Source: https://www.revisor.mn.gov/statutes/2013/cite/79A/full
Timestamp: 2020-01-22 01:09:19
Document Index: 490364137

Matched Legal Cases: ['art 2780', 'art 5', 'art 2', 'art 1', 'art 1', 'art 2', 'art 2', 'art 2', 'art 2', 'art 2', 'art 2', 'art 2', 'art 2', 'art 1', 'art 2']

﻿ Ch. 79A MN Statutes
CHAPTER 79A. WORKERS' COMPENSATION SELF-INSURANCE
79A.02 SELF-INSURERS' ADVISORY COMMITTEE.
79A.05 REVOCATION OF CERTIFICATE TO SELF-INSURE.
79A.07 PREFERRED SUBROGATION RIGHTS OF SELF-INSURERS' SECURITY FUND OR SURETY.
79A.08 LEGISLATIVE INTENT.
79A.10 ASSUMPTION OF WORKERS' COMPENSATION OBLIGATIONS OF INSOLVENT SELF-INSURER.
79A.11 REIMBURSEMENT FOR OBLIGATIONS PAID AND ASSUMED.
79A.12 MAINTENANCE OF ASSETS OR LINE OF CREDIT TO CONTINUE PAYMENT OF COMPENSATION OBLIGATIONS.
79A.13 AUDIT; ANNUAL REPORT.
79A.14 LETTER OF CREDIT FORM.
79A.17 RULES.
79A.18 EXISTING RULES.
COMMERCIAL SELF-INSURANCE GROUPS
79A.19 COMMERCIAL SELF-INSURANCE GROUPS; DEFINITIONS.
79A.20 ELIGIBILITY REQUIREMENTS FOR COMMERCIAL SELF-INSURANCE GROUPS.
79A.27 INDEMNITY AGREEMENT FORM.
79A.29 RULES.
79A.30 GOVERNING LAW.
79A.31 COMMERCIAL SELF-INSURANCE GROUP SECURITY FUND MEMBERSHIP; WITHDRAWAL FROM SELF-INSURERS' SECURITY FUND.
79A.32 REPORTING TO LICENSED DATA SERVICE ORGANIZATIONS.
Subd. 2.Advice to commissioner.
At the request of the commissioner, the committee shall meet and shall advise the commissioner with respect to whether or not an applicant to become a private self-insurer in the state of Minnesota has met the statutory requirements to self-insure. The Department of Commerce may furnish the committee with any financial data which it has, but a member of the advisory committee who may have a conflict of interest in reviewing the financial data shall not have access to the data nor participate in the discussions concerning the applicant. Financial data received from the commissioner is nonpublic data. The committee shall advise the commissioner if it has any information that any private self-insurer may become insolvent.
Subd. 3.Audit of self-insurance application.
(a) The self-insurers' security fund may retain a certified public accountant to perform services for, and report directly to, the commissioner of commerce. When requested by the Workers' Compensation Self-Insurers' Advisory Committee, the certified public accountant shall review an application to self-insure, including the applicant's financial data. The certified public accountant shall provide a report to the commissioner of commerce indicating whether that applicant has met the requirements of section 79A.03, subdivisions 2 and 3. Additionally, the certified public accountant shall provide advice and counsel to the commissioner about relevant facts regarding that applicant's financial condition.
(b) If the report of the certified public accountant is used by the commissioner as the basis for the commissioner's determination regarding the applicant's self-insurance status, the certified public accountant shall be made available to the commissioner for any hearings or other proceedings arising from that determination.
(c) The commissioner shall provide the advisory committee with the summary report by the certified public accountant and any financial data in possession of the Department of Commerce that is otherwise available to the public.
The cost of the review shall be the obligation of the self-insurer's security fund.
Subd. 4.Recommendations to commissioner regarding revocation.
After each fifth anniversary from the date each individual and group self-insurer becomes certified to self-insure, the committee shall review all relevant financial data filed with the Department of Commerce that is otherwise available to the public and make a recommendation to the commissioner about whether each self-insurer's certificate should be revoked. For group self-insurers who have been in existence for five years or more and have been granted renewal authority, a level of funding in the common claims fund must be maintained at not less than the greater of either: (1) one year's claim losses paid in the most recent year; or (2) one-third of the security deposit posted with the Department of Commerce according to section 79A.04, subdivision 2. This provision supersedes any requirements under section 79A.03, subdivision 10, and Minnesota Rules, part 2780.5000.
1988 c 674 s 2; 1992 c 510 art 5 s 1,2; 1995 c 231 art 2 s 20-22; 1995 c 258 s 60; 1999 c 177 s 74-76; 2001 c 215 s 36; 2003 c 2 art 1 s 12
A certificate to self-insure may be revoked by the commissioner at any time for good cause. After revocation, the self-insurer may request a hearing. Good cause includes, among other things, failure to maintain a security deposit as required by this chapter, failure to pay assessments of the self-insurers' security fund, or the failure or inability of the employer to fulfill obligations under chapter 176 or this chapter. Good cause also includes failure to provide proof of renewal of the security 15 days before its expiration.
A self-insured employer must comply with section 176.181 and all applicable rules to operate during the pendency of its appeal of a decision under this section.
1988 c 674 s 5
The self-insurers' security fund by making payment of compensation under this chapter has the same preference over the other debts of the principal or the principal's estate as is given by law to the person directly entitled to the compensation.
1988 c 674 s 7
It is the intent of the legislature in enacting sections 79A.08 to 79A.10 to provide for the continuation of workers' compensation benefits delayed due to the failure of a private self-insured employer to meet its compensation obligations, whenever the commissioner of commerce issues a certificate of default or there is a declaration of bankruptcy or insolvency by a court of competent jurisdiction. With respect to the continued liability of a surety for claims that arise under a bond after termination of that bond and to a surety's liability for the cost of administration of claims, it is the intent of the legislature to provide that that liability ceases upon lawful termination of that bond. This applies to all surety bonds which are purchased by the self-insured employer after July 1, 1988. The legislature finds and declares that the establishment of the self-insurers' security fund is a necessary component of a complete system of workers' compensation, required by chapter 176, to have adequate provisions for the comfort, health, safety, and general welfare of any and all workers and their dependents to the extent of relieving the consequences of any industrial injury or death, and full provision for securing the payment of compensation.
1988 c 674 s 8
Subdivision 1.Order of commissioner.
Upon order of the commissioner pursuant to section 79A.04, subdivision 10, the security fund shall assume the workers' compensation obligations of an insolvent private self-insurer.
Subd. 2.Act or omissions; penalties.
Notwithstanding subdivision 1, the security fund shall not be liable for the payment of any penalties assessed for any act or omission on the part of any person other than the security fund or its appointed administrator, including, but not limited to, the penalties provided in chapter 176 unless the security fund or its appointed administrator would be subject to penalties under chapter 176 as the result of the actions of the security fund or its administrator.
Subd. 3.Party in interest.
The security fund shall be a party in interest in all proceedings involving compensation claims against an insolvent self-insurer whose compensation obligations have been paid or assumed by the security fund. The security fund shall have the same rights and defenses as the insolvent private self-insurer, including, but not limited to, all of the following:
Subd. 4.Payments to security fund.
Notwithstanding anything in this chapter or chapter 176 to the contrary, in the event that the self-insurers' security fund assumes the obligations of any bankrupt or insolvent private self-insurer pursuant to this section, then the proceeds of any surety bond, Workers' Compensation Reinsurance Association, specific excess insurance or aggregate excess insurance policy, and any special compensation fund payment or second injury fund or supplementary benefit reimbursements shall be paid to the self-insurers' security fund instead of the bankrupt or insolvent private self-insurer or its successor in interest. No special compensation fund reimbursements shall be made to the security fund unless the special compensation fund assessments pursuant to section 176.129 are paid and the reports required thereunder are made to the special compensation fund.
1988 c 674 s 10
Subdivision 1.Insolvent insurer.
The security fund shall have the right and obligation to obtain reimbursement from an insolvent private self-insurer up to the amount of the private self-insurer's workers' compensation obligations paid and assumed by the security fund, including reasonable administrative and legal costs. This right includes, but is not limited to, a right to claim for wages and other necessities of life advanced to claimants as subrogee of the claimants in any action to collect against the private self-insurer as debtor.
Subd. 2.Security deposits.
The security fund shall have the right and obligation to obtain and retain the security deposit of an insolvent private self-insurer to apply to the private self-insurer's current or future compensation obligations, including reasonable administrative and legal costs, paid or assumed by the security fund and to other current or future obligations of the security fund. Reimbursement of administrative costs, including legal costs, shall be subject to approval by a majority of the security fund's voting trustees. The security fund shall be a party in interest in any action to obtain the security deposit for the payment of compensation obligations of an insolvent self-insurer.
Subd. 2a.Replacement insurance policy.
The insolvent self-insurer may obtain an insurance policy as described in section 79A.06, subdivision 5, to discharge further workers' compensation obligations assumed by the self-insurers' security fund on behalf of the insolvent insurer. At the self-insurers' security fund's option and in its sole discretion, any part of the insolvent self-insurer's security deposit may be used to fund the acquisition of this policy. After the security deposit has been used to: (1) fund the acquisition of this policy; (2) pay all direct and indirect administrative and professional expenses of the fund related to the insolvent self-insurer; and (3) to the extent not covered by the insurance policy, pay the insolvent self-insurer's losses, allocated loss expense and unallocated loss expense, any part of the insolvent self-insurer's security deposit that remains must be promptly returned to the insolvent self-insurer.
Subd. 3.Legal actions.
The security fund shall have the right to bring an action against any person or entity to recover compensation paid and liability assumed by the security fund, including, but not limited to, any excess insurance carrier of the insolvent private self-insurer, and any person or entity whose negligence or breach of any obligation contributed to any underestimation of the private self-insurer's total accrued liability as reported to the commissioner.
Subd. 4.Party in interest.
The security fund may be a party in interest in any action brought by any other person seeking damages resulting from the failure of an insolvent private self-insurer to pay workers' compensation required pursuant to this subdivision.
1988 c 674 s 11; 2000 c 483 s 28,29
Subdivision 1.Assets maintained.
The security fund shall maintain cash, readily marketable securities, or other assets, or a line of credit, approved by the commissioner, sufficient to immediately continue the payment of the compensation obligations of an insolvent private self-insurer pending receipt of the security deposit, surety bond proceeds, irrevocable letter of credit, or, if necessary, assessment of the members. The commissioner may establish the minimum amount to be maintained by, or immediately available to, the security fund for this purpose.
The security fund may assess each of its members a pro rata share of the funding necessary to carry out its obligation and the purposes of this chapter. Total annual assessments in any calendar year shall not exceed ten percent of paid indemnity losses, as defined in section 176.129, made by the self-insured employer during the preceding calendar year. The annual assessment calculation shall not include supplementary benefits paid which will be reimbursed by the special compensation fund. Funds obtained by assessments pursuant to this subdivision may only be used for the purposes of this chapter. The trustees shall certify to the commissioner the collection and receipt of all money from assessments, noting any delinquencies. The trustees shall take any action deemed appropriate to collect any delinquent assessments.
1988 c 674 s 12; 1990 c 450 s 2; 2005 c 132 s 33
The trustees shall annually contract for an independent certified audit of the financial activities of the fund. An annual report on the financial status of the fund as of June 30 shall be submitted to the commissioner and to each member.
The security fund shall be established on July 1, 1988, or 90 days after July 1, 1988, whichever occurs later. All applications for private self-insurers which are made after July 1, 1988, prior to the establishment of the security fund, shall comply with all requirements of this chapter. Applications for private self-insurers which are made after January 1, 1988, but prior to July 1, 1988, shall, prior to the establishment of the security fund, comply with the requirements of this chapter. The security fund shall be liable for payment of benefits only for members where there has been a declaration of bankruptcy or insolvency by a court of competent jurisdiction after the date on which the security fund is established, or where the commissioner has issued a certificate of default which has occurred after the date on which the security fund is established.
1988 c 674 s 13
The form for the letter of credit under this chapter shall be:
State of Minnesota (Beneficiary)
By order of ....................(Self-Insurer) we are instructed to open a clean irrevocable Letter of Credit in your favor for United States $.................(Amount).
We undertake that drawings under this Letter of Credit will be honored upon presentation of your draft drawn on ...............(issuing bank), at ...............(Address) prior to expiration date.
The Letter of Credit expires on ..............., but will automatically extend for an additional one year if you have not received by registered mail notification of intention not to renew 60 days prior to the original expiration date and each subsequent expiration date.
Except as expressly stated herein, this undertaking is not subject to any condition or qualification. The obligation of .................(issuing bank) under this letter of credit shall be the individual obligation of .................(issuing bank), in no way contingent upon reimbursement with respect thereto.
1988 c 674 s 14; 1990 c 426 art 1 s 11
The security fund and its board of trustees shall not be subject to (1) the Open Meeting Law, chapter 13D, (2) the Open Appointments Law, (3) the Minnesota Government Data Practices Act, chapter 13, and (4) except where specifically set forth, the Administrative Procedure Act.
1988 c 674 s 16; 2012 c 290 s 67
The commissioner may adopt, amend, and repeal rules reasonably necessary to carry out the purposes of sections 79A.01 to 79A.17. This authorization includes, but is not limited to, the adoption of rules to do all of the following:
(1) except as otherwise specifically provided by statute, specifying what constitutes ability to self-insure and to pay any compensation which may become due under chapter 176;
(2) specifying what constitutes a failure or inability to fulfill an insolvent self-insurer's obligations under this chapter;
(3) interpreting and defining the terms used in this chapter;
(4) establishing procedures and standards for hearing and determinations and providing for those determinations to be appealed;
(5) except where otherwise specifically provided by statute, specifying the standards, forms, and content of agreements, forms, and reports between parties who have obligations pursuant to this chapter;
(6) providing for the combinations and relative liabilities of security deposits, assumptions, and guarantees used pursuant to this chapter; and
(7) disclosing otherwise private data concerning self-insurers to courts or the self-insurers' security fund and specifying appropriate safeguards for that information.
The Self-Insurers' Advisory Committee may make recommendations to the commissioner under this section as it deems appropriate.
1988 c 674 s 17
If there is any inconsistency among any rule or statute and Laws 1988, chapter 674, Laws 1988, chapter 674, shall govern.
1988 c 674 s 21
For the purposes of sections 79A.19 to 79A.32, the terms defined in this section have the meanings given them. If there is any inconsistency between this section and section 79A.01, the provisions of this section shall govern.
Subd. 2.Accountant.
"Accountant" means a certified public accountant who is not an employee of any member of the commercial self-insurance group and is not affiliated with any individual or organization providing services other than accounting services to the group.
Subd. 3.Actuary.
"Actuary" means an individual who has attained the status of associate or fellow of the Casualty Actuarial Society who is not an employee of any member of the commercial self-insurance group and is not affiliated with any individual or organization providing services other than actuarial services to the group.
Subd. 4.Common claims fund.
"Common claims fund" means the cash, cash equivalents, or investment accounts maintained by the commercial self-insurance group to pay its workers' compensation liabilities.
"Member" means an employer that participates in a commercial self-insurance group.
Subd. 6.Commercial self-insurance group.
"Commercial self-insurance group" means a group of employers that are self-insured for workers' compensation under chapter 176 and elects to operate under sections 79A.19 to 79A.32 rather than sections 79A.01 to 79A.18.
Subd. 7.Commercial self-insurance group security fund.
"Commercial self-insurance group security fund" means the commercial self-insurance group security fund established pursuant to this chapter.
"Trustees" means the board of trustees of the commercial self-insurance group security fund.
1995 c 231 art 2 s 28
Subdivision 1.Group eligibility.
A commercial self-insurance group consists of two or more employers in similar industries. The commercial self-insurance group shall not incorporate or form a business trust pursuant to chapter 318.
Subd. 2.Membership eligibility.
A commercial self-insurance group may only admit employers who meet the eligibility requirements established by the group including financial criteria, underwriting guidelines, risk profile, and any other requirements stated in the commercial self-insurance group's bylaws or plan of operation.
1995 c 231 art 2 s 29
(h) A compiled combined financial statement of all group members prepared by the commercial self-insurance group's accountant and a list of members included in such statements. An "Agreed-Upon Procedures" report, as determined by the commissioner, indicating combined net worth, total assets, cash flow, and net income of the group members may be filed in lieu of the compiled combined financial statement.
(3) the annual premium of the commercial self-insurance group to be charged to initial members is at least 150 percent of the WCRA minimum retention in effect at the time of the application;
1995 c 231 art 2 s 30; 1999 c 168 s 1,2; 1999 c 177 s 84; 2010 c 384 s 43
INDIVIDUAL AND PROPORTIONATE INDEMNITY AGREEMENT
WHEREAS, (name of company) has agreed to be and has been accepted as a member of (name of commercial self-insurance group).
WHEREAS, (name of company) has agreed to be bound by all of the provisions of the Minnesota Workers' Compensation Act and all rules promulgated thereunder.
WHEREAS, that (name of company) has agreed to be bound by bylaws or plan of operation and all amendments thereto of (name of commercial self-insurance group);
1. (Name of company) shall be jointly and severally liable for all claims and expenses of all the members of (name of commercial self-insurance group) arising in any fund year in which (name of company) is a member of the commercial self-insurance group.
2. (Name of commercial self-insurance group) shall assess (name of company) on an individual and proportionate basis for its share of the total liability of the commercial self-insurance group.
3. In the event that (name of company) is not a member for the full year, it shall be only liable for a pro rata share of that liability.
IN WITNESS WHEREOF, the (name of company) and (name of commercial self-insurance group) have caused this indemnity agreement to be executed by its authorized officers:
Commercial Self-Insurance Group Name Company Name
By: . By: .
date: . date: .
1995 c 231 art 2 s 36
(3) the Minnesota Government Data Practices Act, chapter 13; and
1995 c 231 art 2 s 37; 2012 c 290 s 68
The commissioner may adopt, amend, and repeal rules reasonably necessary to carry out the purposes of this chapter. Minnesota Rules, chapter 2780, shall apply to commercial self-insurance groups unless otherwise specified by rule.
1995 c 231 art 2 s 38
If there is any inconsistency between sections 79A.19 to 79A.32 and any other statute or rule, the provisions of sections 79A.19 to 79A.32 shall govern with respect to commercial self-insurance groups.
1995 c 231 art 2 s 39
Subdivision 1.Withdrawal.
Any group self-insurer that is a member of the self-insurers' security fund established under section 79A.09, may elect to withdraw from that fund and become a member of the commercial self-insurance group security fund established under section 79A.26. The transferring group shall be subject to the provisions and requirements of sections 79A.19 to 79A.32 as of the date of transfer. Additional security may be required pursuant to section 79A.24. Group self-insurers electing to transfer to the commercial self-insurance group fund shall not be subject to the provisions of section 79A.06, subdivision 5, including, but not limited to, assessments by the self-insurers' security fund. Notice of transfer must be filed by November 1 for all transfers that must be effective at midnight on December 31.
Subd. 2.Transfer; notice to commissioner.
A group self-insurer shall provide to the commissioner written notice of its intent to transfer membership to the commercial self-insurance group security fund. The notice shall be sent at least 30 days prior to the date the group self-insurer requests membership in the commercial self-insurance group security fund.
Subd. 3.Transfer of potential and contingent liabilities.
Upon transfer pursuant to subdivision 1, the commercial self-insurance group security fund shall assume all of the past, present, and future potential and contingent workers' compensation liabilities of the transferring group in the event of any bankruptcy or insolvency of that group or its failure to meet its obligations under this chapter and chapter 176.
A group self-insurer established after August 1, 1995, may elect to become a member of either the self-insurers' security fund or the commercial self-insurance group security fund. However, once the election is made, a group may not transfer to the other security fund.
1995 c 231 art 2 s 40; 1996 c 305 art 1 s 26; 1998 c 339 s 11
[Repealed by amendment, 2006 c 255 s 71]
Through data service organizations licensed under chapter 79, self insurers may:
(1) individually, or with self-insurers commonly owned, managed, or controlled, conduct research and collect statistics to investigate, identify, and classify information relating to causes or prevention of losses; and
(2) at the request of a private self-insurer or self-insurer group, submit and collect data, including payroll and loss data; and perform calculations, including calculations of experience modifications of individual self-insured employers.
1995 c 231 art 2 s 41; 2006 c 255 s 71