An Act To Amend the Laws Relating to Group Trusts Established by Self-insurers of Workers' Compensation Benefits
Maine Legislature, Session 127, LD 0958
Committee: Insurance and Financial Services
Sponsors: WHITTEMORE, BECK, MORRISON
Amends: 39-A MRSA §403

Legislative Document 
No. 958 
S.P. 338 
In Senate, March 17, 2015 
An Act To Amend the Laws Relating to Group Trusts Established 
by Self-insurers of Workers' Compensation Benefits 
Submitted by the Department of Professional and Financial Regulation pursuant to Joint 
Rule 204. 
Reference to the Committee on Insurance and Financial Services suggested and ordered 
printed. 
HEATHER J.R. PRIEST 
Secretary of the Senate 
Presented by Senator WHITTEMORE of Somerset. 
Cosponsored by Representative BECK of Waterville and 
Representative: MORRISON of South Portland. 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  39-A MRSA §403, sub-§9, as amended by PL 2013, c. 172, §2, is 
repealed and the following enacted in its place: 
9.  Acceptable deposit funds or investments for trust funds.  The following 
requirements apply to assets deposited or held in trust as security for an individual or 
group self-insurer under this section. 
A.  In addition to cash, the deposit funds or permissible investments for trust funds 
acceptable to the Superintendent of Insurance as a security deposit are: 
(1)  Bonds, notes and bills that are issued by and are the direct obligation of the 
United States Treasury; 
(2)  Bonds issued or guaranteed by United States government agencies; 
(3)  Commercial paper rated as "P-1" by Moody's Investors Service, Inc. or "A-1" 
or better by Standard and Poor's Corporation or the rating equivalent of either by 
any other nationally recognized statistical rating agency; 
(4)  Money market funds rated "AAm" or "AAm-G" or better by Standard and 
Poor's Corporation or the rating equivalent of any other nationally recognized 
statistical rating agency; 
(5)  Certificates of deposit issued by a duly chartered commercial bank or thrift 
institution in the State protected by the Federal Deposit Insurance Corporation if 
the bank or institution possesses assets of at least $100,000,000 and maintains a 
Tier 1 capital ratio equal to or greater than 6%; 
(6)  Bonds that are issued by corporations or municipalities and that are rated 
"A2" or better by Moody's Investors Service, Inc. or "A" or better by Standard 
and Poor's Corporation or the rating equivalent of either by any other nationally 
recognized statistical rating agency; and 
(7)  Other investments specifically approved by the superintendent. 
B.  Investments must be diversified in a prudent manner to ensure that funds are 
maintained at a sufficient level to discharge workers' compensation obligations 
incurred by the employer pursuant to this Title as those obligations become due and 
payable.  At least 30% of the portfolio, as measured at market value, must consist of 
cash, direct obligations of the United States Treasury, commercial paper, money 
market funds or certificates of deposit.  No more than 40% of the portfolio, as 
measured at market value, may be invested in bonds issued or generated by United 
States government agencies, with no more than 10% of the portfolio invested in a 
single issuer.  No more than 50% of the portfolio, as measured at market value, may 
be invested in corporate or municipal bonds, with no more than 5% of the portfolio 
invested in a single issuer.  No more than 25% of the corporate bond portion of the 
portfolio, as measured at market value, may be invested in a single industry, as 
defined by the North American Industry Classification System of the United States 
Department of Commerce, United States Census Bureau. 
C.  If the portfolio no longer meets the requirements of this subsection as a result of a 
rating downgrade or a change in financial condition or market value, the value may 
not be considered in determining whether a deposit or trust has surplus available for 
distribution, and the superintendent has discretion to discount or disallow the value of 
the investment for purposes of determining whether additional security is required.  
In the case of a portfolio that no longer meets the diversification requirements of 
paragraph B, the self-insurer may designate the specific assets to be disallowed, as 
long as the remaining assets meet the requirements of paragraph B. 
SUMMARY 
This bill modifies the acceptable investments and diversification requirements for 
workers' compensation self-insurance trusts, providing for the portfolio to contain up to 
40% in bonds issued or generated by United States government agencies, while 
decreasing the permissible percentage of corporate or municipal bonds.