Bill Text: OR HB3044 | 2011 | Regular Session | Introduced

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Bill Title: Relating to self-insured public bodies.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Failed) 2011-06-30 - In committee upon adjournment. [HB3044 Detail]

Download: Oregon-2011-HB3044-Introduced.html

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     76th OREGON LEGISLATIVE ASSEMBLY--2011 Regular Session

NOTE:  Matter within  { +  braces and plus signs + } in an
amended section is new. Matter within  { -  braces and minus
signs - } is existing law to be omitted. New sections are within
 { +  braces and plus signs + } .

LC 1585

                         House Bill 3044

Sponsored by Representative WHISNANT (at the request of Special
  Districts Association of Oregon)

                             SUMMARY

The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.

  Requires self-insurance programs established by multiple public
bodies to make independently audited financial statement
available to Director of Department of Consumer and Business
Services. Requires program to make statement available to program
participants and director not later than six months after close
of program's fiscal year.

                        A BILL FOR AN ACT
Relating to self-insured public bodies; amending ORS 30.282.
Be It Enacted by the People of the State of Oregon:
  SECTION 1. ORS 30.282 is amended to read:
  30.282. (1) The governing body of any local public body may
procure insurance against:
  (a) Tort liability of the public body and its officers,
employees and agents acting within the scope of their employment
or duties; or
  (b) Property damage.
  (2) In addition to, or in lieu of procuring insurance, the
governing body may establish a self-insurance program against the
tort liability of the public body and its officers, employees and
agents or against property damage. If the public body has
authority to levy taxes, it may include in its levy an amount
sufficient to establish and maintain a self-insurance program on
an actuarially sound basis.
  (3) Notwithstanding any other provision of law, two or more
local public bodies may jointly provide by intergovernmental
agreement for anything that subsections (1) and (2) of this
section authorize individually.
  (4) As an alternative or in addition to establishment of a
self-insurance program or purchase of insurance or both, the
governing body of any local public body and the Oregon Department
of Administrative Services may contract for payment by the public
body to the department of assessments determined by the
department to be sufficient, on an actuarially sound basis, to
cover the potential liability of the public body and its
officers, employees or agents acting within the scope of their
employment or duties under ORS 30.260 to 30.300, and costs of
administration, or to cover any portion of potential liability,
and for payment by the department of valid claims against the
public body and its officers, employees and agents acting within
the scope of their employment or duties. The department may
provide the public body evidence of insurance by issuance of a
certificate or policy.
  (5) Assessments paid to the department under subsection (4) of
this section shall be paid into the Insurance Fund created under
ORS 278.425, and claims paid and administrative costs incurred
under subsection (4) of this section shall be paid out of the
Insurance Fund, and moneys in the Insurance Fund are continuously
appropriated for those purposes. When notice of any claim is
furnished as provided in the agreement, the claim shall be
handled and paid, if appropriate, in the same manner as a claim
against a state agency, officer, employee or agent, without
regard to the amount the local public body has been assessed.
  (6) A self-insurance program established by three or more
public bodies under subsections (2) and (3) of this section is
subject to the following requirements:
  (a) The annual contributions to the program must amount in the
aggregate to at least $1 million.
  (b) The program must provide documentation that defines program
benefits and administration.
  (c) Program contributions and reserves must be held in separate
accounts and used for the exclusive benefit of the program.
  (d) The program must maintain adequate reserves. Reserve
adequacy shall be calculated annually with proper actuarial
calculations including the following:
  (A) Known claims, paid and outstanding;
  (B) Estimate of incurred but not reported claims;
  (C) Claims handling expenses;
  (D) Unearned contributions; and
  (E) A claims trend factor.
  (e) The program must maintain an unallocated reserve account
equal to 25 percent of annual contributions, or $250,000,
whichever is greater. As used in this paragraph, 'unallocated
reserves' means the amount of funds determined by a licensed
independent actuary to be greater than what is required to fund
outstanding claim liabilities, including an estimate of claims
incurred but not reported.
  (f) The program must make an annual independently audited
financial statement available to the participants of the program
 { +  and to the Director of the Department of Consumer and
Business Services + }. { +  The annual financial statement must
be made available to participants and the director not later than
six months after the close of the program's fiscal year. + }
  (g) The program must maintain adequate excess or reinsurance
against the risk of economic loss.
  (h) The program, a third party administrator or an owner of a
third party administrator may not collect commissions or fees
from an insurer.
  (7) A program operated under subsection (6) of this section
that fails to meet any of the listed requirements for a period
longer than 30 consecutive days shall be dissolved and any
unallocated reserves returned in proportional amounts based on
the contributions of the public body to the public bodies that
established the program within 90 days of the failure.
  (8) A local public body may bring an action against a program
operated under subsection (6) of this section if the program
fails to comply with the requirements listed in subsection (6) of
this section.
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