1997 Minnesota Statutes

     79A.06 Third-party administrator. 

    Subdivision 1.    Certificate to self-insure.  No 
 person, firm, or corporation, other than an insurer admitted to 
 transact workers' compensation insurance in this state, shall 
 contract to administer claims of self-insured employers as a 
 third-party administrator unless qualified to do so pursuant to 
 section 60A.23, subdivision 8. 

    Subd. 2.    Local office.  A third-party administrator 
 who contracts to administer claims of a self-insured employer 
 shall maintain an office in the state of Minnesota and shall be 
 subject to regulation under this chapter and chapters 60A and 
 72A with respect to the adjustment, administration, and 
 management of workers' compensation claims for any self-insured 
 employer. 

    Subd. 3.    Annual estimate of liability.  A third-party 
 administrator retained by a self-insured employer to administer 
 the employer's workers' compensation claims shall estimate the 
 total accrued liability of the employer for the payment of 
 compensation for the employer's annual report to the 
 commissioner and shall make the estimate both in good faith and 
 with the exercise of a reasonable degree of care.  The use of a 
 third-party administrator does not discharge or alter the 
 employer's responsibilities with respect to the report. 

    Subd. 4.    Failure to submit reports or information; 
 penalty.  Failure to submit reports to the commissioner as 
 required by this chapter may result in the assessment of a 
 penalty which shall not exceed $3,000 for each month or fraction 
 thereof the report is past due.  Failure to submit reports 
 required by statute within 60 days from the due date without 
 written consent of the commissioner shall result in the 
 revocation of the certificate to self-insure.  Penalties shall 
 be deposited in the self-insurers' security fund.  

    Subd. 5.    Private employers who have ceased to be 
 self-insured.  Private employers who have ceased to be private 
 self-insurers shall discharge their continuing obligations to 
 secure the payment of compensation which is accrued during the 
 period of self-insurance, for purposes of Laws 1988, chapter 
 674, sections 1 to 21, by compliance with all of the following 
 obligations of current certificate holders: 

    (1) Filing reports with the commissioner to carry out the 
 requirements of this chapter; 

    (2) Depositing and maintaining a security deposit for 
 accrued liability for the payment of any compensation which may 
 become due, pursuant to chapter 176.  However, if a private 
 employer who has ceased to be a private self-insurer purchases 
 an insurance policy from an insurer authorized to transact 
 workers' compensation insurance in this state which provides 
 coverage of all claims for compensation arising out of injuries 
 occurring during the period the employer was self-insured, 
 whether or not reported during that period, the policy will 
 discharge the obligation of the employer to maintain a security 
 deposit for the payment of the claims covered under the policy.  
 The policy may not be issued by an insurer unless it has 
 previously been approved as to form and substance by the 
 commissioner; and 

    (3) Paying within 30 days all assessments of which notice 
 is sent by the security fund, for a period of seven years from 
 the last day its certificate of self-insurance was in effect.  
 Thereafter, the private employer who has ceased to be a private 
 self-insurer may either:  (a) continue to pay within 30 days all 
 assessments of which notice is sent by the security fund until 
 it has no incurred liabilities for the payment of compensation 
 arising out of injuries during the period of self-insurance; or 
 (b) pay the security fund a cash payment equal to four percent 
 of the net present value of all remaining incurred liabilities 
 for the payment of compensation under sections 176.101 and 
 176.111 as certified by a member of the casualty actuarial 
 society.  Assessments shall be based on the benefits paid by the 
 employer during the calendar year immediately preceding the 
 calendar year in which the employer's right to self-insure is 
 terminated or withdrawn. 

    In addition to proceedings to establish liabilities and 
 penalties otherwise provided, a failure to comply may be the 
 subject of a proceeding before the commissioner.  An appeal from 
 the commissioner's determination may be taken pursuant to the 
 contested case procedures of chapter 14 within 30 days of the 
 commissioner's written determination. 

    Any current or past member of the self-insurers' security 
 fund is subject to service of process on any claim arising out 
 of chapter 176 or this chapter in the manner provided by section 
 5.25, or as otherwise provided by law.  The issuance of a 
 certificate to self-insure to the private self-insured employer 
 shall be deemed to be the agreement that any process which is 
 served in accordance with this section shall be of the same 
 legal force and effect as if served personally within this state.

    HIST: 1988 c 674 s 6; 1992 c 510 art 5 s 8; 1995 c 128 art 1 s 
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