1.1 	A bill for an act
1.2 	relating to insurance; authorizing service cooperatives to offer health reinsurance 
1.3 	programs; allowing local units of government to participate in the programs; 
1.4 	amending Minnesota Statutes 2004, sections 123A.21, subdivision 7; 471.61, by 
1.5 	adding a subdivision; 471.617, subdivision 3, by adding a subdivision.
1.6 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.7 	Section 1. Minnesota Statutes 2004, section 123A.21, subdivision 7, is amended to 
1.8 	read:
1.9 		Subd. 7.Educational programs and services. The board of directors of each SC 
1.10 	shall submit annually a plan to the members. The plan shall identify the programs and 
1.11 	services which are suggested for implementation by the SC during the following year and 
1.12 	shall contain components of long-range planning determined by the SC. These programs 
1.13 	and services may include, but are not limited to, the following areas:
1.14 	(1) administrative services;
1.15 	(2) curriculum development;
1.16 	(3) data processing;
1.17 	(4) distance learning and other telecommunication services;
1.18 	(5) evaluation and research;
1.19 	(6) staff development;
1.20 	(7) media and technology centers;
1.21 	(8) publication and dissemination of materials;
1.22 	(9) pupil personnel services;
1.23 	(10) planning;
1.24 	(11) secondary, postsecondary, community, adult, and adult vocational education;
2.1 	(12) teaching and learning services, including services for students with special 
2.2 	talents and special needs;
2.3 	(13) employee personnel services;
2.4 	(14) vocational rehabilitation;
2.5 	(15) health, diagnostic, and child development services and centers;
2.6 	(16) leadership or direction in early childhood and family education;
2.7 	(17) community services;
2.8 	(18) shared time programs;
2.9 	(19) fiscal services and risk management programs, including health reinsurance 
2.10 	programs;
2.11 	(20) technology planning, training, and support services;
2.12 	(21) health and safety services;
2.13 	(22) student academic challenges; and
2.14 	(23) cooperative purchasing services.
2.15 	An SC may contract for goods and services in conjunction with its health reinsurance 
2.16 	programs, including management, actuarial, investment, and legal services from others 
2.17 	within or without this state to ensure the efficient operation of these programs.

2.18 	Sec. 2. Minnesota Statutes 2004, section 471.61, is amended by adding a subdivision 
2.19 	to read:
2.20 		Subd. 6.Reinsuring health risks.  Any political subdivision, or any two or more 
2.21 	political subdivisions acting jointly, may provide for the reinsuring of risks incurred as a 
2.22 	result of providing the insurance or protection authorized by this section by participating 
2.23 	in a pool operated by a service cooperative or cooperatives pursuant to section 471.617, 
2.24 	subdivision 3a.

2.25 	Sec. 3. Minnesota Statutes 2004, section 471.617, subdivision 3, is amended to read:
2.26 		Subd. 3.Stop-loss coverage. Any self-insurance plan covering fewer than 1,000 
2.27 	employees shall include excess or stop-loss coverage provided by a licensed insurance 
2.28 	company, an insurance company approved pursuant to sections  60A.195 to  60A.209, 
2.29 	or service plan corporation, but excess or stop-loss coverage need not be obtained for 
2.30 	long-term disability. 
2.31 	This excess or stop-loss coverage shall cover all eligible claims incurred during 
2.32 	the term of the policy or contract. In addition to excess or stop-loss coverage, the 
2.33 	self-insurance plan shall provide for reserving of an appropriate amount of funds to cover 
2.34 	the estimated cost of claims incurred, but unpaid, during the term of the policy or contract 
3.1 	which shall be added to the expected claim level. These funds shall be in addition to funds 
3.2 	reserved to cover the claims paid during the term of the policy or contract. The excess or 
3.3 	stop-loss coverage shall be provided at levels in excess of self-insured retention which is 
3.4 	appropriate, taking into account the number of covered persons in the group.
3.5 	Coverage under subdivision 3a qualifies under this subdivision.

3.6 	Sec. 4. Minnesota Statutes 2004, section 471.617, is amended by adding a subdivision 
3.7 	to read:
3.8 		Subd. 3a.Reinsurance pools.  (a) A statutory or home rule charter city, county, 
3.9 	school district, or instrumentality of any of them may provide for the reinsuring of risks 
3.10 	incurred as a result of providing the health benefits authorized by this section through 
3.11 	a pool operated by a service cooperative or service cooperatives established pursuant 
3.12 	to section 123A.21.
3.13 	(b) The commissioner of commerce shall supervise the operations of a reinsurance 
3.14 	pool by a service cooperative or cooperatives according to this section. The commissioner 
3.15 	of commerce may examine the cooperative or cooperatives. The reinsurance policy forms, 
3.16 	contracts, premium rates, and assessments of the service cooperative or cooperatives are 
3.17 	subject to the approval of the commissioner of commerce. The policy forms, contracts, 
3.18 	and premium rates are considered approved if not disapproved by the commissioner of 
3.19 	commerce within 60 days after the date they are filed with the commissioner of commerce. 
3.20 	Assessments made by the service cooperative or cooperatives are considered approved if 
3.21 	not disapproved by the commissioner of commerce within 15 business days after they 
3.22 	are filed with the commissioner of commerce. The service cooperative or cooperatives 
3.23 	shall notify the commissioner of all service cooperative or board meetings during which 
3.24 	it is contemplated that the operations of the reinsurance pool will be discussed, and 
3.25 	the commissioner or the commissioner's designee may attend these meetings. The 
3.26 	cooperative or cooperatives shall file an annual report with the commissioner on or before 
3.27 	July 1 of each year, beginning July 1, 2008, describing its reinsurance activities during 
3.28 	the preceding calendar year. The report must include a financial report and a summary of 
3.29 	reinsurance claims paid. The annual report must be available for public inspection.

3.30 	Sec. 5. EFFECTIVE DATE.
 3.31 	Sections 1 to 4 are effective the day following final enactment.