Bill Text: OR SB96 | 2013 | Regular Session | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Relating to exemption from security requirements for self-insured employer groups.

Sponsorship: Partisan Bill (Republican 1)

Status: (Passed) 2013-07-02 - Effective date, January 1, 2014. [SB96 Detail]

Download: Oregon-2013-SB96-Introduced.html

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     77th OREGON LEGISLATIVE ASSEMBLY--2013 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 1430

                         Senate Bill 96

Sponsored by Senator THOMSEN (Presession filed.)

                             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.

  Authorizes certain groups of self-insured employers to qualify
for exemption from security requirements for self-insured
employers.

                        A BILL FOR AN ACT
Relating to exemption from security requirements for self-insured
  employer groups; amending ORS 656.407.
Be It Enacted by the People of the State of Oregon:
  SECTION 1. ORS 656.407 is amended to read:
  656.407. (1) An employer shall establish proof with the
Director of the Department of Consumer and Business Services that
the employer is qualified either:
  (a) As a carrier-insured employer by causing proof of coverage
provided by an insurer to be filed with the director; or
  (b) As a self-insured employer by establishing proof that the
employer has an adequate staff qualified to process claims
promptly and has the financial ability to make certain the prompt
payment of all compensation and other payments that may become
due to the director under this chapter.
  (2) Except as provided in subsection (3) of this section, a
self-insured employer shall establish proof of financial ability
by providing security that the director determines acceptable by
rule. The security must be in an amount reasonably sufficient to
insure payment of compensation and other payments that may become
due to the director but not less than the employer's normal
expected annual claim liabilities and in no event less than
$100,000. In arriving at the amount of security required under
this subsection, the director may take into consideration the
financial ability of the employer to pay compensation and other
payments and probable continuity of operation. The security shall
be held by the director to secure the payment of compensation for
injuries to subject workers of the employer and to secure other
payments that may become due from the employer to the director
under this chapter. Moneys received as security under this
subsection shall be deposited with the State Treasurer in an
account separate and distinct from the General Fund. Interest
earned by the account shall be credited to the account. The
amount of security may be increased or decreased from time to
time by the director.
  (3)(a) A city   { - or - }  { + , + } county  { + or group of
self-insured employers made up primarily of cities or
counties + } that wishes to be exempt from subsection (2) of this
section may make written application therefor to the director.
The application shall include a copy of the   { - city's or
county's - }  most recent annual audit  { + of the city, county
or self-insured employer group + }   { - as - }  filed with the
Secretary of State under ORS 297.405 to 297.740, information
regarding the establishment of a loss reserve account for the
payment of compensation to injured workers and such other
information as the director may require. The director shall
approve the application and the city   { - or - }  { + , + }
county  { + or self-insured employer group + } shall be exempt
from subsection (2) of this section if the director finds that:
  (A) The city { + , + }   { - or - }  county  { + or
self-insured employer group + } has been   { - a - }
self-insured   { - employer - }  in compliance with subsection
(2) of this section for more than three consecutive years prior
to making the application referred to in this subsection   { - as
an independently self-insured employer and not as part of a
self-insured group - } .
  (B) The city   { - or - }  { + , + } county { +  or
self-insured employer group + } has in effect a loss reserve
account:
  (i) That is actuarially sound and that is adequately funded as
determined by an annual audit under ORS 297.405 to 297.740 to pay
all compensation to injured workers and amounts due the director
pursuant to this chapter. A copy of the annual audit shall be
filed with the director. Upon a finding that there is probable
cause to believe that the loss reserve account is not actuarially
sound, the director may require a city   { - or - }  { + , + }
county { +  or self-insured employer group + } to obtain an
independent actuarial audit of the loss reserve account. The
requirements of this subsection are in addition to and not in
lieu of any other audit or reporting requirement otherwise
prescribed by or pursuant to law.
  (ii) That is dedicated to and may be expended only for the
payment of compensation and amounts due the director by the city
  { - or - }  { + , + } county { +  or self-insured employer
group + } under this chapter.
  (b) The director shall have the first lien and priority right
to the full amount of the loss reserve account required to pay
the present discounted value of all present and future claims
under this chapter.
  (c) The city   { - or - }  { + , + } county  { + or
self-insured employer group + } shall notify the director no
later than 60 days prior to any action to discontinue the loss
reserve account. The city   { - or - }  { + , + } county  { + or
self-insured employer group + } shall advise the director of the
 { - city's or county's - }  plans  { + of the city, county or
self-insured employer group + } to submit the security deposits
required in subsection (2) of this section, or obtain coverage as
a carrier-insured employer prior to the date the loss reserve
account ceases to exist. If the city   { - or - }  { + , + }
county { +  or self-insured employer group + } elects to
discontinue self-insurance, it shall submit such security as the
director may require to insure payment of all compensation and
amounts due the director for the period the city   { - or - }
 { + , + } county  { + or self-insured employer group + } was
self-insured.
  (d) In order to requalify as a self-insured employer, the city
 { - or - }  { + , + } county  { + or self-insured employer
group + } must deposit prior to discontinuance of the loss
reserve account such security as is required by the director
pursuant to subsection (2) of this section.
  (e) Notwithstanding ORS 656.440, if prior to the date of
discontinuance of the loss reserve account the director has not
received the security deposits required in subsection (2) of this
section, the   { - city's or county's - }  certificate of
self-insurance  { + of the city, county or self-insured employer
group + } is automatically revoked as of that date.
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