2006 Minnesota Statutes

62I.16 STABILIZATION RESERVE FUND.
    Subdivision 1. Creation. There is created a stabilization reserve fund. Each policyholder
shall pay to the association a stabilization reserve fund charge of 33 percent of each premium
payment due for insurance through the association. This charge shall be separately stated in
the policy. The association shall cancel the policy of any policyholder who fails to pay the
stabilization reserve fund charge.
    Subd. 2. Payment. The association shall promptly pay into the stabilization reserve fund all
fund charges it collects from its policyholders and any retrospective premium refunds payable
under the group retrospective rating plan.
    Subd. 3. Supervision. All money paid into the fund shall be separately accounted for by
the board of directors. The money held in the fund may be invested. All investment income
shall be credited to the fund. All expenses of the administration of the fund shall be charged
against the fund. The money held in the fund shall be used solely for the purpose of discharging
when due any retrospective premium charges payable by policyholders and any retrospective
premium refunds payable to policyholders under the group retrospective rating plan. Payment of
retrospective premium charges shall be made upon certification of the amount due. If all money
accruing to the fund is exhausted in payment of retrospective premium charges, all liability
and obligations of the association's policyholders with respect to the payment of retrospective
premium charges shall terminate and shall be conclusively presumed to have been discharged.
Any stabilization reserve fund charges from a particular policy year not used to pay retrospective
premiums must be returned to policyholders after all claims and expense obligations from that
particular policy year are satisfied.
    Subd. 4. Exemption. The board of directors may, upon their own motion or upon application
of any applicant or insured, exempt any group from the payment of the stabilization reserve
charge. The exemption shall be granted only to those groups who are unable to obtain insurance
coverage in the private market as a result of the private market's refusal to write coverage for
that group rather than because of loss experiences or risks posed by the applicant or insured as
an individual. It shall be presumed that a group is qualified for this exemption if more than 20
percent of the members of that group are unable to obtain the insurance coverage that they seek.
The board of directors shall also consider granting exemption if any members of the same group
are unable to obtain coverage in the private market even though no claims have been made against
them or payments made on their behalf by any insurer within the last three years.
    Subd. 5. Surcharge. In addition to determining the basic rate for coverages to be offered by
the Joint Underwriting Association, the association shall also develop a surcharge plan or similar
method for adjusting the rate to be charged to those persons who have had claims made against
them. The surcharge plan shall take into effect the risk posed to the association by the applicant or
the insured. The surcharge plan shall be sufficient to provide for the sound financial operation of
the plan based upon commonly agreed upon actuarial principles.
History: 1986 c 455 s 35; 1987 c 337 s 83; 1989 c 260 s 8; 2003 c 21 s 10