HF 372

1st Engrossment - 92nd Legislature (2021 - 2022) Posted on 02/11/2022 11:11am

A bill for an act
relating to workers' compensation; modifying data service organizations; authorizing
rulemaking; amending Minnesota Statutes 2020, section 79.61, subdivision 1.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2020, section 79.61, subdivision 1, is amended to read:

Subdivision 1.

Required activity.

new text begin (a) new text end Any data service organization shall perform the
following activities:

(1) file statistical plans, including classification definitions, amendments to the plans,
and definitions, with the commissioner for approval, and assign each compensation risk
written by its members to its approved classification for reporting purposes;

(2) establish requirements for data reporting and monitoring methods to maintain a high
quality database;

(3) prepare and distribute a periodic report, in a form prescribed by the commissioner,
on ratemaking including deleted text begin , deleted text end but not limited to the following elements:

(i) deleted text begin development factors and alternative derivations deleted text end new text begin losses developed to their ultimate
level new text end ;

(ii) deleted text begin trend factors and alternative derivations and applications deleted text end new text begin trended losses new text end ;

(iii) new text begin loss adjustment expenses;
new text end

new text begin (iv) new text end pure premium relativities for the approved classification system for which data are
reported, provided that the relativities for insureds engaged in similar occupations and
presenting substantially similar risks shall, if different, differ by at least ten percent; and

deleted text begin (iv) deleted text end new text begin (v) new text end an evaluation of the effects of changes in law on loss data deleted text begin . deleted text end new text begin ;
new text end

deleted text begin The report shall also include explicit discussion and explanation of methodology,
alternatives examined, assumptions adopted, and areas of judgment and reasoning supporting
judgments entered into, and the effect of various combinations of these elements on
indications for modification of an overall pure premium rate level change. The pure premium
relativities and rate level indications shall not include a loading for expenses or profit and
no expense or profit data or recommendations relating to expense or profit shall be included
in the report or collected by a data service organization;
deleted text end

(4) collect, compile, summarize, and distribute data from members or other sources
pursuant to a statistical plan approved by the commissioner;

(5) prepare merit rating plan and calculate any variable factors necessary for utilization
of the plan. Such a plan may be used by any of its members, at the option of the member
provided that the application of a plan shall not result in rates that are unfairly discriminatory;

(6) provide loss data specific to an insured to the insured at a reasonable cost;

(7) distribute information to an insured or interested party that is filed with the
commissioner and is open to public inspection; and

(8) assess its members for operating expenses on a fair and equitable basis.

new text begin (b) The report under paragraph (a), clause (3), shall also include explicit discussion and
explanation of methodology, alternatives examined, assumptions adopted, and areas of
judgment and reasoning supporting judgments entered into, and the effect of various
combinations of these elements on indications for modification of an overall pure premium
rate level change. The pure premium relativities and rate level indications shall not include
a loading for expenses or profit and no expense or profit data or recommendations relating
to expense or profit shall be included in the report or collected by a data service organization.
For purposes of this subdivision, "expenses" means expenses other than loss adjustment
expenses.
new text end

Sec. 2. new text begin EXPEDITED RULEMAKING AUTHORIZED.
new text end

new text begin The commissioner shall amend Minnesota Rules, parts 2705.1000, item B, subitem (4);
2705.0200, subpart 7; 2705.1700, subpart 2; and 2705.1800, item B, or other parts of
Minnesota Rules, chapter 2705, as necessary to permit a data service organization to collect
loss adjustment expense data and to consider and include in its ratemaking report losses
developed to their ultimate value, trended losses, and loss adjustment expenses. The
commissioner may use the expedited rulemaking procedures under Minnesota Statutes,
section 14.389.
new text end