Bill Text: MN HF2721 | 2013-2014 | 88th Legislature | Introduced
Bill Title: Private sector self-insuring employers provisions modified.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2014-03-06 - Introduction and first reading, referred to Commerce and Consumer Protection Finance and Policy [HF2721 Detail]
Download: Minnesota-2013-HF2721-Introduced.html
1.2relating to commerce; private sector self-insuring employers;amending
1.3Minnesota Statutes 2012, sections 79A.04, subdivisions 1, 3a; 79A.09,
1.4subdivision 4; 79A.12; proposing coding for new law in Minnesota Statutes,
1.5chapter 79A.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. Minnesota Statutes 2012, section 79A.04, subdivision 1, is amended to read:
1.8 Subdivision 1. Annual securing of liability. Each year every private self-insuring
1.9employer shall secure incurred liabilities for the payment of compensation and the
1.10performance of its obligations and the obligations of all self-insuring employers imposed
1.11under chapter 176 either by participating in the alternative collateral program established
1.12in section 79A.041 or by renewing the prior year's security deposit or by making a new
1.13deposit of security. If a new deposit is made, it must be posted in the following manner:
1.14within 60 days of the filing of the annual report, the security posting for all prior years
1.15plus one-third of the posting for the current year; by July 31, one-third of the posting for
1.16the current year; by October 31, the final one-third of the posting for the current year.
1.17 Sec. 2. Minnesota Statutes 2012, section 79A.04, subdivision 3a, is amended to read:
1.18 Subd. 3a. Acceptable securities. The following are acceptable securities and surety
1.19bonds for the purpose of funding self-insurance plans and group self-insurance plans:
1.20(1) direct obligations of the United States government except mortgage-backed
1.21securities ofthe Government National Mortgage Association; any kind;
1.22(2) bonds, notes, debentures, and other instruments which are obligations of
1.23agencies and instrumentalities of the United Statesincluding, but not limited to, the
1.24Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation,
2.1the Federal Home Loan Bank, the Student Loan Marketing Association, and the Farm
2.2Credit System, and their successors, but not including collateralized mortgage obligations
2.3or mortgage pass-through instruments;
2.4(3) bonds or securities that are issued by the state of Minnesota and that are secured
2.5by the full faith and credit of the state;
2.6(4) certificates of deposit which are insured by the Federal Deposit Insurance
2.7Corporation andare issued by a Minnesota depository institution approved by the
2.8commissioner;
2.9(5) obligations of, or instruments unconditionally guaranteed by,Minnesota
2.10depository financial institutions whose long-term debt rating is at least AA-, Aa3, or their
2.11equivalent, by at least two nationally recognized rating agencies;
2.12(6) surety bonds issued by a corporate surety authorized by the commissioner of
2.13commerce to transact such business in the state;
2.14(7) obligations of or instruments unconditionally guaranteed by Minnesota insurance
2.15companies, whose long-term debt rating is at least AA-, Aa3, or their equivalent, by at least
2.16two nationally recognized rating agencies and whose rating is A+ by A. M. Best, Inc.;and
2.17(8)any guarantee from the United States government whereby the payment of the
2.18workers' compensation liability of a self-insurer is guaranteed; and bonds which are the
2.19general obligation of the Minnesota Housing Finance Agency cash;
2.20(9) time deposits that are fully insured by any federal agency; and
2.21(10) letters of credit issued by a financial institution approved by the commissioner.
2.22 Sec. 3. [79A.041] ALTERNATIVE COLLATERAL PROGRAM.
2.23 Subdivision 1. Alternative collateral program. Subject to approval by the
2.24commissioner, and notwithstanding any other provisions of this chapter, the security fund
2.25may establish an alternative collateral program for the purpose of accumulating a pool
2.26for funds to meet its obligations under this chapter as a supplement or alternative to the
2.27requirements that members deposit security in section 79A.04.
2.28 Subd. 2. Member participation. If it establishes an alternative collateral program,
2.29the security fund may determine which of its members shall be required to participate in
2.30the program. Members not participating in the program shall deposit security as required
2.31under section 79A.04.
2.32 Subd. 3. Member premiums. The security fund is authorized to charge premiums
2.33to its members participating in the alternative collateral program and to prudently invest
2.34those premiums for the purpose of growing the pool of funds to enable the security fund
2.35to meet its obligations under this chapter.
3.1 Subd. 4. Commissioner's approval. If the security fund establishes the alternative
3.2collateral program, it shall do so by amending its plan of operation, which amendment
3.3must be approved by the commissioner. The security fund shall file its annual premium
3.4rates for the alternative collateral program for the commissioner's review.
3.5 Sec. 4. Minnesota Statutes 2012, section 79A.09, subdivision 4, is amended to read:
3.6 Subd. 4. Confidential information. (a) If the security fund establishes an
3.7alternative collateral program as permitted under section 79A.041, it may require members
3.8to provide such financial information as the security fund determines is necessary to
3.9operate the alternative collateral program. Any such information provided by members
3.10shall be treated as confidential by the security fund.
3.11(b) The security fund may receive private data concerning the financial condition of
3.12private self-insurers whose liabilities to pay compensation have become its responsibility.
3.13The data shall become public data upon its receipt by the security fund.
3.14 Sec. 5. Minnesota Statutes 2012, section 79A.12, is amended to read:
3.1579A.12 MAINTENANCE OF ASSETS OR LINE OF CREDIT TO CONTINUE
3.16PAYMENT OF COMPENSATION OBLIGATIONS.
3.17 Subdivision 1. Assets maintained. The security fund shall maintain cash, readily
3.18marketable securities,or other assets, or a line of credit, approved by the commissioner,
3.19sufficient to immediately continue the payment of the compensation obligations of an
3.20insolventprivate self-insurer pending receipt of the security deposit, surety bond proceeds,
3.21irrevocable letter of credit, or, if necessary, assessment of the members member. The
3.22commissioner may establish the minimum amount to be maintained by, or immediately
3.23available to, the security fund for this purpose.
3.24 Subd. 2. Assessment. The security fund may assess each of its members a pro
3.25rata share of the funding necessary to carry out its obligation and the purposes of this
3.26chapter.Total annual assessments in any calendar year shall not exceed ten percent of
3.27paid indemnity losses, as defined in section
176.129, made by the self-insured employer
3.28during the preceding calendar year. The annual assessment calculation shall not include
3.29supplementary benefits paid which will be reimbursed by the special compensation fund.
3.30 Funds obtained by assessments pursuant to this subdivision may only be used for the
3.31purposes of this chapter. The trustees shall certify to the commissioner the collection and
3.32receipt of all money from assessments, noting any delinquencies. The trustees shall take
3.33any action deemed appropriate to collect any delinquent assessments.
4.1 Sec. 6. EFFECTIVE DATE.
4.2Sections 1 to 5 are effective August 1, 2014.
1.3Minnesota Statutes 2012, sections 79A.04, subdivisions 1, 3a; 79A.09,
1.4subdivision 4; 79A.12; proposing coding for new law in Minnesota Statutes,
1.5chapter 79A.
1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.7 Section 1. Minnesota Statutes 2012, section 79A.04, subdivision 1, is amended to read:
1.8 Subdivision 1. Annual securing of liability. Each year every private self-insuring
1.9employer shall secure incurred liabilities for the payment of compensation and the
1.10performance of its obligations and the obligations of all self-insuring employers imposed
1.11under chapter 176 either by participating in the alternative collateral program established
1.12in section 79A.041 or by renewing the prior year's security deposit or by making a new
1.13deposit of security. If a new deposit is made, it must be posted in the following manner:
1.14within 60 days of the filing of the annual report, the security posting for all prior years
1.15plus one-third of the posting for the current year; by July 31, one-third of the posting for
1.16the current year; by October 31, the final one-third of the posting for the current year.
1.17 Sec. 2. Minnesota Statutes 2012, section 79A.04, subdivision 3a, is amended to read:
1.18 Subd. 3a. Acceptable securities. The following are acceptable securities and surety
1.19bonds for the purpose of funding self-insurance plans and group self-insurance plans:
1.20(1) direct obligations of the United States government except mortgage-backed
1.21securities of
1.22(2) bonds, notes, debentures, and other instruments which are obligations of
1.23agencies and instrumentalities of the United States
1.24
2.1
2.2
2.3or mortgage pass-through instruments;
2.4(3) bonds or securities that are issued by the state of Minnesota and that are secured
2.5by the full faith and credit of the state;
2.6(4) certificates of deposit which are insured by the Federal Deposit Insurance
2.7Corporation and
2.8commissioner;
2.9(5) obligations of, or instruments unconditionally guaranteed by,
2.10
2.11equivalent, by at least two nationally recognized rating agencies;
2.12(6) surety bonds issued by a corporate surety authorized by the commissioner of
2.13commerce to transact such business in the state;
2.14(7) obligations of or instruments unconditionally guaranteed by Minnesota insurance
2.15companies, whose long-term debt rating is at least AA-, Aa3, or their equivalent, by at least
2.16two nationally recognized rating agencies and whose rating is A+ by A. M. Best, Inc.;
2.17(8)
2.18
2.19
2.20(9) time deposits that are fully insured by any federal agency; and
2.21(10) letters of credit issued by a financial institution approved by the commissioner.
2.22 Sec. 3. [79A.041] ALTERNATIVE COLLATERAL PROGRAM.
2.23 Subdivision 1. Alternative collateral program. Subject to approval by the
2.24commissioner, and notwithstanding any other provisions of this chapter, the security fund
2.25may establish an alternative collateral program for the purpose of accumulating a pool
2.26for funds to meet its obligations under this chapter as a supplement or alternative to the
2.27requirements that members deposit security in section 79A.04.
2.28 Subd. 2. Member participation. If it establishes an alternative collateral program,
2.29the security fund may determine which of its members shall be required to participate in
2.30the program. Members not participating in the program shall deposit security as required
2.31under section 79A.04.
2.32 Subd. 3. Member premiums. The security fund is authorized to charge premiums
2.33to its members participating in the alternative collateral program and to prudently invest
2.34those premiums for the purpose of growing the pool of funds to enable the security fund
2.35to meet its obligations under this chapter.
3.1 Subd. 4. Commissioner's approval. If the security fund establishes the alternative
3.2collateral program, it shall do so by amending its plan of operation, which amendment
3.3must be approved by the commissioner. The security fund shall file its annual premium
3.4rates for the alternative collateral program for the commissioner's review.
3.5 Sec. 4. Minnesota Statutes 2012, section 79A.09, subdivision 4, is amended to read:
3.6 Subd. 4. Confidential information. (a) If the security fund establishes an
3.7alternative collateral program as permitted under section 79A.041, it may require members
3.8to provide such financial information as the security fund determines is necessary to
3.9operate the alternative collateral program. Any such information provided by members
3.10shall be treated as confidential by the security fund.
3.11(b) The security fund may receive private data concerning the financial condition of
3.12private self-insurers whose liabilities to pay compensation have become its responsibility.
3.13The data shall become public data upon its receipt by the security fund.
3.14 Sec. 5. Minnesota Statutes 2012, section 79A.12, is amended to read:
3.1579A.12 MAINTENANCE OF ASSETS OR LINE OF CREDIT TO CONTINUE
3.16PAYMENT OF COMPENSATION OBLIGATIONS.
3.17 Subdivision 1. Assets maintained. The security fund shall maintain cash, readily
3.18marketable securities,
3.19sufficient to immediately continue the payment of the compensation obligations of an
3.20insolvent
3.21
3.22commissioner may establish the minimum amount to be maintained by, or immediately
3.23available to, the security fund for this purpose.
3.24 Subd. 2. Assessment. The security fund may assess each of its members a pro
3.25rata share of the funding necessary to carry out its obligation and the purposes of this
3.26chapter.
3.27
3.28
3.29
3.30 Funds obtained by assessments pursuant to this subdivision may only be used for the
3.31purposes of this chapter. The trustees shall certify to the commissioner the collection and
3.32receipt of all money from assessments, noting any delinquencies. The trustees shall take
3.33any action deemed appropriate to collect any delinquent assessments.
4.1 Sec. 6. EFFECTIVE DATE.
4.2Sections 1 to 5 are effective August 1, 2014.
