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Minnesota Legislature

Office of the Revisor of Statutes

Key: (1) language to be deleted (2) new language

  

                         Laws of Minnesota 1987 

                         CHAPTER 72-H.F.No. 26 
           An act relating to workers' compensation; providing 
          for the organization and powers of the state 
          compensation insurance fund; amending Minnesota 
          Statutes 1986, sections 11A.24, subdivision 4; 
          176A.02, subdivisions 1 and 2; and 176A.04. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1986, section 11A.24, 
subdivision 4, is amended to read:  
    Subd. 4.  [OTHER OBLIGATIONS.] The state board may invest 
funds in bankers acceptances, certificates of deposit, 
commercial paper, mortgage participation certificates and pools, 
repurchase agreements and reverse repurchase agreements, 
guaranteed investment contracts, and savings accounts, and 
guaranty fund certificates, surplus notes, or debentures of 
domestic mutual insurance companies if they conform to the 
following provisions: 
    (a) bankers acceptances of United States banks shall be 
limited to those eligible for purchase by the Federal Reserve 
System; 
    (b) certificates of deposit shall be limited to those 
issued by banks and savings institutions that meet the 
collateral requirements established in section 9.031, unless 
sufficient volume is unavailable at competitive interest rates.  
In that event, noncollateralized certificates of deposit may be 
purchased from United States banks and savings institutions that 
are rated in the highest quality category by a nationally 
recognized rating agency; 
    (c) commercial paper shall be limited to those issued by 
United States corporations or their Canadian subsidiaries, shall 
be of the highest quality and mature in 270 days or less; 
    (d) mortgage participation or pass through certificates 
evidencing interests in pools of first mortgages or trust deeds 
on improved real estate located in the United States where the 
loan to value ratio for each loan as calculated in accordance 
with section 61A.28, subdivision 3 does not exceed 80 percent 
for fully amortizable residential properties and in all other 
respects meets the requirements of section 61A.28, subdivision 
3.  In addition the state board may purchase from the Minnesota 
housing finance agency all or any part of any pool of 
residential mortgages, not in default, which has previously been 
financed by the issuance of bonds or notes of the agency.  The 
state board may also enter into a commitment with the agency, at 
the time of any issue of bonds or notes, to purchase at a 
specified future date, not exceeding 12 years from the date of 
the issue, the amount of mortgage loans then outstanding and not 
in default, which have been made or purchased from the proceeds 
of the bonds or notes.  The state board may charge reasonable 
fees for any such commitment, and may agree to purchase the 
mortgage loans at a price such that the yield thereon to the 
state board will, in its judgment, be comparable to that 
available on similar mortgage loans at the date of the bonds or 
notes.  The state board may also enter into agreements with the 
agency for the investment of any portion of the funds of the 
agency for such period, with such withdrawal privileges, and at 
such guaranteed rate of return, if any, as may be agreed between 
the state board and the agency.  
    (e) collateral for repurchase agreements and reverse 
repurchase agreements shall be limited to letters of credit and 
securities authorized in this section; 
    (f) guaranteed investment contracts shall be limited to 
those issued by insurance companies rated in the top four 
quality categories by a nationally recognized rating agency; 
    (g) savings accounts shall be limited to those fully 
insured by the Federal Deposit Insurance Corporation or the 
Federal Savings and Loan Insurance Corporation.  
    Sec. 2.  Minnesota Statutes 1986, section 176A.02, 
subdivision 1, is amended to read:  
    Subdivision 1.  [FUND CREATED.] The fund is created as a 
nonprofit independent public corporation for the purpose of 
insuring employers against liability for personal injuries for 
which their employees may be entitled to benefits under chapter 
176.  The fund must be organized as a domestic mutual insurance 
company. 
    Sec. 3.  Minnesota Statutes 1986, section 176A.02, 
subdivision 2, is amended to read:  
    Subd. 2.  [BOARD OF DIRECTORS.] The board of directors 
consists of seven members and the commissioner of labor and 
industry and the manager of the fund who shall be an ex 
officio member members.  Each director shall hold office until a 
successor is appointed and qualifies.  Each director shall 
represent a policyholder and may be an employee of a 
policyholder.  A policyholder may designate a person to 
represent them on the board.  The initial board of directors 
shall be appointed by the governor and shall consist of seven 
members, and the commissioner of labor and industry.  Each 
member of the initial board shall be either an employer or 
employee.  If the fund is operational and issuing policies upon 
the expiration of the terms of the initial board and thereafter, 
the governor shall appoint every other director until the 
governor has made four appointments.  The remaining three 
directors shall be chosen by the fund's policyholders.  In 
addition to the commissioner, no more than one member of the 
board shall be a representative of a governmental entity.  At 
least two members of the board shall represent private, for 
profit, enterprises.  No member of the board may represent or be 
an employee of an insurance company.  
    The membership terms shall be as provided in section 
15.0575.  The membership compensation shall be set by the board. 
    The board shall annually elect a chair from among its 
members and other officers it deems necessary for the 
performance of its duties.  
    Sec. 4.  Minnesota Statutes 1986, section 176A.04, is 
amended to read:  
    176A.04 [GENERAL POWERS.] 
    For the purpose of exercising the specific powers granted 
in this chapter and effectuating the other purposes of this 
chapter, the fund:  
    (a) may sue and be sued;  
    (b) may have a seal and alter it at will;  
    (c) may make, amend, and repeal rules relating to the 
conduct of the business of the fund;  
    (d) may enter into contracts relating to the administration 
of the fund;  
    (e) may rent, lease, buy, or sell property in its own name 
and may construct or repair buildings necessary to provide space 
for its operations;  
    (f) may declare a dividend when there is an excess of 
assets over liabilities, and minimum surplus requirements as 
consistent with chapter 60A;  
    (g) may pay medical expenses, rehabilitation expenses, 
compensation due claimants of insured employers, pay salaries, 
and pay administrative and other expenses;  
    (h) may hire personnel and set salaries and compensation; 
and 
    (i) may perform all other functions and exercise all other 
powers of a domestic mutual insurance company that are necessary 
or, appropriate, or convenient to administer the fund. 
     Sec. 5.  [EFFECTIVE DATE.] 
    This act is effective the day following final enactment. 
    Approved May 11, 1987