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79.251 ADMINISTRATION OF ASSIGNED RISK PLAN.
    Subdivision 1. General duties of commissioner. (a)(1) The commissioner shall have all
the usual powers and authorities necessary for the discharge of the commissioner's duties under
this section and may contract with individuals in discharge of those duties. The commissioner
shall audit the reserves established (a) for individual cases arising under policies and contracts of
coverage issued under subdivision 4 and (b) for the total book of business issued under subdivision
4. If the commissioner determines on the basis of an audit that there is an excess surplus in the
assigned risk plan, the commissioner must notify the commissioner of finance who shall transfer
assets of the plan equal to the excess surplus to the budget reserve account in the general fund.
(2) The commissioner shall monitor the operations of section 79.252 and this section and
shall periodically make recommendations to the governor and legislature when appropriate, for
improvement in the operation of those sections.
(3) All insurers and self-insurance administrators issuing policies or contracts under
subdivision 4 shall pay to the commissioner a .25 percent assessment on premiums for policies
and contracts of coverage issued under subdivision 4 for the purpose of defraying the costs of
performing the duties under clauses (1) and (2). Proceeds of the assessment shall be deposited in
the state treasury and credited to the general fund.
(4) The assigned risk plan shall not be deemed a state agency.
(5) The commissioner shall monitor and have jurisdiction over all reserves maintained for
assigned risk plan losses.
(b) As used in this subdivision, "excess surplus" means the amount of assigned risk plan
assets in excess of the amount needed to pay all current liabilities of the plan, including, but
not limited to:
(1) administrative expenses;
(2) benefit claims; and
(3) if the assigned risk plan is dissolved under subdivision 8, the amounts that would be due
insurers who have paid assessments to the plan.
    Subd. 2. Merit rating plan. To assist small businesses with good safety records, the
commissioner shall develop a merit rating plan applicable to all employers holding policies issued
pursuant to subdivision 4. The plan shall provide that nonexperience rated employers, with no
lost time claims for the last three policy years, shall receive 33 percent credit. The credit must
be applied directly to the premium charged for the policy. Nonexperience rated employers with
two or more lost time claims for the last three policy years may receive a debit. Experience rated
employers shall receive a maximum credit or debit of ten percent of premium. The merit rating
plan shall be subject to adjustment by the commissioner as necessary to fulfill the commissioner's
assigned risk plan responsibilities.
    Subd. 2a. Assigned risk rating plan. (a) Employers insured through the assigned risk plan
are subject to paragraphs (b) and (c).
(b) Classifications must be assigned according to a uniform classification system approved
by the commissioner.
(c) Rates must be modified according to an experience rating plan approved by the
commissioner. Any experience rating plan is subject to Minnesota Rules, parts 2700.2800 and
2700.2900.
    Subd. 3. Rates. Insureds served by the assigned risk plan shall be charged premiums based
upon a rating plan, including a merit rating plan adopted by the commissioner by rule. The
commissioner shall annually, not later than January 1 of each year, establish the schedule of rates
applicable to assigned risk plan business. Assigned risk premiums shall not be lower than rates
generally charged by insurers for the business. The commissioner shall fix the compensation
received by the agent of record. The establishment of the assigned risk plan rates and agent
fees are not subject to chapter 14.
    Subd. 4. Administration. The commissioner shall enter into service contracts as necessary
or beneficial for accomplishing the purposes of the assigned risk plan. Services related to the
administration of policies or contracts of coverage shall be performed by one or more qualified
insurance companies licensed pursuant to section 60A.06, subdivision 1, clause (5), paragraph (b),
or self-insurance administrators licensed pursuant to section 176.181, subdivision 2, clause (2),
paragraph (a). A qualified insurer or self-insurance administrator shall possess sufficient financial,
professional, administrative, and personnel resources to provide the services contemplated in the
contract. Services related to assignments, data management, assessment collection, and other
services shall be performed by a licensed data service organization. The cost of those services is
an obligation of the assigned risk plan.
    Subd. 4a. Medical cost containment. The assigned risk plan must consider utilizing
managed care plans certified under section 176.1351 with respect to its covered employees.
In addition, the assigned risk plan must implement a medical cost containment program. The
program must, at a minimum, include:
(1) billings review to determine if claims are compensable under chapter 176;
(2) utilization of cost management specialists familiar with billing practice guidelines;
(3) review of treatment to determine if it is reasonable and necessary and has a reasonable
chance to cure and relieve the employee's injury;
(4) a system to reduce billed charges to the maximum permitted by law or rule;
(5) review of medical care utilization; and
(6) reporting of health care providers suspected of providing unnecessary, inappropriate, or
excessive services to the commissioner of labor and industry.
    Subd. 4b. Groups. The assigned risk plan must create a program that attempts to group
employers in the same or similar risk classification for purposes of group premium underwriting
and claims management. The assigned risk plan must engage in extensive safety consultation with
group members to reduce the extent and severity of injuries of group members. The consultation
should include on-site inspections and specific recommendations as to safety improvements.
    Subd. 5. Assessments. The commissioner shall assess all insurers licensed pursuant to
section 60A.06, subdivision 1, clause (5), paragraph (b) an amount sufficient to fully fund the
obligations of the assigned risk plan, if the commissioner determines that the assets of the
assigned risk plan are insufficient to meet its obligations. The assessment of each insurer shall
be in a proportion equal to the proportion which the amount of compensation insurance written
in this state during the preceding calendar year by that insurer bears to the total compensation
insurance written in this state during the preceding calendar year by all licensed insurers.
Amounts assessed under this subdivision are considered a liability of the assigned risk
plan, to be repaid upon dissolution of the plan.
    Subd. 6. Agents. A person licensed under chapter 60K may submit an application for
coverage to the assigned risk plan and receive a fee from the assigned risk plan for submitting the
application. However, the licensee is not an agent of the assigned risk plan for purposes of state
law. All checks or similar instruments submitted in payment of assigned risk plan premiums must
be made payable to the assigned risk plan and not the agent.
    Subd. 7. Investment of assets. The commissioner shall certify and transfer to the state Board
of Investment all assigned risk plan assets which in the commissioner's judgment are not required
for immediate use. The state Board of Investment shall invest the certified assets, and may invest
the assets consistent with the provisions of section 11A.14. All investment income and losses
attributable to the investment of assigned risk plan assets must be credited to the assigned risk
plan. When the commissioner certifies to the state board that invested assets are required for
immediate use, the state board shall sell assets to provide the amount of assets the commissioner
certifies. The board shall transfer the sale proceeds to the commissioner.
    Subd. 8. Dissolution. Upon the dissolution of the assigned risk plan, the commissioner
shall proceed to wind up the affairs of the plan, settle its accounts, and dispose of its assets. The
assets and property of the assigned risk plan must be applied and distributed in the following
order of priority:
(1) to the establishment of reserves for claims under policies and contracts of coverage issued
by the assigned risk plan before termination;
(2) to the payment of all debts and liabilities of the assigned risk plan, including the
repayment of loans and assessments;
(3) to the establishment of reserves considered necessary by the commissioner for contingent
liabilities or obligations of the assigned risk plan other than claims arising under policies and
contracts of coverage; and
(4) to the state of Minnesota.
If the commissioner determines that the assets of the assigned risk plan are insufficient to
meet its obligations under clauses (1), (2), and (3), excluding the repayment of assessments, the
commissioner shall assess all insurers licensed pursuant to section 60A.06, subdivision 1, clause
(5), paragraph (b), an amount sufficient to fully fund these obligations.
History: 1981 c 346 s 14; 1983 c 289 s 114 subd 1; 1983 c 290 s 5; 1983 c 293 s 63;
1984 c 655 art 1 s 92; 1989 c 260 s 24; 1990 c 450 s 1; 1992 c 510 art 3 s 4,5; 1993 c 13 art
2 s 4; 1995 c 231 art 2 s 6,7; 1995 c 258 s 55,56; 2002 c 374 art 8 s 2; 2002 c 387 s 5; 2003
c 2 art 1 s 11,45 subd 9; 2006 c 255 s 64,65