Minnesota Administrative Rules

2785.0900 MEMBERSHIP.

Subpart 1.

Availability.

Pool membership is open only to political subdivisions of Minnesota, except that private employers may join a public/private pool. A pool may establish other nondiscriminatory criteria for membership. Nothing in parts 2785.0100 to 2785.1600 requires a pool to accept members that do not meet the pool's underwriting standards.

Subp. 2.

Joining.

New members must be admitted according to the standards and procedures specified in the bylaws. Membership is not effective before the applicant has signed a membership agreement affirming its commitment to comply with the bylaws and parts 2785.0100 to 2785.1600, including joint and several liability. The membership agreement must disclose that under the rules governing the pool, the board of trustees, or the Minnesota commissioner of commerce may order that an assessment be levied against the members, if necessary to maintain the pool's sound financial condition.

Subp. 3.

Public/private pool membership.

Only Minnesota domiciled employers whose primary places of employment are within 40 miles of a political subdivision pool member are eligible for membership in a public/private pool. If all political subdivisions elect to withdraw from a public/private pool, the pool's authority to self-insure is terminated simultaneously with the date of the last political division's withdrawal. As a condition of a private employer's membership in a public/private pool, the employer must furnish a surety bond in a form prescribed by the commissioner. The pool shall be the bond's obligee, conditioned on the employer's paying all premiums, penalties, and assessments when due. The bond must be maintained on file with the commissioner until the end of the period of continuing liability, or until the pool terminates, whichever occurs first. The period of continuing liability is as defined in part 2785.1400, subpart 1. The bond must provide a penalty amount no less than:

A.

the greatest one-year premium paid by the member for the coverage through the pool during the past three years;

B.

if the member has not belonged to the pool for one full fund year, the annual premium to be paid by the member for the first year's coverage; or

C.

if the member no longer belongs to the pool, the greatest one-year premium paid by the past member during the final three years in the pool.

Subp. 4.

Leaving.

The membership agreement must state the procedures for leaving the pool. A member must notify the pool of its desire to withdraw not less than 30 days before the date upon which it desires to withdraw. If the board determines that the withdrawal would cause the pool to be in violation of the minimum annual premium requirement or would compromise the pool's financial integrity, the pool must notify the commissioner as required under part 2785.1100, subpart 2. Withdrawal is prohibited and void unless:

A.

the member has belonged to the pool continuously for the period required by the bylaws, which shall provide for:

(1)

a minimum of one complete fund year, in the case of employee health benefit pools; or

(2)

a minimum of three complete fund years, in the case of all other pools; and

B.

all outstanding premiums and assessments owed by the member have been paid.

Subp. 5.

Expulsion.

No less often than annually a pool must compare the status and experience of each member with the criteria for expulsion in the bylaws. Expulsion is subject to the procedures and requirements for voluntary withdrawal of a member, except that:

A.

a member may be expelled with outstanding premiums or assessments owing; and

B.

a member may be expelled notwithstanding that the minimum term of membership has not been satisfied.

Subp. 6.

Runoff pool membership.

After revocation of a pool's self-insurance authority or after a pool notifies the commissioner in writing of its intent to end self-insurance authority voluntarily, no member may join, leave, or be expelled from the pool.

Statutory Authority:

MS s 471.617; 471.982

History:

10 SR 274

Published Electronically:

September 14, 2007