HF 2356

1st Engrossment - 87th Legislature (2011 - 2012) Posted on 03/08/2012 03:14pm

A bill for an act
relating to insurance; requiring the Workers' Compensation Reinsurance
Association to comply with the open meeting law and the Data Practices Act;
modifying board membership; amending Minnesota Statutes 2010, sections
79.34, subdivision 1; 79.37.

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

Section 1.

Minnesota Statutes 2010, section 79.34, subdivision 1, is amended to read:

Subdivision 1.

Conditions requiring membership.

The nonprofit association
known as the Workers' Compensation Reinsurance Association may be incorporated under
chapter 317A with all the powers of a corporation formed under that chapter, except that
if the provisions of that chapter are inconsistent with sections 79.34 to 79.40, sections
79.34 to 79.40 govern. Each insurer as defined by section 79.01, subdivision 2, shall, as
a condition of its authority to transact workers' compensation insurance in this state, be
a member of the reinsurance association and is bound by the plan of operation of the
reinsurance association; provided, that all affiliated insurers within a holding company
system as defined in chapter 60D are considered a single entity for purposes of the exercise
of all rights and duties of membership in the reinsurance association. Each self-insurer
approved under section 176.181 and each political subdivision that self-insures shall, as a
condition of its authority to self-insure workers' compensation liability in this state, be a
member of the reinsurance association and is bound by its plan of operation; provided that:

(1) all affiliated companies within a holding company system, as determined by
the commissioner of labor and industry in a manner consistent with the standards and
definitions in chapter 60D, are considered a single entity for purposes of the exercise of all
rights and duties of membership in the reinsurance association; and

(2) all group self-insurers granted authority to self-insure pursuant to section 176.181
are considered single entities for purposes of the exercise of all the rights and duties of
membership in the reinsurance association. As a condition of its authority to self-insure
workers' compensation liability, and for losses incurred after December 31, 1983, the
state is a member of the reinsurance association and is bound by its plan of operation.
The commissioner of administration represents the state in the exercise of all the rights
and duties of membership in the reinsurance association. The amounts necessary to pay
the state's premiums required for coverage by the Workers' Compensation Reinsurance
Association are appropriated from the general fund to the commissioner of administration.
The University of Minnesota shall pay its portion of workers' compensation reinsurance
premiums directly to the Workers' Compensation Reinsurance Association. For the
purposes of this section, "state" means the administrative branch of state government,
the legislative branch, the judicial branch, the University of Minnesota, and any other
entity whose workers' compensation liability is paid from the state revolving fund. The
commissioner of management and budget may calculate, prorate, and charge a department
or agency the portion of premiums paid to the reinsurance association for employees who
are paid wholly or in part by federal funds, dedicated funds, or special revenue funds.
The reinsurance association is not a state agency. Actions of the reinsurance association
and its board of directors and actions of the commissioner of labor and industry with
respect to the reinsurance association are deleted text begin not deleted text end subject to chapters 13 and new text begin 13D, and are not
subject to chapter new text end 15. All property owned by the association is exempt from taxation. The
reinsurance association is not obligated to make any payments or pay any assessments to
any funds or pools established pursuant to this chapter or chapter 176 or any other law.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective August 1, 2012, and applies to
actions that take place on or after that date.
new text end

Sec. 2.

Minnesota Statutes 2010, section 79.37, is amended to read:

79.37 BOARD OF DIRECTORS.

A board of directors of the reinsurance association is created and is responsible
for the operation of the reinsurance association consistent with the plan of operation
and sections 79.34 to 79.40. The board consists of deleted text begin 13 deleted text end new text begin 14 new text end directors. Four directors shall
represent insurers deleted text begin , deleted text end new text begin ; new text end two directors shall represent employers deleted text begin , deleted text end new text begin ; new text end two new text begin directors new text end shall represent
new text begin individual new text end self-insurers; new text begin one director shall represent group self-insurers; new text end two directors shall
represent employees; the commissioner of management and budget and the executive
director of the state Board of Investment or their designees shall serve as directors; and
one director shall represent the public. Insurer members of the reinsurance association
shall elect the directors who represent insurers; self-insurer members of the reinsurance
association shall elect the directors who represent self-insurers; and the commissioner of
labor and industry shall appoint the remaining directors for the terms authorized in the
plan of operation. Each director is entitled to one vote. Terms of the directors shall be
staggered so that the terms of all the directors do not expire at the same time and so that a
director does not serve a term of more than four years. The board shall select a chair and
other officers it deems appropriate.

A majority of the directors currently holding office constitutes a quorum. Action
may be taken by a majority vote of the directors present.

The board shall take reasonable and prudent action regarding the management of
the reinsurance association including but not limited to determining the entity who shall
manage the daily affairs of the reinsurance association. The board shall report to the
governor of its actions regarding the entity selected to manage the reinsurance association
and the reasons for the selection.