1997 Minnesota Statutes

CHAPTER 176A. Insurance fund

     176A.01 Definitions. 

    Subdivision 1.    Application.  For the purposes of 
 sections 176A.01 to 176A.11, the terms defined in this section 
 have the meanings given them.  

    Subd. 2.    Manager.  "Manager" means the manager of the 
 state fund mutual insurance company. 

    Subd. 3.    Fund.  "Fund" means the state fund mutual 
 insurance company. 

    Subd. 4.    Board.  "Board" means the board of directors 
 of the state fund mutual insurance company.  

    Subd. 5.    Personal injury or injury.  "Personal 
 injury" or "injury" has the meaning given to it in section 
 176.011, subdivision 16.  

    HIST: 1983 c 287 art 2 s 1; 1Sp1986 c 3 art 1 s 25; 1988 c 427 
 s 3 

     176A.02 Creation; purpose; organization of the fund. 

    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. 

    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 ex officio 
 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.  

    Subd. 2a.    Workers' compensation reinsurance association 
 directors.  Until the obligation owed to the workers' 
 compensation reinsurance association pursuant to section 79.371 
 has been satisfied, the workers' compensation reinsurance 
 association shall be entitled to designate two persons to 
 represent the workers' compensation reinsurance association on 
 the board of directors. 

    The workers' compensation reinsurance association's 
 designees shall be appointed to the first available 
 directorships, which the governor is to appoint, which becomes 
 available after the creation of the obligation authorized by 
 section 79.371. 

    The workers' compensation reinsurance association's 
 designees shall resign immediately upon satisfaction of the 
 obligation authorized by section 79.371. 

    Subd. 3.    Fund management.  The management and control 
 of the fund is vested solely in the board.  

    Subd. 4.    Powers and duties of the board.  The board 
 is vested with full power, authority, and jurisdiction over the 
 fund.  The board may perform all acts necessary or convenient in 
 the exercise of any power, authority, or jurisdiction over the 
 fund, either in the administration of the fund or in connection 
 with the insurance business to be carried on by it under the 
 provisions of this chapter, as fully and completely as the 
 governing body of a private insurance carrier to fulfill the 
 objectives and intent of this chapter.  

    Subd. 5.    Manager.  The fund is under the 
 administrative control of the manager appointed by the board 
 pursuant to section 176A.05. 

    Subd. 6.    Personal liability, excluded.  The members 
 of the board and officers or employees of the fund are not 
 liable personally, either jointly or severally, for any debt or 
 obligation created or incurred by the fund.  

    HIST: 1983 c 287 art 2 s 2; 1986 c 444; 1987 c 72 s 2,3; 1993 
 c 228 s 2 

*   NOTE:  Subdivision 2a, as added by Laws 1993, chapter 228, 
*section 2, is repealed effective March 1, 2009.  Laws 1993, 
*chapter 228, section 4.

     176A.03 Specific powers of the fund. 

    Subdivision 1.    General.  For the purpose of carrying 
 out its function the fund has the powers specified in this 
 section.  

    Subd. 2.    Insure workers' compensation liability.  The 
 fund may insure an employer against any workers' compensation 
 claim arising out of and in the course of employment, as fully 
 as any other insurer.  

    Subd. 3.    Coverage outside state.  Policies issued by 
 the fund pursuant to this chapter may also provide workers' 
 compensation coverage required under the laws of states other 
 than Minnesota, including coverages commonly known as "all 
 states coverage."  The fund may apply for and obtain any 
 licensure required in any other state in order to issue the 
 coverage. 

    HIST: 1983 c 287 art 2 s 3; 1992 c 510 art 3 s 31 

     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, pledge, mortgage, 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; 

    (i) may issue guaranty fund certificates, surplus notes or 
 debentures payable out of surplus, borrow money, and agree to 
 pay any rate of return with respect to any guaranty fund 
 certificate, surplus note, debenture, or other instrument, 
 calculated in any manner, and upon such other terms as the board 
 of directors approve; and 

    (j) may perform all other functions and exercise all other 
 powers of a domestic mutual insurance company. 

    HIST: 1983 c 287 art 2 s 4; 1987 c 72 s 4; 1988 c 427 s 1 

     176A.05 Manager. 

    Subdivision 1.    Appointment, qualifications.  The 
 board shall appoint a manager of the fund who shall be in charge 
 of the day-to-day operation of the fund.  The manager shall have 
 proven successful experience as an executive at the general 
 management level.  The manager shall receive compensation as set 
 by the board and shall serve at the pleasure of the board.  

    Subd. 2.    Bond.  Before entering on the duties of the 
 office, the manager shall qualify by giving an official bond in 
 an amount and with sureties approved by the board.  The manager 
 shall file the bond with the secretary of state.  The premium 
 for the bond shall be paid by the fund from the account 
 established in section 176A.07. 

    HIST: 1983 c 287 art 2 s 5 

     176A.06 Manager's powers. 

    Subdivision 1.    General.  Subject to the authority of 
 the board and the provisions of this chapter the manager has the 
 powers and duties prescribed in this section.  

    Subd. 2.    Safety inspection.  The manager may make 
 safety inspections of risks and furnish advisory services to 
 employers on safety and health measures.  

    Subd. 3.    Disbursement of funds.  The manager may act 
 for the fund in collecting and disbursing money necessary to 
 administer the fund and conduct the business of the fund.  

    Subd. 4.    Abstract summary.  The manager shall have an 
 abstract summary of any audit or survey conducted.  

    Subd. 5.    General authority.  The manager may perform 
 all acts necessary in the exercise of any power, authority, or 
 jurisdiction over the fund, either in the administration of the 
 fund or in connection with the insurance business to be carried 
 on by the fund under this chapter, including the establishment 
 of premium rates.  

    HIST: 1983 c 287 art 2 s 6 

     176A.07 Account. 

    Subdivision 1.    State compensation account.  There is 
 created and established under the jurisdiction and control of 
 the fund a revolving account known as the "state compensation 
 account."  

    The manager shall deliver all money collected or received 
 under this chapter to the account.  

    The money in the account may be used by the fund in 
 carrying out its purpose under this chapter.  

    Subd. 2.    Property of fund.  All premiums and other 
 money paid to the fund, all property and securities acquired 
 through the use of money belonging to the fund, and all interest 
 and dividends earned upon money belonging to the fund and 
 deposited or invested by the fund, are the sole property of the 
 fund and shall be used exclusively for the operation and 
 obligations of the fund.  The money of the fund is not state 
 money.  The property of the fund is not state property.  

    Subd. 3.    No state appropriation.  The fund shall not 
 receive any state appropriation at any time other than as 
 provided by Laws 1983, chapter 287, article 2, section 11.  

    HIST: 1983 c 287 art 2 s 7 

     176A.08 Exemption from and applicability of certain laws.

    The fund shall not be considered a state agency for any 
 purpose including, but not limited to, chapters 13, 15, 15A, and 
 43A.  However, the fund shall be subject to sections 179A.01 to 
 179A.25.  The insurance operations of the fund are subject to 
 all of the provisions of chapters 60A and 60B.  The commissioner 
 of commerce has the same powers with respect to the board as the 
 commissioner has with respect to a private workers' compensation 
 insurer under chapters 60A and 60B.  The fund is considered an 
 insurer for the purposes of chapters 60C, 72A, 79, and 176.  The 
 fund is subject to the same tax liability as a mutual insurance 
 company in this state pursuant to section 60A.15.  As a 
 condition of its authority to transact business in this state 
 the fund shall be a member of the workers' compensation 
 reinsurance association and is bound by its plan of operation. 

    HIST: 1983 c 287 art 2 s 8; 1983 c 289 s 114 subd 1; 1984 c 
 462 s 27; 1984 c 655 art 1 s 92; 1987 c 268 art 2 s 29; 1997 c 
 187 art 3 s 27 

     176A.09 Private independent insurance agents. 

    Private independent insurance agents licensed to sell 
 workers' compensation insurance in this state may sell insurance 
 coverage for the fund according to rules adopted by the board. 
 The board shall by rule also establish a schedule of commissions 
 which the fund will pay for the services of an agent.  

    HIST: 1983 c 287 art 2 s 9 

     176A.10 Annual report. 

    The manager shall submit an annual report pursuant to 
 section 3.195 to the governor and legislature indicating the 
 business done by the fund during the previous year and 
 containing a statement of the resources and liabilities of the 
 fund.  

    HIST: 1983 c 287 art 2 s 10 

     176A.11 Appropriation. 

    Subdivision 1.    Authorization.  There is appropriated 
 from the general fund to the state fund mutual insurance company 
 a sum of $125,600 to be available until expended.  There is 
 appropriated from the general fund to the commissioner of 
 finance the amounts of $1,176,900 in fiscal year 1984, and 
 $4,424,900 in fiscal year 1985, for the purpose of transfer to 
 the state fund mutual insurance company upon certification of 
 need in accordance with procedures developed by the 
 commissioner.  If the appropriation for either year is 
 insufficient, the appropriation for the other year is available 
 for it.  Any amount appropriated or transferred plus interest at 
 eight percent a year shall be amortized over a ten-year period 
 and shall be repaid by the fund to the general fund in equal 
 installments at the end of each fiscal year with the first 
 payment occurring on June 30, 1986, provided that the fund shall 
 not begin repayment on this date unless there exists sufficient 
 earned surplus to comply with state law.  Repayment shall then 
 begin under the terms of this subdivision when sufficient earned 
 surplus exists.  

    Subd. 2.    Moratorium on payments.  No payments of 
 principal shall be made in regard to the amounts appropriated 
 pursuant to subdivision 1 until all obligations owed to the 
 workers' compensation reinsurance association pursuant to 
 section 79.371 have been satisfied. 

    Subd. 3.    Insolvency.  In the case of the insolvency 
 of the state fund mutual insurance company, the obligation to 
 the general fund for the amounts appropriated pursuant to 
 subdivision 1 shall be subordinate to the obligations owed to 
 the workers' compensation reinsurance association pursuant to 
 section 79.371.  This provision shall not affect the priority of 
 the obligation to the general fund as to any other creditor of 
 the state fund mutual insurance company or in any other way.  

    HIST: 1983 c 287 art 2 s 11; 1988 c 427 s 3; 1993 c 228 s 3 

*   NOTE:  Subdivisions 2 and 3, as added by Laws 1993, chapter 
*228, section 3, are repealed effective March 1, 2009.  Laws 
*1993, chapter 228, section 4.

     176A.12 Guaranty fund certificates, surplus notes or 
  debentures. 

    Money advanced to the fund in connection with or pursuant 
 to section 176A.11 shall be evidenced by guaranty fund 
 certificates that permit the issuance of other guaranty fund 
 certificates, surplus notes, debentures, or other instruments 
 with equal rights to payment out of surplus of the fund, and in 
 the event of any insufficiency, payments with respect to 
 guaranty certificates may be made pro rata based on outstanding 
 principal amounts of guaranty certificates, surplus notes, 
 debentures, or other instruments with equal rights.  Any 
 guaranty fund certificates or other instruments previously 
 issued to evidence any money advanced to the fund in connection 
 with or pursuant to section 176A.11 shall be exchanged by the 
 commissioner of finance for restated certificates in form and 
 substance consistent with section 176A.11 and this section in 
 order to facilitate the issuance by the fund of other guaranty 
 fund certificates, surplus notes, debentures, or other 
 instruments as provided in this section.  Any amounts accrued 
 but unpaid pursuant to the terms of any outstanding guaranty 
 certificate, surplus note, debenture, or other instrument shall 
 be deemed to be money advanced for the purposes of this chapter. 

    HIST: 1988 c 427 s 2