Minnesota Legislature
HF 2721
as introduced - 88th Legislature (2013 - 2014) Posted on 03/06/2014 01:03pm
Current Version - as introduced
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A bill for an act
relating to commerce; private sector self-insuring employers; amending
Minnesota Statutes 2012, sections 79A.04, subdivisions 1, 3a; 79A.09,
subdivision 4; 79A.12; proposing coding for new law in Minnesota Statutes,
chapter 79A.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2012, section 79A.04, subdivision 1, is amended to read:
Subdivision 1.
Annual securing of liability.
Each year every private self-insuring
employer shall secure incurred liabilities for the payment of compensation and the
performance of its obligations and the obligations of all self-insuring employers imposed
under chapter 176new text begin either by participating in the alternative collateral program established
in section 79A.041 ornew text end by renewing the prior year's security deposit or by making a new
deposit of security. If a new deposit is made, it must be posted in the following manner:
within 60 days of the filing of the annual report, the security posting for all prior years
plus one-third of the posting for the current year; by July 31, one-third of the posting for
the current year; by October 31, the final one-third of the posting for the current year.
Sec. 2.
Minnesota Statutes 2012, section 79A.04, subdivision 3a, is amended to read:
Subd. 3a.
Acceptable securities.
The following are acceptable securities and surety
bonds for the purpose of funding self-insurance plans and group self-insurance plans:
(1) direct obligations of the United States government except mortgage-backed
securities of deleted text begin the Government National Mortgage Association;deleted text end new text begin any kind;
new text end
(2) bonds, notes, debentures, and other instruments which are obligations of
agencies and instrumentalities of the United States deleted text begin including, but not limited to, the
Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation,
the Federal Home Loan Bank, the Student Loan Marketing Association, and the Farm
Credit System, and their successors,deleted text end but not including collateralized mortgage obligations
or mortgage pass-through instruments;
(3) bonds or securities that are issued by the state of Minnesota and that are secured
by the full faith and credit of the state;
(4) certificates of deposit which are insured by the Federal Deposit Insurance
Corporation and deleted text begin are issued by a Minnesota depository institutiondeleted text end new text begin approved by the
commissionernew text end ;
(5) obligations of, or instruments unconditionally guaranteed by, deleted text begin Minnesota
depositorydeleted text end new text begin financialnew text end institutions whose long-term debt rating is at least AA-, Aa3, or their
equivalent, by at least two nationally recognized rating agencies;
(6) surety bonds issued by a corporate surety authorized by the commissioner of
commerce to transact such business in the state;
(7) obligations of or instruments unconditionally guaranteed by Minnesota insurance
companies, whose long-term debt rating is at least AA-, Aa3, or their equivalent, by at least
two nationally recognized rating agencies and whose rating is A+ by A. M. Best, Inc.; deleted text begin and
deleted text end
(8) deleted text begin any guarantee from the United States government whereby the payment of the
workers' compensation liability of a self-insurer is guaranteed; and bonds which are the
general obligation of the Minnesota Housing Finance Agencydeleted text end new text begin cash;
new text end
new text begin
(9) time deposits that are fully insured by any federal agency; and
new text end
new text begin (10) letters of credit issued by a financial institution approved by the commissionernew text end .
Sec. 3.
new text begin
[79A.041] ALTERNATIVE COLLATERAL PROGRAM.
new text end
new text begin Subdivision 1. new text end
new text begin Alternative collateral program. new text end
new text begin
Subject to approval by the
commissioner, and notwithstanding any other provisions of this chapter, the security fund
may establish an alternative collateral program for the purpose of accumulating a pool
for funds to meet its obligations under this chapter as a supplement or alternative to the
requirements that members deposit security in section 79A.04.
new text end
new text begin Subd. 2. new text end
new text begin Member participation. new text end
new text begin
If it establishes an alternative collateral program,
the security fund may determine which of its members shall be required to participate in
the program. Members not participating in the program shall deposit security as required
under section 79A.04.
new text end
new text begin Subd. 3. new text end
new text begin Member premiums. new text end
new text begin
The security fund is authorized to charge premiums
to its members participating in the alternative collateral program and to prudently invest
those premiums for the purpose of growing the pool of funds to enable the security fund
to meet its obligations under this chapter.
new text end
new text begin Subd. 4. new text end
new text begin Commissioner's approval. new text end
new text begin
If the security fund establishes the alternative
collateral program, it shall do so by amending its plan of operation, which amendment
must be approved by the commissioner. The security fund shall file its annual premium
rates for the alternative collateral program for the commissioner's review.
new text end
Sec. 4.
Minnesota Statutes 2012, section 79A.09, subdivision 4, is amended to read:
Subd. 4.
Confidential information.
new text begin
(a) If the security fund establishes an
alternative collateral program as permitted under section 79A.041, it may require members
to provide such financial information as the security fund determines is necessary to
operate the alternative collateral program. Any such information provided by members
shall be treated as confidential by the security fund.
new text end
new text begin (b) new text end The security fund may receive private data concerning the financial condition of
private self-insurers whose liabilities to pay compensation have become its responsibility.
The data shall become public data upon its receipt by the security fund.
Sec. 5.
Minnesota Statutes 2012, section 79A.12, is amended to read:
79A.12 MAINTENANCE OF ASSETS OR LINE OF CREDIT TO CONTINUE
PAYMENT OF COMPENSATION OBLIGATIONS.
Subdivision 1.
Assets maintained.
The security fund shall maintain cash, readily
marketable securities, deleted text begin ordeleted text end other assets, or a line of credit, approved by the commissioner,
sufficient to immediately continue the payment of the compensation obligations of an
insolvent deleted text begin private self-insurer pending receipt of the security deposit, surety bond proceeds,
irrevocable letter of credit, or, if necessary, assessment of the membersdeleted text end new text begin membernew text end . The
commissioner may establish the minimum amount to be maintained by, or immediately
available to, the security fund for this purpose.
Subd. 2.
Assessment.
The security fund may assess each of its members a pro
rata share of the funding necessary to carry out its obligation and the purposes of this
chapter. deleted text begin Total annual assessments in any calendar year shall not exceed ten percent of
paid indemnity losses, as defined in section 176.129, made by the self-insured employer
during the preceding calendar year. The annual assessment calculation shall not include
supplementary benefits paid which will be reimbursed by the special compensation fund.
deleted text end Funds obtained by assessments pursuant to this subdivision may only be used for the
purposes of this chapter. The trustees shall certify to the commissioner the collection and
receipt of all money from assessments, noting any delinquencies. The trustees shall take
any action deemed appropriate to collect any delinquent assessments.
Sec. 6. new text begin EFFECTIVE DATE.
new text end
new text begin
Sections 1 to 5 are effective August 1, 2014.
new text end