall levy assessments as provided herein to secure that amount.
(4) The association shall be subrogated to all rights of any claimant whose claim it pays and shall have a claim against the member employer for all such claims and expenses of administration.
(5) If at any time the insolvency fund is insufficient to pay all claims then owing, the funds available shall be prorated and the unpaid portion shall be paid as soon thereafter as sufficient funds become available.