Minnesota Session Laws - 1993, Regular Session

  
    Laws of Minnesota 1993 

                        CHAPTER 210-S.F.No. 692 
           An act relating to insurance; workers' compensation; 
          regulating the minimum deposit requirements for 
          self-insurers; amending Minnesota Statutes 1992, 
          section 79A.04, subdivision 2. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1992, section 79A.04, 
subdivision 2, is amended to read: 
    Subd. 2.  [MINIMUM DEPOSIT.] The minimum deposit is 110 
percent of the private self-insurer's estimated future liability.
Up to ten percent of that deposit may be used to secure payment 
of all administrative and legal costs relating to or arising 
from the employer's self-insuring.  As used in this 
section, "private self-insurer" includes both current and former 
members of the self-insurers' security fund; and "private 
self-insurers' estimated future liability" means the private 
self-insurers' total of estimated future liability as determined 
by a member an Associate or Fellow of the Casualty Actuarial 
Society every year for group member private self-insurers and, 
for a nongroup member private self-insurer's authority to 
self-insure, every year for the first five years.  After the 
first five years, the nongroup member's total shall be as 
determined by a member an Associate or Fellow of the Casualty 
Actuarial Society every two years, and each such actuarial study 
shall include a projection of future losses during the two-year 
period until the next scheduled actuarial study, less payments 
anticipated to be made during that time.  
    All data and information furnished by a private 
self-insurer to an Associate or Fellow of the Casualty Actuarial 
Society for purposes of determining private self-insurers' 
estimated future liability must be certified by an officer of 
the private self-insurer to be true and correct with respect to 
payroll and paid losses, and must be certified, upon information 
and belief, to be true and correct with respect to reserves.  
The certification must be made by sworn affidavit.  In addition 
to any other remedies provided by law, the certification of 
false data or information pursuant to this subdivision may 
result in a fine imposed by the commissioner of commerce on the 
private self-insurer up to the amount of $5,000, and termination 
of the private self-insurers' authority to self-insure.  The 
determination of private self-insurers' estimated future 
liability by an Associate or Fellow of the Casualty Actuarial 
Society shall be conducted in accordance with standards and 
principles for establishing loss and loss adjustment expense 
reserves by the Actuarial Standards Board, an affiliate of the 
American Academy of Actuaries.  The commissioner may reject an 
actuarial report that does not meet the standards and principles 
of the Actuarial Standards Board, and may further disqualify the 
actuary who prepared the report from submitting any future 
actuarial reports pursuant to this chapter.  Within 30 days 
after the actuary has been served by the commissioner with a 
notice of disqualification, an actuary who is aggrieved by the 
disqualification may request a hearing to be conducted in 
accordance with chapter 14.  Based on a review of the actuarial 
report, the commissioner of commerce may require an increase in 
the minimum security deposit in an amount the commissioner 
considers sufficient. 
    Estimated future liability is determined by first taking 
the total amount of the self-insured's future liability of 
workers' compensation claims and then deducting the total amount 
which is estimated to be returned to the self-insurer from any 
specific excess insurance coverage, aggregate excess insurance 
coverage, and any supplementary benefits or second injury 
benefits which are estimated to be reimbursed by the special 
compensation fund. Supplementary benefits or second injury 
benefits will not be reimbursed by the special compensation fund 
unless the special compensation fund assessment pursuant to 
section 176.129 is paid and the reports required thereunder are 
filed with the special compensation fund.  In the case of surety 
bonds, bonds shall secure administrative and legal costs in 
addition to the liability for payment of compensation reflected 
on the face of the bond.  In no event shall the security be less 
than the last retention limit selected by the self-insurer with 
the workers' compensation reinsurance association.  The posting 
or depositing of security pursuant to this section shall release 
all previously posted or deposited security from any obligations 
under the posting or depositing and any surety bond so released 
shall be returned to the surety.  Any other security shall be 
returned to the depositor or the person posting the bond. 
    Presented to the governor May 12, 1993 
    Signed by the governor May 14, 1993, 10:04 p.m.