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April 2, 2002
Member
Minnesota Self-Insurers’ Security Fund
RE: Self-Insurers’ Security Fund-
A message from the Chair
Greetings:
The Minnesota Self-Insurers’ Security Fund Board of
Trustees has asked me, as its Chair, to report to you on some
current issues, which may be of interest.
First, as you know, all private self-insurers are required
to file statistical reports to the Minnesota Workers’
Compensation Insurers Association no later than April 1. The
MWCIA has now announced the availability of a PC software
program which will facilitate the electronic reporting of
self-insured data. This program is being provided free to
all self-insurers. The program, referred to as ASIDE , has
been endorsed by the Minnesota Department of Commerce and
is now available on the MWCIA web site at www.mwcia.org.
Inquiries should be directed to the MWCIA at selfinsured@mwcia.org
or 952-897-1737 (or 952-897-6426 or 952-897-6425). The MWCIA
would like to have as many self-insurers as possible use this
software to file the statistical reports due by April 1, 2002,
if possible. For those self-insurers who are unable to make
the transition, the Department of Commerce has advised us
that it will schedule training sessions for self-insurers
in the near future, which will assist in making the transition
to use of the new software program.
On the legislative front, the Department of Commerce Omnibus
Bill is on track to be enacted into law this session. This
Bill contains a provision, which addresses the situation in
which a self-insurer goes bankrupt but obtains an order through
the bankruptcy court to allow it to continue to pay its workers’
compensation liabilities. The proposed amendment clarifies
that, in that situation, the Department of Commerce does not
need to issue a Certificate of Default, liquidate the self-insurers’
posted security and require the Self-Insurers’ Security
Fund to undertake payment of the bankrupt self-insurers’
claims. If the bankrupt self-insurer ceases payment of claims
at some point in the future, the Department of Commerce would
have the ability to liquidate the posted security and require
SISF to take over the claims payments at that time.
Another legislative proposal contained in the Workers’
Compensation Advisory Council Bill, which is also headed for
passage, redefines the term “paid indemnity losses”
to include vocational rehabilitation benefits. The self-insurers’
reporting of “paid indemnity losses” is important
since those losses are used as a basis for Special Compensation
Fund assessments as well as Self-Insurers’ Security
Fund assessments. The effective date of this change will not
occur until 2003. The Commissioner of Labor and Industry has
promised to work with the self-insurers before the 2003 legislative
session in order to clarify any confusion.
Another action which the Board of Trustees took at its meeting
on January 15, 2002 relates to self-insurers who terminate
pursuant to Minn. Stat. Section 79A.06, Subd. 5(b). That provision
contains a formula to calculate the amount of the self-insurers’
buy-out. Effective January 1, 2002, the average annualized
assessment rate is designated as 2.05%. In addition, certain
self-insurers may use the short form for calculating its buy-out
from the actuarial report by applying the following WCRA retention
factors in actuarial report:
Low retention 0.705
High retention 0.617
Super retention 0.590
If any of you have any further questions, please feel free
to contact any member of the Board of Trustees or our General
Counsel, Laurence F. Koll and Andrew J. Morrison at (651)
291-9155 for further information.
Sincerely,
David J. Hennes
Chair
Minnesota Self-Insurers’ Security Fund
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