1.1                          A bill for an act 
  1.2             relating to workers' compensation; modifying 
  1.3             provisions on cessation of self-insurance; amending 
  1.4             Minnesota Statutes 1995 Supplement, section 79A.06, 
  1.5             subdivision 5. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 1995 Supplement, section 
  1.8   79A.06, subdivision 5, is amended to read: 
  1.9      Subd. 5.  [PRIVATE EMPLOYERS WHO HAVE CEASED TO BE 
  1.10  SELF-INSURED.] (a) Private employers who have ceased to be 
  1.11  private self-insurers shall discharge their continuing 
  1.12  obligations to secure the payment of compensation which is 
  1.13  accrued during the period of self-insurance, for purposes of 
  1.14  Laws 1988, chapter 674, sections 1 to 21, by compliance with all 
  1.15  of the following obligations of current certificate holders: 
  1.16     (1) Filing reports with the commissioner to carry out the 
  1.17  requirements of this chapter; 
  1.18     (2) Depositing and maintaining a security deposit for 
  1.19  accrued liability for the payment of any compensation which may 
  1.20  become due, pursuant to chapter 176.  However, if a private 
  1.21  employer who has ceased to be a private self-insurer purchases 
  1.22  an insurance policy from an insurer authorized to transact 
  1.23  workers' compensation insurance in this state which provides 
  1.24  coverage of all claims for compensation arising out of injuries 
  1.25  occurring during the period the employer was self-insured, 
  2.1   whether or not reported during that period, the policy will 
  2.2   discharge the obligation of the employer to maintain a security 
  2.3   deposit for the payment of the claims covered under the policy.  
  2.4   The policy may not be issued by an insurer unless it has 
  2.5   previously been approved as to form and substance by the 
  2.6   commissioner; and 
  2.7      (3) Paying within 30 days all assessments of which notice 
  2.8   is sent by the security fund, for a period of seven years from 
  2.9   the last day its certificate of self-insurance was in effect.  
  2.10  Thereafter, the private employer who has ceased to be a private 
  2.11  self-insurer may either:  (a) continue to pay within 30 days all 
  2.12  assessments of which notice is sent by the security fund until 
  2.13  it has no incurred liabilities for the payment of compensation 
  2.14  arising out of injuries during the period of self-insurance; or 
  2.15  (b) pay the security fund a cash payment equal to four percent 
  2.16  of the net present value of all remaining incurred liabilities 
  2.17  for the payment of compensation under sections 176.101 and 
  2.18  176.111 as certified by a member of the casualty actuarial 
  2.19  society.  Assessments shall be based on the benefits paid by the 
  2.20  employer during the calendar year immediately preceding the 
  2.21  calendar year in which the employer's right to self-insure is 
  2.22  terminated or withdrawn.  At the time of the cessation of a 
  2.23  member self-insurer's authority to self-insure, that member 
  2.24  shall obtain and file with the commissioner an actuarial opinion 
  2.25  of its outstanding liabilities as determined by an associate or 
  2.26  fellow of the casualty actuarial society.  The opinion shall 
  2.27  separate liability for indemnity benefits from liability for 
  2.28  medical benefits, and shall discount each at four percent per 
  2.29  annum to net present value.  Within 30 days after notification 
  2.30  of approval of the actuarial opinion by the commissioner, the 
  2.31  member shall pay to the security fund an amount equal to 120 
  2.32  percent of that discounted outstanding indemnity liability, 
  2.33  multiplied by the greater of the average annual assessment rate 
  2.34  since the inception of the security fund or the rate at the time 
  2.35  of the most recent assessment prior to termination. 
  2.36     A former member who has paid the security fund in 
  3.1   accordance with this clause and later receives authority from 
  3.2   the commissioner to self-insure again shall be assessed under 
  3.3   section 79A.12, subdivision 2, only on indemnity benefits paid 
  3.4   on injuries which occurred after the former member received 
  3.5   authority to self-insure again, provided that the member 
  3.6   furnishes verified data regarding those benefits to the security 
  3.7   fund. 
  3.8      (b) In addition to proceedings to establish liabilities and 
  3.9   penalties otherwise provided, a failure to comply may be the 
  3.10  subject of a proceeding before the commissioner.  An appeal from 
  3.11  the commissioner's determination may be taken pursuant to the 
  3.12  contested case procedures of chapter 14 within 30 days of the 
  3.13  commissioner's written determination. 
  3.14     Any current or past member of the self-insurers' security 
  3.15  fund is subject to service of process on any claim arising out 
  3.16  of chapter 176 or this chapter in the manner provided by section 
  3.17  5.25, or as otherwise provided by law.  The issuance of a 
  3.18  certificate to self-insure to the private self-insured employer 
  3.19  shall be deemed to be the agreement that any process which is 
  3.20  served in accordance with this section shall be of the same 
  3.21  legal force and effect as if served personally within this state.