SF 1533

as introduced - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to workers' compensation; modifying 
  1.3             provisions relating to insurance requirements and 
  1.4             regulations; permitting certain collective bargaining 
  1.5             agreements; changing certain benefit provisions and 
  1.6             procedures; appropriating money; amending Minnesota 
  1.7             Statutes 1994, sections 79.01, subdivision 1; 79.074, 
  1.8             by adding subdivisions; 79.50; 79.59, subdivision 4; 
  1.9             176.021, subdivision 3a; 176.132, subdivision 3; 
  1.10            176.82; 182.659, by adding a subdivision; and 363.02, 
  1.11            subdivision 5; proposing coding for new law in 
  1.12            Minnesota Statutes, chapters 79; 79A; and 176; 
  1.13            repealing Minnesota Statutes 1994, sections 79.51; 
  1.14            79.52; 79.53; 79.54; 79.55; 79.56; 79.57; 79.58; 
  1.15            79.59, subdivisions 1, 2, 3, and 5; 79.60; 79.61; and 
  1.16            79.62. 
  1.17  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.18                             ARTICLE 1
  1.19                     INSURANCE RATE REGULATION
  1.20     Section 1.  Minnesota Statutes 1994, section 79.01, 
  1.21  subdivision 1, is amended to read: 
  1.22     Subdivision 1.  [TERMS.] Unless the language or context 
  1.23  clearly indicates that a different meaning is intended, the 
  1.24  following terms, for the purposes of sections 79.01 to 
  1.25  79.211 this chapter, shall have the meanings ascribed to given 
  1.26  them. 
  1.27     Sec. 2.  Minnesota Statutes 1994, section 79.074, is 
  1.28  amended by adding a subdivision to read: 
  1.29     Subd. 3.  [UNFAIRLY DISCRIMINATORY.] A rate, rating plan, 
  1.30  or schedule of rates is unfairly discriminatory in relation to 
  1.31  another if it clearly fails to reflect equitably the differences 
  2.1   in expected losses, expenses, and the degree of risk.  Rates, 
  2.2   rating plans, or schedules of rates are not unfairly 
  2.3   discriminatory because different premiums result for 
  2.4   policyholders with like loss exposures but different expense 
  2.5   factors, or like expense factors but different loss exposures, 
  2.6   so long as the rates, rating plan, or schedule of rates reflect 
  2.7   the differences with reasonable accuracy. 
  2.8      Sec. 3.  Minnesota Statutes 1994, section 79.074, is 
  2.9   amended by adding a subdivision to read: 
  2.10     Subd. 4.  [EXCESSIVENESS.] Rates, rating plans, or 
  2.11  schedules of rates are not excessive if the expected 
  2.12  underwriting profit, together with expected income from invested 
  2.13  reserves for the market in question, that would accrue to an 
  2.14  insurer would be reasonable in relation to the risk undertaken 
  2.15  by the insurer in transacting the business or if expenses are 
  2.16  reasonable in relation to the services rendered.  The burden is 
  2.17  on the insurer to show that the income or expenses are 
  2.18  reasonable. 
  2.19     The commissioner shall monitor the income and profit 
  2.20  actually earned.  If it is in excess of the expected profit and 
  2.21  return, the commissioner shall provide appropriate adjustments 
  2.22  in future rates or provide other appropriate relief. 
  2.23     Sec. 4.  Minnesota Statutes 1994, section 79.074, is 
  2.24  amended by adding a subdivision to read: 
  2.25     Subd. 5.  [FLEXIBLE RANGE OF RATES.] An insurer may write 
  2.26  insurance at rates that are lower than the rates approved by the 
  2.27  commissioner if the rates are not unfairly discriminatory. 
  2.28     Sec. 5.  [79.086] [BUNDLING PROHIBITED.] 
  2.29     No insurer, data service organization, association, or the 
  2.30  assigned risk plan may accept more than one application for a 
  2.31  workers' compensation insurance minimum premium policy presented 
  2.32  in a single package.  Any multiple application shall be reported 
  2.33  to the special compensation fund. 
  2.34     Sec. 6.  [79.254] [PRIOR RATES.] 
  2.35     Subdivision 1.  [PRESUMPTION.] Rates, schedules of rates, 
  2.36  and rating plans that have been filed with the commissioner 
  3.1   before January 1, 1995, are conclusively presumed to satisfy the 
  3.2   requirements of this article until the initial schedule of rates 
  3.3   has been approved by order of the commissioner. 
  3.4      Subd. 2.  [FILING.] If a rate was not filed by an insurer 
  3.5   before the effective date of this section, an insurer may file a 
  3.6   rate for any classification for which a rate was not previously 
  3.7   filed.  The rate shall not be used until it is approved by the 
  3.8   commissioner.  The commissioner may approve a rate up to the 
  3.9   rate level approved for use by the assigned risk plan for that 
  3.10  rate class.  The rates may remain in force until the 
  3.11  commissioner has approved a schedule of rates under section 
  3.12  79.71.  If the commissioner disapproves of any rate or rating 
  3.13  plan pursuant to authority granted in this subdivision, the 
  3.14  disapproval shall not be subject to chapter 14 and the decision 
  3.15  shall be final. 
  3.16     Subd. 3.  [APPROVAL.] Until the commissioner issues an 
  3.17  order approving a schedule of rates under section 79.71, an 
  3.18  insurer may not, through the use of any rating plan, charge a 
  3.19  rate higher than the rates applicable to the insurer under 
  3.20  subdivision 1 or 2.  This subdivision does not prohibit the use 
  3.21  of approved experience rate plans or retrospective rating plans 
  3.22  that have been adopted in the filed rates by insurers, the 
  3.23  assigned risk plan, or a data service organization.  This 
  3.24  section does not prohibit the adjustment of a schedule of rates 
  3.25  to reflect adjustments in the assessment rate for the special 
  3.26  compensation fund, any adjustment in the assessment for the 
  3.27  assigned risk plan pursuant to section 79.251, subdivision 5, 
  3.28  any adjustment in the assessment for the Minnesota insurance 
  3.29  guaranty association pursuant to section 60C.05, or any other 
  3.30  assessment required by law.  
  3.31     Subd. 4.  [INTERIM RATES.] Rates, schedules of rates, and 
  3.32  rating plans filed after December 31, 1994, may not be used 
  3.33  after the effective date of this article and the rates, 
  3.34  schedules of rates, and rating plans in effect prior to January 
  3.35  1, 1995, are reinstated. 
  3.36     Subd. 5.  [COMPLIANCE.] No insurer may avoid the 
  4.1   application of this section by limiting or denying the use of 
  4.2   credits or other adjustments to the rates that were available 
  4.3   and used before January 1, 1995.  The commissioner shall monitor 
  4.4   the activities of insurers to ensure that the requirements of 
  4.5   this section are satisfied.  
  4.6      Subd. 6.  [EFFECTIVE DATE.] This section shall apply only 
  4.7   to policies issued or renewed to be effective after the 
  4.8   effective date of this section. 
  4.9      Sec. 7.  Minnesota Statutes 1994, section 79.50, is amended 
  4.10  to read: 
  4.11     79.50 [PURPOSES.] 
  4.12     The purposes of chapter 79 are to:  
  4.13     (a) Promote public welfare by regulating insurance rates so 
  4.14  that premiums are not excessive, inadequate, or unfairly 
  4.15  discriminatory; 
  4.16     (b) Promote quality and integrity in the databases used in 
  4.17  workers' compensation insurance ratemaking; 
  4.18     (c) Prohibit price fixing agreements and anticompetitive 
  4.19  behavior by insurers; and 
  4.20     (d) Promote price competition and provide rates that are 
  4.21  responsive to competitive market conditions; 
  4.22     (e) Provide a means of establishment of proper rates if 
  4.23  competition is not effective; 
  4.24     (f) Define the function and scope of activities of data 
  4.25  service organizations; 
  4.26     (g) Provide for an orderly transition from regulated rates 
  4.27  to competitive market conditions; and 
  4.28     (h) Encourage insurers to provide alternative innovative 
  4.29  methods whereby employers can meet the requirements imposed by 
  4.30  section 176.181.  
  4.31     Sec. 8.  Minnesota Statutes 1994, section 79.59, 
  4.32  subdivision 4, is amended to read: 
  4.33     Subd. 4.  [EXCEPTIONS.] The fact that insurers writing not 
  4.34  more than 25 percent of the workers' compensation premiums in 
  4.35  Minnesota use the same rates, rating plans, rating schedules, 
  4.36  rating rules, underwriting rules, or similar materials shall not 
  5.1   alone constitute a violation of subdivision 1 or 2.  
  5.2      Two or more insurers under common ownership or operating 
  5.3   under common management or control may act in concert between or 
  5.4   among themselves with respect to matters authorized under this 
  5.5   chapter as if they constituted a single insurer, provided that 
  5.6   the rating plan of such insurers shall be considered to be a 
  5.7   single plan for the purposes of determining unfair 
  5.8   discrimination.  
  5.9      Sec. 9.  [79.71] [RATES; HEARINGS.] 
  5.10     Subdivision 1.  [PETITION FOR ADOPTION OF RATE 
  5.11  SCHEDULE.] (a) The commissioner shall adopt a schedule of 
  5.12  workers' compensation insurance rates for use in this state for 
  5.13  each classification under which business is written.  The 
  5.14  schedule of rates shall not be excessive, inadequate, or 
  5.15  unfairly discriminatory.  
  5.16     For purposes of this section, "association" means an 
  5.17  association of insurers.  
  5.18     (b) In adopting a schedule of rates, the commissioner may 
  5.19  act on the written petition of an association, the department of 
  5.20  labor and industry, or any other interested party who requests 
  5.21  that a hearing be held to adopt a schedule of rates.  Upon 
  5.22  receipt of a petition requesting a hearing for adoption of a 
  5.23  schedule of rates, the commissioner shall determine whether the 
  5.24  petition sufficiently sets forth facts that show that the 
  5.25  existing schedule of rates is excessive, inadequate, unfairly 
  5.26  discriminatory, or otherwise in need of modification so as to 
  5.27  indicate the need to hold a hearing.  If an association is the 
  5.28  petitioner, the commissioner may decline to grant a hearing if 
  5.29  the association has failed to provide information requested by 
  5.30  previous orders that modify the schedule of rates, if the 
  5.31  request was reasonable.  The commissioner may accept or reject 
  5.32  the petition for a hearing and shall give notice of a 
  5.33  determination to the petitioning party.  If the commissioner 
  5.34  rejects the petition, the commissioner shall notify the 
  5.35  petitioning party of the reasons for the rejection. 
  5.36     Subd. 2.  [HEARING.] (a) The commissioner shall determine, 
  6.1   within 90 days of receipt of the petition, whether to accept or 
  6.2   reject the petition.  If the commissioner accepts the petition 
  6.3   for hearing, the commissioner shall order a hearing on matters 
  6.4   set forth in the petition.  Each insurer shall notify their 
  6.5   insureds that a hearing on a rate increase will be held.  The 
  6.6   form of the notice to be sent to each insured shall be 
  6.7   prescribed by the commissioner.  The hearing shall be held 
  6.8   pursuant to the contested case procedures in chapter 14.  The 
  6.9   burden of proof is on the petitioning party. 
  6.10     (b) The commissioner shall forward a copy of the order for 
  6.11  hearing to the chief administrative law judge.  The chief 
  6.12  administrative law judge must, within 30 days of the receipt of 
  6.13  the order, set a hearing date, assign an administrative law 
  6.14  judge to hear the matter, and notify the commissioner of the 
  6.15  hearing date and the administrative law judge assigned to hear 
  6.16  the matter.  The commissioner shall publish notice of the 
  6.17  hearing in the State Register at least 20 days before the 
  6.18  hearing date.  Approval of the notice before publication by the 
  6.19  administrative law judge is not required. 
  6.20     (c) The administrative law judge may admit without the 
  6.21  traditional evidentiary foundation documentary and statistical 
  6.22  evidence accepted and relied on by an expert whose expertise is 
  6.23  related to workers' compensation rate matters.  An employer, 
  6.24  person representing a group of employers, or other person that 
  6.25  will be directly affected by a change in an insurer's existing 
  6.26  rate level or rating plan, and the commissioner of labor and 
  6.27  industry, must be allowed to intervene and participate in any 
  6.28  hearing to challenge the rate level or rating plan as being 
  6.29  excessive, inadequate, or unfairly discriminatory. 
  6.30     (d) The report of the administrative law judge must be 
  6.31  issued within 180 days from the date of receipt of the order by 
  6.32  the chief administrative law judge.  Within 60 days of the 
  6.33  completion of the hearing, the administrative law judge must 
  6.34  submit a report to the commissioner.  The parties, or the 
  6.35  administrative law judge if the parties cannot agree, shall 
  6.36  adjust all time requirements under the contested case procedures 
  7.1   to conform with the time requirements set forth in this 
  7.2   subdivision.  After the close of the hearing record, the 
  7.3   administrative law judge shall transmit to the commissioner the 
  7.4   entire record of the hearing, including the transcript, 
  7.5   exhibits, and all other material properly accepted into 
  7.6   evidence, together with the finding of facts, conclusions, and 
  7.7   recommended order made by the administrative law judge.  The 
  7.8   time for submitting the report may be extended by the chief 
  7.9   administrative law judge for good cause. 
  7.10     Subd. 3.  [HEARING DETERMINATION.] The commissioner may 
  7.11  accept, reject, or modify, in whole or in part, matters raised 
  7.12  in the petition for adoption of the schedule of rates or matters 
  7.13  raised in the findings and recommendations of the administrative 
  7.14  law judge.  The commissioner's determination shall be based upon 
  7.15  substantial evidence.  The commissioner of commerce is an 
  7.16  interested party if the commissioner's decision is appealed. 
  7.17     Subd. 4.  [DEADLINE FOR DETERMINATION.] The commissioner 
  7.18  shall make a final determination with respect to adoption of a 
  7.19  schedule of rates within 90 days after receipt of the 
  7.20  administrative law judge's report.  If the commissioner fails to 
  7.21  act within the 90-day period, the findings, conclusions, and 
  7.22  recommended order of the administrative law judge become the 
  7.23  final order of the commissioner on the 91st day after receipt. 
  7.24     Subd. 5.  [CONSULTANTS; COMMISSIONER OF COMMERCE.] The 
  7.25  commissioner of commerce and the office of administrative 
  7.26  hearings, upon approval of the chief administrative law judge, 
  7.27  may hire consultants, including a consulting actuary and other 
  7.28  experts, deemed necessary to assist in the establishment or 
  7.29  modification of the schedule of rates.  A sum sufficient to pay 
  7.30  the costs of conducting the hearing provided under subdivision 
  7.31  2, appeals therefrom, or the establishment or modification of 
  7.32  the schedule of rates, including the costs of consultants and 
  7.33  related costs, is appropriated from the special compensation 
  7.34  fund to the commissioner of commerce and assessed against the 
  7.35  rating association and its members by the special compensation 
  7.36  fund. 
  8.1      Subd. 6.  [CONSULTANTS; LABOR AND INDUSTRY DEPARTMENT.] The 
  8.2   commissioner of the department of labor and industry may hire 
  8.3   consultants necessary to assist the commissioner in the hearing. 
  8.4   A sum sufficient to pay the costs of the commissioner of labor 
  8.5   and industry in regard to the hearing provided under subdivision 
  8.6   2 and appeals therefrom, including the costs of consultants and 
  8.7   related costs, is appropriated from the special compensation 
  8.8   fund to the commissioner of labor and industry and assessed 
  8.9   against the association and its members by the special 
  8.10  compensation fund. 
  8.11     Subd. 7.  [APPOINTMENT OF ACTUARY.] The commissioner of 
  8.12  commerce shall employ the services of a casualty actuary 
  8.13  experienced in workers' compensation whose duties shall include 
  8.14  but not be limited to investigation of complaints by insured 
  8.15  parties about rates, rate classifications, or the discriminatory 
  8.16  practices of an insurer.  The salary of the actuary employed 
  8.17  pursuant to this section is not subject to the provisions of 
  8.18  section 43A.17, subdivision 1. 
  8.19     Sec. 10.  [79.72] [PETITION FOR REHEARING.] 
  8.20     Subdivision 1.  [PETITION CONTENTS.] Any party may petition 
  8.21  the commissioner for rehearing and reconsideration of a 
  8.22  determination made under section 79.71.  The petition for 
  8.23  rehearing and reconsideration shall be served on the 
  8.24  commissioner and all parties to the rate hearing within 30 days 
  8.25  after service of the commissioner's final order.  The petition 
  8.26  shall set forth factual grounds in support of the petition.  Any 
  8.27  party adversely affected by a petition for review and 
  8.28  reconsideration has 15 days to respond to factual matters 
  8.29  alleged in the petition. 
  8.30     Subd. 2.  [GRANT OF REHEARING.] The commissioner may grant 
  8.31  a rehearing upon the filing of a petition under subdivision 1.  
  8.32  On rehearing, the commissioner may limit the scope of factual 
  8.33  matters that are subject to rehearing and reconsideration.  The 
  8.34  rehearing is subject to the provisions of this section. 
  8.35     Subd. 3.  [MODIFICATION OF ORDER.] Following rehearing, the 
  8.36  commissioner may modify the terms of the initial order adopting 
  9.1   a change in the schedule of rates upon a determination that 
  9.2   adequate factual grounds exist to support modification.  
  9.3   Adequate factual grounds include, but are not limited to, 
  9.4   erroneous testimony by any witness or party to the hearing, a 
  9.5   material change in Minnesota loss or expense data that occurs 
  9.6   after a petition for adoption of the schedule of rates has been 
  9.7   filed, or any other mistake of fact that has a substantial 
  9.8   effect upon the schedule of rates adopted in prior orders of the 
  9.9   commissioner. 
  9.10     Sec. 11.  [79.73] [JUDICIAL REVIEW.] 
  9.11     Final orders of the commissioner pursuant to sections 79.71 
  9.12  and 79.72 are subject to judicial review pursuant to sections 
  9.13  14.63 to 14.69 but shall remain in effect during the pendency of 
  9.14  any appeal. 
  9.15     Sec. 12.  [79.74] [INTERIM SCHEDULE OF RATES.] 
  9.16     (a) An association, the commissioner of labor and industry, 
  9.17  or any interested party may file a petition for an adjustment in 
  9.18  the schedule of rates when there has been a law change in the 
  9.19  benefit payable under chapter 176.  "Law change" means only 
  9.20  statutory changes or supreme court decisions.  When a petition 
  9.21  for a change in the schedule of rates due to a law change is 
  9.22  received by the commissioner, the commissioner shall review the 
  9.23  petition for up to 30 days to determine if it presents facts 
  9.24  that warrant a hearing.  If the commissioner accepts a petition 
  9.25  for hearing, it shall be conducted pursuant to the contested 
  9.26  case procedures in chapter 14.  The party petitioning the 
  9.27  commissioner must make a prima facie showing that the law change 
  9.28  has affected a substantial change in the basis upon which 
  9.29  existing rate levels or rating plans were filed. 
  9.30     (b) The chief administrative law judge shall assign an 
  9.31  administrative law judge to hear a petition for a change in the 
  9.32  schedule of rates within 30 days.  The administrative law judge 
  9.33  shall conclude the hearing within 60 days of assignment by the 
  9.34  chief administrative law judge and file findings of fact, 
  9.35  conclusions of law, and a proposed order with the commissioner 
  9.36  within 30 days of concluding the hearing.  The administrative 
 10.1   law judge shall, after the close of the record, file a report 
 10.2   with recommendations in the same manner as in section 79.71.  
 10.3   The time for holding the hearing and filing the report with the 
 10.4   commissioner may be extended by the chief administrative law 
 10.5   judge upon a showing of good cause for an additional 30 days.  
 10.6      (c) The commissioner's order may affirm, reverse, or modify 
 10.7   the findings and order of the administrative law judge.  The 
 10.8   petitioning party shall have the burden of proof in any hearing 
 10.9   held pursuant to this subdivision.  Interim rate hearings are 
 10.10  available only for changes in the schedule of workers' 
 10.11  compensation rates that result from law changes.  All 
 10.12  evidentiary, procedural, and review standards in section 79.71 
 10.13  shall apply to interim rate hearings, except the time 
 10.14  requirements in this subdivision.  
 10.15     (d) Interim rate hearings are subject to judicial review 
 10.16  pursuant to chapter 14, except that the commissioner's interim 
 10.17  rate order shall remain in effect during the pendency of any 
 10.18  appeal by any party.  The commissioner is an interested party if 
 10.19  the commissioner's decision is appealed pursuant to chapter 14.  
 10.20     (e) Interim rate hearings may only be held after an initial 
 10.21  schedule of rates has been approved by the commissioner unless 
 10.22  requested by the commissioner of labor and industry. 
 10.23     Sec. 13.  [79.75] [AUTOMATIC ADJUSTMENT OF RATES.] 
 10.24     (a) The commissioner shall adopt a rule to establish a 
 10.25  mechanism to automatically adjust a schedule of rates to reflect 
 10.26  benefit changes mandated by operation of law after the most 
 10.27  recent change in the schedule of rates, an adjustment in the 
 10.28  assessment rate for the special compensation fund, any 
 10.29  adjustment in the assessment for the assigned risk plan pursuant 
 10.30  to section 79.251, subdivision 5, any adjustment in the 
 10.31  assessment for the Minnesota insurance guaranty association 
 10.32  pursuant to section 60C.05, or any other assessment required by 
 10.33  law. 
 10.34     (b) At each rate hearing held pursuant to section 79.71 or 
 10.35  rehearing pursuant to section 79.72, following an automatic 
 10.36  adjustment, the commissioner shall review the rate adjustment to 
 11.1   assure that the schedule of rates adopted after the adjustment 
 11.2   are not excessive, inadequate, or unfairly discriminatory.  If 
 11.3   the commissioner finds that the schedule of rates adopted after 
 11.4   the adjustment are excessive, inadequate, or unfairly 
 11.5   discriminatory, the commissioner shall order appropriate 
 11.6   remedial action. 
 11.7      Sec. 14.  [79.76] [MANUALS.] 
 11.8      Subdivision 1.  [INITIAL FILING REQUIRED.] (a) On or before 
 11.9   October 1, 1995, a rate service association licensed in 
 11.10  Minnesota must file with the commissioner all underwriting and 
 11.11  rating manuals that are used in the classification of risks and 
 11.12  the calculation of rating plans, rates, and fees.  The 
 11.13  association must provide the commissioner with at least six 
 11.14  copies of each manual.  A copy of each manual filed shall also 
 11.15  be provided to the commissioner of labor and industry. 
 11.16     (b) The commissioner shall review the manuals and on or 
 11.17  before January 1, 1996, approve or disapprove all or part of the 
 11.18  manuals.  The evidentiary, procedural, and review standards of 
 11.19  section 79.71 shall apply to the review of the manuals.  Until 
 11.20  the commissioner has approved or disapproved the manuals, they 
 11.21  shall remain in force.  The association may contest the 
 11.22  disapproval of a manual or part of a manual pursuant to the 
 11.23  contested case procedures of chapter 14.  Until the conclusion 
 11.24  of the contested case proceeding, the portions of the manuals 
 11.25  that were not approved shall remain in force. 
 11.26     Subd. 2.  [NEW MANUALS AND AMENDMENTS.] If the association 
 11.27  adopts or amends a manual, the manual or the amendment to the 
 11.28  manual shall not be effective until approved by the 
 11.29  commissioner.  The association must provide the commissioner 
 11.30  with at least six copies of each manual or amendment.  A copy of 
 11.31  each manual or amendment filed shall also be provided to the 
 11.32  commissioner of labor and industry.  The commissioner shall 
 11.33  approve or disapprove any manual or amendment within 90 days of 
 11.34  filing.  The evidentiary, procedural, and review standards of 
 11.35  section 79.71 shall apply to the review of the manuals.  Any 
 11.36  manual or amendment not approved within 90 days shall be deemed 
 12.1   to be disapproved.  As to a disapproved manual or amendment, the 
 12.2   association may contest the disapproval pursuant to the 
 12.3   contested case procedures of chapter 14. 
 12.4      Subd. 3.  [BURDEN OF PROOF.] The burden of proof in a 
 12.5   proceeding under this section shall be upon the party requesting 
 12.6   the adoption of a manual or an amendment of a manual. 
 12.7      Subd. 4.  [COSTS.] The costs of the commissioner and the 
 12.8   commissioner of labor and industry in regard to a contested case 
 12.9   proceeding under this section, including the costs of 
 12.10  consultants, staff, related costs, and costs billed by the 
 12.11  attorney general's office, shall be paid from the special 
 12.12  compensation fund. 
 12.13     Subd. 5.  [PUBLIC ACCESS.] Copies of all approved manuals 
 12.14  must be made available to the public for inspection during 
 12.15  regular business hours at the office of the association.  
 12.16  Proposed manuals and amendments to manuals must be made 
 12.17  available in the same manner. 
 12.18     Sec. 15.  [79.77] [INFORMATION.] 
 12.19     (a) In addition to other information that the commissioner 
 12.20  requests pursuant to section 79.71, a rate service organization 
 12.21  shall file with the commissioner the following information on 
 12.22  its Minnesota experience:  
 12.23     (1) reserves for incurred but not reported losses of its 
 12.24  members; 
 12.25     (2) paid claims; 
 12.26     (3) reserves for open claims; 
 12.27     (4) a schedule of claims in which its members have 
 12.28  established a reserve in excess of $50,000; 
 12.29     (5) the income on invested reserves of its members; 
 12.30     (6) an itemized list of policies written at other than the 
 12.31  filed rates; 
 12.32     (7) loss adjustment expenses; 
 12.33     (8) subrogation recoveries; 
 12.34     (9) administrative expenses; 
 12.35     (10) commission and lobbying expenses; 
 12.36     (11) the effective rate actually charged for each 
 13.1   classification; and 
 13.2      (12) the actual total premium charged for each rating 
 13.3   classification and the total premium that would have been 
 13.4   charged for that classification if the filed rate had been 
 13.5   charged without the use of discounts, credits, or similar 
 13.6   adjustments. 
 13.7      The filing of the information of Minnesota experience must 
 13.8   be based on separate records containing only Minnesota 
 13.9   information separately maintained by the association.  The 
 13.10  commissioner may request, and the association must provide, the 
 13.11  separate records to the commissioner. 
 13.12     (b) The commissioner may also request the range of premiums 
 13.13  actually charged for each classification and an evaluation of 
 13.14  premiums charged within each range compared to the size of the 
 13.15  payroll of the business. 
 13.16     (c) Losses and reserves shall be reported separately as to 
 13.17  medical and indemnity expenses.  The rating association shall 
 13.18  file an itemized breakdown of its lobbying expenses. 
 13.19     (d) The commissioner shall consider this information in an 
 13.20  appropriate manner in adopting a schedule of rates and shall 
 13.21  decline to grant a hearing pursuant to section 79.71 for 
 13.22  purposes of considering a rate increase if the association fails 
 13.23  to provide the information. 
 13.24     (e) The rating association shall be domiciled, chartered, 
 13.25  and principally located in the state of Minnesota.  Except with 
 13.26  the approval of the commissioner, the rating association may not 
 13.27  contract for its data collection responsibilities with data 
 13.28  service organizations domiciled, chartered, or principally 
 13.29  located outside the state of Minnesota. 
 13.30     Sec. 16.  [79.78] [DEPARTMENT AS RATE SERVICE 
 13.31  ORGANIZATION.] 
 13.32     The department of commerce shall assume the functions of 
 13.33  all rate service organizations authorized by sections 79.61 and 
 13.34  79.62.  Copies of all records and data maintained by rate 
 13.35  service organizations must be provided to the department upon 
 13.36  request. 
 14.1      An insurer, as a condition of doing business in this state, 
 14.2   shall provide to the department all information on claims 
 14.3   experience, administrative costs, investment income, loss 
 14.4   reserves, adjustment expenses, and other pertinent information 
 14.5   the department requests.  The information must be provided in a 
 14.6   form the department prescribes, at the time the insurer files 
 14.7   its annual statement.  The costs of this activity by the 
 14.8   department shall be paid on an equitable and nondiscriminatory 
 14.9   basis by the insurers as determined by the commissioner.  
 14.10     An insurer that fails to comply with this section is 
 14.11  subject to a civil penalty, not to exceed $10,000, and is 
 14.12  subject to other penalties, including revocation of its 
 14.13  authority to do business in the state.  These penalties are in 
 14.14  addition to other penalties authorized by law.  This section 
 14.15  does not preclude the continued activities of any rate service 
 14.16  organization.  Rate service organizations or other persons may 
 14.17  contract with the department to obtain the information collected 
 14.18  by the department. 
 14.19     Sec. 17.  [79.79] [RECORD; DATA SERVICE ORGANIZATION SHALL 
 14.20  FURNISH INFORMATION.] 
 14.21     A data service organization shall keep a record of its 
 14.22  proceedings.  It shall furnish, upon demand, to any employer 
 14.23  whose workers' compensation risk has been surveyed, full 
 14.24  information about the survey, including the method of the 
 14.25  computation and a detailed description and location of all items 
 14.26  producing charges or credits.  The organization shall provide a 
 14.27  means, approved by the commissioner, for hearing any member or 
 14.28  employer whose risk has been inspected, either in person or by a 
 14.29  representative, before the governing or rating committee or 
 14.30  other proper representatives with reference to any matter 
 14.31  affecting the risk.  Any insurer or employer may appeal from a 
 14.32  decision of the organization to the commissioner.  The 
 14.33  organization shall make rules governing appeals to be filed with 
 14.34  and approved by the commissioner.  The commissioner may require 
 14.35  the organization to file any information connected with its 
 14.36  activities. 
 15.1      Sec. 18.  [79.80] [RATES FILED.] 
 15.2      Every insurer writing workers' compensation insurance in 
 15.3   this state, except as ordered by the commissioner, must file 
 15.4   with the commissioner its rates for compensation insurance and 
 15.5   all additions or changes.  All rates so filed must comply with 
 15.6   the requirements of law and are not effective until approved by 
 15.7   the commissioner.  
 15.8      Sec. 19.  [79.81] [RATES UNIFORM; EXCEPTIONS.] 
 15.9      No insurer may write insurance at a rate except that 
 15.10  approved by the commissioner.  An insurer may provide for the 
 15.11  reduction or increase of its rates by the application to 
 15.12  individual risks of the system of merit or experience rating 
 15.13  which has been approved by the commissioner.  The system must be 
 15.14  available to all insureds and applicants and shall be applied 
 15.15  uniformly and in a nondiscriminatory manner.  This reduction or 
 15.16  increase shall be set forth in the policy or by endorsement.  
 15.17  Upon written request, an insurer shall furnish a written 
 15.18  explanation to the insured or applicant of how and why the 
 15.19  individual rate was adjusted by application of a system of merit 
 15.20  or experience rating.  This explanation shall be mailed to the 
 15.21  insured or applicant within 30 days of the request. 
 15.22     Sec. 20.  [79.82] [DUTIES OF COMMISSIONER.] 
 15.23     The commissioner of commerce shall require compensation 
 15.24  insurers, or their agents, to file the necessary reports for the 
 15.25  purposes of this chapter for use by the commissioner including, 
 15.26  but not limited to, a report as a supplement to the annual 
 15.27  report required by licensed property casualty insurers under 
 15.28  section 60A.13 that satisfies this section.  
 15.29     The supplemental reports must include the following data 
 15.30  for the previous year ending on the 31st day of December: 
 15.31     (1) direct premiums written; 
 15.32     (2) direct premiums earned; 
 15.33     (3) net investment income, including net realized capital 
 15.34  gains and losses, using appropriate estimates where necessary; 
 15.35     (4) incurred claims, listed individually, together with the 
 15.36  date each claim was incurred, and with figures provided for, of 
 16.1   the following:  
 16.2      (i) dollar amount of claims closed with payment, plus 
 16.3      (ii) reserves for reported claims at the end of the current 
 16.4   year, minus 
 16.5      (iii) reserves for reported claims at the end of the 
 16.6   previous year, plus 
 16.7      (iv) reserves for incurred but not reported claims at the 
 16.8   end of the current year, minus 
 16.9      (v) reserves for incurred but not reported claims at the 
 16.10  end of the previous year, plus 
 16.11     (vi) reserves for loss adjustment expense at the end of the 
 16.12  current year, minus 
 16.13     (vii) reserves for loss adjustment expense at the end of 
 16.14  the previous year; 
 16.15     (5) actual incurred expenses allocated separately to loss 
 16.16  adjustment, commissions, other acquisition costs, general office 
 16.17  expenses, taxes, licenses and fees, and all other expenses; 
 16.18     (6) net underwriting gain or loss; and 
 16.19     (7) net operation gain or loss, including net investment 
 16.20  income.  
 16.21     This report is due by the first of May of each year.  The 
 16.22  commissioner shall annually audit, compile, and review all 
 16.23  reports submitted by insurers pursuant to this section.  The 
 16.24  audit must verify that each item required by this section on 
 16.25  each line of business covered is accurate and complete.  The 
 16.26  department of commerce shall perform the audit on a domestic 
 16.27  insurer, and may either personally audit a foreign insurer, or 
 16.28  contract with the domiciliary state of the foreign insurer, to 
 16.29  have them perform the audit.  In either case, each insurer 
 16.30  audited shall pay the audit fees and expenses of the department, 
 16.31  including per diem salary fees of persons who participated in or 
 16.32  conducted the audit.  These fees and expenses must be paid into 
 16.33  the department of commerce revolving fund.  These filings must 
 16.34  be published and made available to any interested insured or 
 16.35  citizen. 
 16.36     A rate, or a change or an amendment of a rate, that will 
 17.1   result in an increase of an existing rate, filed by an insurer 
 17.2   subject to this section is not effective unless the insurer has 
 17.3   complied with all of the requirements of this section.  
 17.4      The initial report required by this section is due May 1, 
 17.5   1996. 
 17.6      Sec. 21.  [79.821] [RATE ASSUMPTION REVIEW.] 
 17.7      The commissioner shall annually review the rate filings of 
 17.8   insurers or rating associations.  The review shall consist of 
 17.9   comparing the actual experience of policies that were covered by 
 17.10  the rate filing with the projections and assumptions contained 
 17.11  in the rate filing which the insurer or rating association 
 17.12  offered to support the rate filing.  The commissioner shall 
 17.13  review all rate filings of the insurer or rating association for 
 17.14  a minimum of ten years from the effective date of the rate 
 17.15  filing or such greater period of time as the commissioner deems 
 17.16  appropriate.  The insurer or rating association shall provide 
 17.17  all information requested by the commissioner for this review 
 17.18  and the information shall be in the form determined to be 
 17.19  appropriate by the commissioner.  The commissioner may also 
 17.20  require the insurer or rating association to maintain certain 
 17.21  information or to collect or organize information in a certain 
 17.22  way so as to assist in the review required by this section.  The 
 17.23  accuracy of the insurer's or rating association's assumptions in 
 17.24  prior rate filings shall be part of the record in any rate 
 17.25  filing and may be used to determine the weight assigned to the 
 17.26  insurer's or rating association's current assumptions in regard 
 17.27  to its current rate filing.  The commissioner's review is public 
 17.28  information. 
 17.29     Sec. 22.  [79.822] [PUBLIC INFORMATION.] 
 17.30     All reports and other information furnished to the 
 17.31  commissioner of commerce under this chapter by insurers is 
 17.32  public data. 
 17.33     Sec. 23.  [79.823] [BURDEN OF PROOF.] 
 17.34     The burden of proof on all issues in a hearing or other 
 17.35  proceeding related to rates is on the insurer or association. 
 17.36     Sec. 24.  [79.83] [VIOLATIONS; PENALTIES.] 
 18.1      Any insurer, data service organization, agent, or other 
 18.2   representative or employee of any insurer or data service 
 18.3   organization that fails to comply with or violates any of the 
 18.4   provisions of this chapter, or any order or ruling of the 
 18.5   commissioner, shall be punished by a fine of not less than $100 
 18.6   nor more than $25,000.  In addition, the license of any insurer, 
 18.7   agent, or broker guilty of the violation may be revoked or 
 18.8   suspended by the commissioner. 
 18.9      Sec. 25.  [79.84] [RULEMAKING.] 
 18.10     The commissioner may adopt rules to carry out the 
 18.11  commissioner's duties assigned by this chapter. 
 18.12     Sec. 26.  [79.85] [LIABILITY UNDER OTHER LAW.] 
 18.13     The regulatory scheme established by this chapter does not 
 18.14  relieve any person from liability under sections 325D.49 to 
 18.15  325D.66, or United States Code, title 15, sections 1 to 38. 
 18.16     Sec. 27.  [TRANSITION PROVISIONS; EMPLOYEES.] 
 18.17     Until January 1, 1999, initial appointment to the 
 18.18  professional positions authorized by Minnesota Statutes, section 
 18.19  79.71, shall be deemed to be provisional or exceptional 
 18.20  appointments as defined by Minnesota Statutes, section 43A.15, 
 18.21  subdivisions 4 and 8, and the commissioner of employee relations 
 18.22  must authorize those appointments as requested by the 
 18.23  commissioner of commerce or labor and industry.  Upon request of 
 18.24  the commissioner of commerce or labor and industry, the 
 18.25  appointments under this section shall be considered an unusual 
 18.26  employment condition as defined by Minnesota Statutes, section 
 18.27  43A.17, subdivision 3, and salaries may be set accordingly. 
 18.28     Sec. 28.  [LEGISLATIVE INTENT.] 
 18.29     It is the intent of the legislature in enacting this 
 18.30  article to reinstate the prior state workers' compensation 
 18.31  insurance rate regulatory system that was repealed effective 
 18.32  January 1, 1984.  Judicial and administrative decisions 
 18.33  regarding the prior law shall be deemed to be applicable to this 
 18.34  article in the same manner as to the prior law. 
 18.35     Sec. 29.  [RATE, CLASSIFICATION, AND CREDIT FREEZE.] 
 18.36     Until January 1, 1996, no insurer, data service 
 19.1   organization, association, or the assigned risk plan may 
 19.2   increase the workers' compensation rates of an employer, 
 19.3   reclassify the operation of an employer, or reduce a premium 
 19.4   credit previously offered an employer.  This section does not 
 19.5   prohibit adjustment of an employer's experience rating in 
 19.6   accordance with the rating plan of an insurer, data service 
 19.7   organization, association, or the assigned risk plan filed with 
 19.8   the commissioner of commerce on or before December 31, 1994. 
 19.9      Sec. 30.  [PREMIUM REDUCTION; REINSURANCE REFUND.] 
 19.10     Any amount received by an insurer or the assigned risk plan 
 19.11  from the reinsurance association as surplus must be applied to 
 19.12  proportionately reduce the premiums of the insured employers of 
 19.13  the insurer or the assigned risk plan. 
 19.14     Sec. 31.  [APPROPRIATION.] 
 19.15     $1,300,000 is appropriated from the special compensation 
 19.16  fund to the department of commerce for the purpose of this 
 19.17  article.  The appropriation is available immediately and is 
 19.18  available until expended.  The complement of the department of 
 19.19  commerce is increased by a maximum of ten positions. 
 19.20     Sec. 32.  [REPEALER.] 
 19.21     Minnesota Statutes 1994, sections 79.51; 79.52; 79.53; 
 19.22  79.54; 79.55; 79.56; 79.57; 79.58; 79.59, subdivisions 1, 2, 3, 
 19.23  and 5; 79.60; 79.61; and 79.62, are repealed. 
 19.24     Sec. 33.  [EFFECTIVE DATE.] 
 19.25     Sections 1 to 32 are effective the day following final 
 19.26  enactment. 
 19.27                             ARTICLE 2 
 19.28                           SELF-INSURANCE 
 19.29     Section 1.  [79A.165] [MUTUAL SELF-INSURERS' INDEMNITY 
 19.30  ASSOCIATION.] 
 19.31     Subdivision 1.  [ADVISORY COMMITTEE.] For the purposes of 
 19.32  assisting the commissioner, there is established a mutual 
 19.33  self-insurers' advisory committee of five members and two 
 19.34  alternate members that are employers who are members of a mutual 
 19.35  self-insurance pool.  Three of the members and one alternate 
 19.36  member shall be elected by the members of the mutual group 
 20.1   self-insurers' indemnity association and two members and one 
 20.2   alternate member shall be appointed by the commissioner. 
 20.3      Subd. 2.  [CREATION.] The mutual self-insurers' indemnity 
 20.4   association is established as a nonprofit corporation under 
 20.5   chapter 317A.  If any provision of this chapter conflicts with 
 20.6   chapter 317A, this chapter applies.  Each group insurer and each 
 20.7   mutual self-insurance pool that is established after August 1, 
 20.8   1995, shall participate as a member of this association.  This 
 20.9   participation is a condition of maintaining its certificate to 
 20.10  self-insure.  
 20.11     Subd. 3.  [BOARD OF DIRECTORS.] The association shall be 
 20.12  governed by a nine-member board of directors.  Six of the 
 20.13  directors shall be representatives of mutual self-insurer pools 
 20.14  who shall be elected by the members of the association, each 
 20.15  pool having one vote.  Three of the directors shall serve 
 20.16  two-year terms and three shall serve four-year terms.  
 20.17  Thereafter, directors shall be elected to four-year terms and 
 20.18  shall serve until their successors are elected and assume office 
 20.19  pursuant to the bylaws of the association.  Three additional 
 20.20  directors shall be appointed by the commissioner.  Two of these 
 20.21  directors shall serve four-year terms.  One of these directors 
 20.22  shall serve a two-year term.  Thereafter, the directors shall be 
 20.23  appointed to four-year terms and shall serve until their 
 20.24  successors are appointed and assume office pursuant to the 
 20.25  bylaws of the association.  In addition to the nine directors 
 20.26  elected by the members or appointed by the commissioner, the 
 20.27  commissioner of labor and industry or the commissioner's 
 20.28  designee shall be an ex officio, nonvoting member of the board 
 20.29  of directors.  A member of the board of directors may designate 
 20.30  another person to act in the member's place as though the member 
 20.31  were acting and the designee's actions shall be deemed those of 
 20.32  the member. 
 20.33     Subd. 4.  [BYLAWS.] The association shall establish bylaws 
 20.34  and a plan of operation, subject to the prior approval of the 
 20.35  commissioner, necessary to the purposes of this chapter and to 
 20.36  carry out the responsibilities of the security fund.  The 
 21.1   security fund may carry out its responsibilities directly or by 
 21.2   contract, and may purchase services and insurance and borrow 
 21.3   funds as it deems necessary for the protection of the members 
 21.4   and their employees. 
 21.5      Subd. 5.  [CONFIDENTIAL INFORMATION.] The association may 
 21.6   receive private data concerning the financial condition of 
 21.7   private self-insurers whose liabilities to pay compensation have 
 21.8   become its responsibility and shall adopt bylaws to prevent 
 21.9   dissemination of that information.  
 21.10     Subd. 6.  [EMPLOYEES.] Association employees are not state 
 21.11  employees and are not subject to any state civil service 
 21.12  regulations.  
 21.13     Subd. 7.  [MUTUAL SELF-INSURANCE POOL REQUIREMENTS.] A 
 21.14  mutual self-insurance pool is subject to all the requirements of 
 21.15  a group self-insurer, except that a mutual self-insurance pool:  
 21.16     (1) shall consist of two or more employers in the same 
 21.17  industry, or located in the same geographical area or having any 
 21.18  other reasonable basis as determined by the commissioner of 
 21.19  commerce for affiliating to self-insure; 
 21.20     (2) shall, as a minimum, demonstrate the initial financial 
 21.21  condition of its members by means of compilation level financial 
 21.22  standards and by the sworn affidavit of its officers as to 
 21.23  litigation or potential litigation; 
 21.24     (3) may select a retention level with the workers' 
 21.25  compensation reinsurance association of $100,000; and 
 21.26     (4) may use clean letters of credit, or alternative 
 21.27  collateral approved by the commissioner to allow pools and pool 
 21.28  members to satisfy financial requirements.  Alternative 
 21.29  collateral may include, but is not limited to, personal 
 21.30  guarantees of individual owners or shareholders of members or 
 21.31  reinsurance.  
 21.32     The minimum net worth for each pool electing the $100,000 
 21.33  retention level under clause (3) shall be $1,500,000.  
 21.34     A mutual self-insurance pool must provide in its bylaws or 
 21.35  plan of operation for the active involvement and oversight by 
 21.36  the board of directors or committees composed of members 
 22.1   appointed by the board of directors, in the operation, risk 
 22.2   management, member selection, and financial condition of the 
 22.3   pool.  
 22.4      The commissioner shall also provide that in at least the 
 22.5   first three years of the pool's operation, the oversight and 
 22.6   review of the department of commerce must be increased. 
 22.7      Subd. 8.  [APPLICATION OF LAW.] Except as specifically 
 22.8   provided in sections 1 to 6, the provisions of this chapter and 
 22.9   the rules adopted under it that apply to the security fund 
 22.10  created in section 79A.09 apply to the mutual self-insurers' 
 22.11  indemnity association and shall be construed in a manner 
 22.12  consistent with this subdivision.  
 22.13     The security fund under section 79A.09, and any member of 
 22.14  the security fund, has no liability for the obligations of the 
 22.15  indemnity association under this section.  The indemnity 
 22.16  association under this section and any member of the indemnity 
 22.17  association has no liability for the obligations of the security 
 22.18  fund under section 79A.09.  A group insurer established after 
 22.19  July 1, 1995, and a group insurer that elects to become a member 
 22.20  of the indemnity association under section 5 is a member of the 
 22.21  indemnity association for purposes of liability. 
 22.22     Sec. 2.  [79A.166] [RETENTION LIMIT; ADJUSTMENT.] 
 22.23     The reinsurance association may increase the $100,000 
 22.24  retention level specified in sections 1 and 5 to the nearest 
 22.25  $5,000 on January 1, 1999, and January 1 of each year 
 22.26  thereafter, by the percentage increase in the statewide average 
 22.27  weekly wage in the previous year as determined in accordance 
 22.28  with section 176.011, subdivision 20. 
 22.29     Sec. 3.  [COMMISSIONER OF COMMERCE; REVIEW OF GROUP 
 22.30  INSURANCE POOLS.] 
 22.31     The commissioner shall review all other requirements for 
 22.32  group insurance and determine which constitute barriers to 
 22.33  formation of pools.  The commissioner shall consider which of 
 22.34  these requirements may be waived or reduced and replaced by 
 22.35  simple alternative tests that protect members, including, but 
 22.36  not limited to, increased audits and review by the department of 
 23.1   commerce.  By February 1, 1997, the commissioner shall propose 
 23.2   legislative amendments and rule amendments necessary to effect 
 23.3   these changes and to separate mutual self-insurance pool 
 23.4   requirements and provisions into a separate chapter of Minnesota 
 23.5   Statutes.  The commissioner shall study the advisability of the 
 23.6   indexing of the $100,000 retention level under section 79A.166 
 23.7   and shall make any recommendations to the legislature by 
 23.8   February 1, 1997.  
 23.9      The commissioner shall have the authority until July 1, 
 23.10  1997, to waive any financial or other requirement for the 
 23.11  formation of mutual self-insurance pools which the commissioner 
 23.12  considers to be a hindrance to their formation and for which 
 23.13  adequate alternative safeguards are available.  The commissioner 
 23.14  may impose other alternative requirements the commissioner 
 23.15  considers appropriate.  The commissioner may not reduce any of 
 23.16  the standards set forth in section 79A.165, subdivision 7.  
 23.17     Sec. 4.  [INFORMATIONAL MEETINGS.] 
 23.18     The commissioners of commerce and trade and economic 
 23.19  development shall, between June 1, 1995, and November 1, 1995, 
 23.20  hold at least eight informational meetings throughout the state 
 23.21  of Minnesota to inform employers of the availability of mutual 
 23.22  self-insurance pools and to assist them in forming pools.  Both 
 23.23  agencies shall continue to provide this assistance after these 
 23.24  initial meetings in the normal course of their operations.  
 23.25     The workers' compensation insurers rating association of 
 23.26  Minnesota, department of labor and industry, workers' 
 23.27  compensation reinsurance association, and assigned risk plan 
 23.28  shall assist the departments by providing them with the names 
 23.29  and addresses of all employers known to them upon request of 
 23.30  their commissioners.  The commissioners shall mail notice of the 
 23.31  meetings to all employers so identified.  
 23.32     Sec. 5.  [MUTUAL SELF-INSURERS' INDEMNITY ASSOCIATION 
 23.33  MEMBERSHIP; WITHDRAWAL FROM SELF-INSURERS' SECURITY FUND.] 
 23.34     Any group self-insurer that is a member of the 
 23.35  self-insurers' security fund on January 1, 1997, may until 
 23.36  January 1, 1998, elect to withdraw from that fund and become a 
 24.1   member of the mutual self-insurers' indemnity association.  Any 
 24.2   such existing group self-insurers electing to withdraw from the 
 24.3   self-insurers' security fund to become a member of the mutual 
 24.4   self-insurers' indemnity association shall notify the 
 24.5   commissioner of commerce and the self-insurers' security fund of 
 24.6   that election by certified mail.  This does not relieve them of 
 24.7   any obligation to that fund that they would be responsible for 
 24.8   during the period of their membership in the self-insurers' 
 24.9   security fund.  Group self-insurers electing to transfer to the 
 24.10  mutual self-insurers' indemnity association are not subject to 
 24.11  Minnesota Statutes, section 79A.06, subdivision 5.  
 24.12     The commissioner of commerce shall amend the exemption 
 24.13  order to authorize the transfer of the group self-insurer to the 
 24.14  mutual self-insurance indemnity association and immediately 
 24.15  notify the self-insurers' security fund.  If an actuarial 
 24.16  certificate has not been prepared within 12 months of the date 
 24.17  of transfer, the commissioner shall direct an immediate 
 24.18  actuarial certification of all current and future liabilities to 
 24.19  establish a new security deposit amount for the member joining 
 24.20  the mutual self-insurers' indemnity association. 
 24.21     All group self-insurers established after January 1, 1996, 
 24.22  shall be members of the mutual self-insurers' indemnity 
 24.23  association.  Notwithstanding Minnesota Statutes, section 79.34, 
 24.24  subdivision 2, the workers' compensation reinsurance association 
 24.25  shall by July 1, 1995, establish a retention limit for mutual 
 24.26  self-insurance pools of $100,000 which shall not be increased by 
 24.27  annual adjustments except as required in Minnesota Statutes, 
 24.28  section 79A.166.  This does not preclude the use of higher 
 24.29  retention limits available under Minnesota Statutes, section 
 24.30  79.34, subdivision 2, if the members of a self-insurance pool 
 24.31  agree to those higher limits and the limits are approved by the 
 24.32  commissioner of commerce. 
 24.33     Sec. 6.  [INITIAL ADVISORY COMMITTEE AND BOARD 
 24.34  APPOINTMENTS.] 
 24.35     Until July 1, 1997, all the members of the mutual group 
 24.36  self-insurers' advisory committee and the board of directors of 
 25.1   the mutual self-insurers' indemnity association shall be 
 25.2   appointed by the commissioner.  The commissioner's appointees 
 25.3   shall, if possible, be employers who are members of a mutual 
 25.4   self-insurance pool or who plan to participate in such a pool.  
 25.5   Current individual self-insurers or members of existing group 
 25.6   self-insurers or representatives of either are not eligible to 
 25.7   be appointed to the advisory committee or the board of directors.
 25.8      Sec. 7.  [APPROPRIATION.] 
 25.9      $....... is appropriated from the special compensation fund 
 25.10  to the commissioner of commerce for the purposes of implementing 
 25.11  this article.  The appropriation is available for fiscal year 
 25.12  1996. 
 25.13     Sec. 8.  [EFFECTIVE DATE.] 
 25.14     Sections 1 to 6 are effective the day following final 
 25.15  enactment. 
 25.16                             ARTICLE 3 
 25.17                      BENEFITS, MISCELLANEOUS 
 25.18     Section 1.  Minnesota Statutes 1994, section 176.021, 
 25.19  subdivision 3a, is amended to read: 
 25.20     Subd. 3a.  [PERMANENT PARTIAL BENEFITS, PAYMENT.] Payments 
 25.21  for permanent partial disability as provided in section 176.101, 
 25.22  subdivision 3 subdivisions 3a and 3b, shall be made in the 
 25.23  following manner:  
 25.24     (a) If the employee returns to work, payment shall be made 
 25.25  by lump sum; 
 25.26     (b) If temporary total payments have ceased, but the 
 25.27  employee has not returned to work, payment shall be made at the 
 25.28  same intervals as temporary total payments were made;. 
 25.29     (c) If temporary total disability payments cease because 
 25.30  the employee is receiving payments for permanent total 
 25.31  disability or because the employee is retiring or has retired 
 25.32  from the work force, then payment shall be made by lump sum; 
 25.33     (d) If the employee completes a rehabilitation plan 
 25.34  pursuant to section 176.102, but the employer does not furnish 
 25.35  the employee with work the employee can do in a permanently 
 25.36  partially disabled condition, and the employee is unable to 
 26.1   procure such work with another employer, then payment shall be 
 26.2   made by lump sum. 
 26.3      Sec. 2.  Minnesota Statutes 1994, section 176.132, 
 26.4   subdivision 3, is amended to read: 
 26.5      Subd. 3.  [PAYMENT.] The payment of supplementary benefits 
 26.6   shall be the responsibility of the employer or insurer currently 
 26.7   paying total disability benefits, or any other payer of such 
 26.8   benefits.  When the eligible individual is not currently 
 26.9   receiving benefits because the total paid has reached the 
 26.10  maximum prescribed by law the employer and insurer shall, 
 26.11  nevertheless, pay the supplementary benefits that are prescribed 
 26.12  by law.  The employer or insurer paying the supplementary 
 26.13  benefit shall have the right of full reimbursement from the 
 26.14  special compensation fund for the amount of such benefits 
 26.15  paid for injuries occurring prior to October 1, 1995. 
 26.16     Sec. 3.  [176.1812] [COLLECTIVE BARGAINING AGREEMENTS.] 
 26.17     Subdivision 1.  [REQUIREMENTS.] Upon appropriate filing, 
 26.18  the commissioner, compensation judge, workers' compensation 
 26.19  court of appeals, and courts shall recognize as valid and 
 26.20  binding a provision in a collective bargaining agreement between 
 26.21  an employer and the recognized or certified and exclusive 
 26.22  representative of its employees to establish certain obligations 
 26.23  and procedures relating to workers' compensation.  This 
 26.24  agreement must be limited to, but need not include, all of the 
 26.25  following: 
 26.26     (a) an alternative dispute resolution system to supplement, 
 26.27  modify, or replace the provisions of this chapter.  The system 
 26.28  may include mediation, arbitration, or other dispute resolution 
 26.29  proceedings, the results of which may be binding upon the 
 26.30  parties.  A system of arbitration may provide that the decision 
 26.31  of the arbiter is subject to review either by the workers' 
 26.32  compensation court of appeals in the same manner as an award or 
 26.33  order of a compensation judge or, in lieu of review by the 
 26.34  workers' compensation court of appeals, by the district court, 
 26.35  by the Minnesota court of appeals, or by the supreme court in 
 26.36  the same manner as the workers' compensation court of appeals; 
 27.1      (b) an agreed list of providers of medical treatment that 
 27.2   may be the exclusive source of all medical and related treatment 
 27.3   provided under this chapter, if an employer has not opted to 
 27.4   participate in a managed care plan as provided in section 
 27.5   176.1351; 
 27.6      (c) the use of a limited list of impartial physicians to 
 27.7   conduct independent medical examinations; 
 27.8      (d) the creation of a light-duty, modified-job, or 
 27.9   return-to-work program; 
 27.10     (e) the establishment of vocational rehabilitation or 
 27.11  retraining programs; 
 27.12     (f) the establishment of safety committees and safety 
 27.13  procedures; and 
 27.14     (g) the adoption of a 24-hour health care coverage plan. 
 27.15     Subd. 2.  [FILING AND REVIEW.] A copy of the agreement and 
 27.16  the approximate number of employees who will be covered under it 
 27.17  must be filed with the commissioner.  Within 21 days of receipt 
 27.18  of an agreement, the commissioner shall review the agreement for 
 27.19  compliance with this chapter and notify the parties of any 
 27.20  additional information required or any modification that must be 
 27.21  made to bring the agreement into compliance.  Upon receipt of 
 27.22  any requested information or modification, the commissioner must 
 27.23  notify the parties within 21 days that the agreement has or has 
 27.24  not been approved.  The agreement must be approved if the 
 27.25  commissioner finds that the agreement: 
 27.26     (1) proposes to provide quality services required by this 
 27.27  chapter in a manner that is timely, effective, and convenient 
 27.28  for the worker; 
 27.29     (2) provides these services in an area geographically 
 27.30  convenient to the employees it serves; 
 27.31     (3) provides appropriate incentives to reduce service costs 
 27.32  and utilization without sacrificing the quality of service; 
 27.33     (4) as appropriate, provides aggressive case management for 
 27.34  injured workers and implements a program to encourage an early 
 27.35  return to work and cooperative efforts by the workers and the 
 27.36  employer to promote workplace health and safety consultative and 
 28.1   other services; and 
 28.2      (5) provides a timely and accurate method of reporting to 
 28.3   the commissioner necessary information regarding service cost 
 28.4   and utilization to enable the commissioner to annually report to 
 28.5   the legislature.  The information provided to the commissioner 
 28.6   must include aggregate data on the: 
 28.7      (i) person hours covered by agreements filed; 
 28.8      (ii) number of claims filed; 
 28.9      (iii) average cost per claim; 
 28.10     (iv) number of litigated claims, including the number of 
 28.11  claims submitted to arbitration, the workers' compensation court 
 28.12  of appeals, the district court, the Minnesota court of appeals, 
 28.13  or the supreme court; 
 28.14     (v) number of contested claims resolved prior to 
 28.15  arbitration; 
 28.16     (vi) projected incurred costs and actual costs of claims; 
 28.17     (vii) employer's safety history; 
 28.18     (viii) number of workers participating in vocational 
 28.19  rehabilitation; and 
 28.20     (ix) number of workers participating in light-duty programs.
 28.21     Subd. 3.  [REFUSAL TO APPROVE.] A person aggrieved by the 
 28.22  commissioner's decision concerning an agreement may request in 
 28.23  writing, within 30 days of the date the notice is issued, the 
 28.24  initiation of a contested case proceeding under chapter 14.  The 
 28.25  request to initiate a contested case must be received by the 
 28.26  department by the 30th day after the commissioner's decision.  
 28.27  An appeal from the commissioner's final decision and order may 
 28.28  be taken to the workers' compensation court of appeals pursuant 
 28.29  to sections 176.421 and 176.442. 
 28.30     Subd. 4.  [VOID AGREEMENTS.] Nothing in this section shall 
 28.31  allow any agreement that diminishes an employee's entitlement to 
 28.32  benefits as otherwise set forth in this chapter.  Any agreement 
 28.33  in violation of this chapter is null and void. 
 28.34     Subd. 5.  [APPROVAL OF INSURANCE CARRIER.] If the employer 
 28.35  is insured under this chapter, the provision shall not be 
 28.36  recognized by the commissioner, compensation judge, workers' 
 29.1   compensation court of appeals, and other courts unless agreed to 
 29.2   by the employer's insurance carrier, which may withhold its 
 29.3   approval. 
 29.4      Subd. 6.  [RULES.] The commissioner may adopt emergency or 
 29.5   permanent rules necessary to implement this section. 
 29.6      Sec. 4.  Minnesota Statutes 1994, section 176.82, is 
 29.7   amended to read: 
 29.8      176.82 [ACTION FOR CIVIL DAMAGES FOR OBSTRUCTING EMPLOYEE 
 29.9   SEEKING BENEFITS.] 
 29.10     Subdivision 1.  [RETALIATORY DISCHARGE.] Any person 
 29.11  discharging or threatening to discharge an employee for seeking 
 29.12  workers' compensation benefits or in any manner intentionally 
 29.13  obstructing an employee seeking workers' compensation benefits 
 29.14  is liable in a civil action for damages incurred by the employee 
 29.15  including any diminution in workers' compensation benefits 
 29.16  caused by a violation of this section including costs and 
 29.17  reasonable attorney fees, and for punitive damages not to exceed 
 29.18  three times the amount of any compensation benefit to which the 
 29.19  employee is entitled.  Damages awarded under this section shall 
 29.20  not be offset by any workers' compensation benefits to which the 
 29.21  employee is entitled. 
 29.22     Subd. 2.  [REFUSAL TO OFFER CONTINUED EMPLOYMENT.] An 
 29.23  employer who, without reasonable cause, refuses to offer 
 29.24  continued employment to its employee when employment is 
 29.25  available within the employee's physical limitations shall be 
 29.26  liable for one year's wages.  The wages are payable from the 
 29.27  date of the refusal to offer continued employment, and at the 
 29.28  same time and at the same rate as the employee's preinjury wage, 
 29.29  to continue during the period of the refusal.  These payments 
 29.30  shall be in addition to any other payments provided by this 
 29.31  chapter. 
 29.32     Sec. 5.  Minnesota Statutes 1994, section 182.659, is 
 29.33  amended by adding a subdivision to read: 
 29.34     Subd. 4a.  [INSPECTION PRIORITIES.] The commissioner shall 
 29.35  give priority for inspections to workplaces that have a poor 
 29.36  safety record or that are new businesses. 
 30.1      Sec. 6.  Minnesota Statutes 1994, section 363.02, 
 30.2   subdivision 5, is amended to read: 
 30.3      Subd. 5.  [DISABILITY.] Nothing in this chapter shall be 
 30.4   construed to prohibit any program, service, facility, or 
 30.5   privilege afforded to a person with a disability which is 
 30.6   intended to habilitate, rehabilitate, or accommodate that 
 30.7   person.  It is a defense to a complaint or action brought under 
 30.8   the employment provisions of this chapter that the person 
 30.9   bringing the complaint or action has a disability which in the 
 30.10  circumstances and even with reasonable accommodation, as defined 
 30.11  in section 363.03, subdivision 1, clause (6), poses a serious 
 30.12  threat to the health or safety of the disabled person or 
 30.13  others.  The burden of proving this defense is upon the 
 30.14  respondent. 
 30.15     It is not a defense to a complaint or action brought under 
 30.16  the employment provisions of this chapter that the person 
 30.17  bringing the complaint or action is pursuing or has pursued a 
 30.18  claim for compensation under other statutory or common law 
 30.19  protections. 
 30.20     Sec. 7.  [APPROPRIATION.] 
 30.21     $....... is appropriated from the special compensation fund 
 30.22  to the commission of labor and industry for the biennium ending 
 30.23  June 30, 1997, for the purpose of occupational safety and health 
 30.24  act compliance efforts.