Minnesota Administrative Code

2780.2200 FINANCIAL STANDARDS. A group proposing to self-insure shall have and maintain: A. A combined net worth of all of the members of at least equal to the greater of ten times the retention selected with the WCRA or one-third of the current annual modified premium of the mem…

2780.2300 WAIVER OF FINANCIAL REQUIREMENTS. The financial requirements of parts 2780.2100, item B, and 2780.2200 shall be waived if the group self-insurer has purchased aggregate excess insurance from an insurer licensed to do business in the state of Minnesota, and that excess i…

2780.2400 PROCESSING APPLICATION. The commissioner shall grant or deny the group's application to self-insure within 30 days after a complete application has been filed, provided that such time may be extended for an additional 30 days upon 15 days prior notice to the applicant. …

2780.2500 ADMINISTRATION OF PROGRAM. Each group self-insurer shall contract with a workers' compensation service company licensed pursuant to parts 2780.6100 to 2780.6900 to administer its program, or employ such personnel that will qualify the group as a licensed workers' compen…

2780.2600 GROUP SELF-INSURER'S FUND. Each group self-insurer shall establish a group self-insurer's fund pursuant to parts 2780.4100 to 2780.5000, which shall be administered by the board of directors of the group. Statutory Authority: MS s 176.181 Published Electronically: Septe…

2780.2800 GROUP MEMBERSHIP. Subpart 1. Period. An employer must belong to the group for at least one year. If a member voluntarily terminates its membership in a group during the second or third year of membership, the group self-insurer shall assess the following member at least…

2780.2900 BYLAWS AND PLANS OF OPERATION. Subpart 1. Adopting. The directors of each group self-insurer shall cause to be adopted a set of bylaws or plan of operation that shall govern the operation of the group. All bylaws or plans of operation or amendments thereto shall be subj…

2780.3000 RECORDS. All group self-insurers shall maintain at a location within the state of Minnesota such records as are necessary to verify the accuracy and completeness of all reports submitted to the commissioner pursuant to this chapter. However, the group self-insurers shal…

2780.3100 NONCOMPLIANCE. Failure of any employer to maintain membership in any group while not otherwise procuring insurance for its workers' compensation liability may subject the employer to the penalties provided in Minnesota Statutes, sections 176.181 and 176.183. Statutory A…

2780.3200 WCRA MEMBERSHIP. The group self-insurer shall be considered a single entity for the purposes of membership in the WCRA and for the purposes of any assessment levied upon self-insurers pursuant to the Workers' Compensation Act. Statutory Authority: MS s 176.181 Published…

2780.3300 BUSINESS TRUST OR INCORPORATION PROHIBITED. The group self-insurer shall not incorporate or form a business trust pursuant to Minnesota Statutes, chapter 318. Statutory Authority: MS s 176.181 Published Electronically: September 14, 2007

2780.3400 NOTICE OF VOLUNTARY TERMINATION. Any group self-insurer that voluntarily terminates its self-insurance authority shall give notice to the commissioner not less than 30 days before the termination is to occur. Statutory Authority: MS s 176.181 Published Electronically: S…

2780.4100 PAYMENT TO FUND. Each group self-insurer shall, not less than ten days prior to the proposed effective date of the group, submit evidence that cash premiums equal to not less than 20 percent of the current year's modified workers' compensation insurance premium reduced …

2780.4200 COMMINGLING OF ASSETS. There shall be no commingling of any assets of the group self-insurer's fund with the assets of any individual member employer or with any other account of the group unrelated to payment of workers' compensation liability incurred by the group. St…

2780.4300 ADMINISTRATORS, DIRECTORS, AND FISCAL AGENTS. Subpart 1. Designation. The group self-insurer shall designate a fiscal agent and/or administrator to administer the financial affairs of the fund. Such fiscal agent or administrator shall furnish a fidelity bond with the se…

2780.4400 ANNUAL AUDIT. The accounts and records of the group self-insurer's fund shall be audited annually. Audits shall be made by certified public accountants, based on generally accepted accounting principles and generally accepted auditing standards, and supported by actuari…

2780.4500 INVESTMENTS. Cash assets of the self-insurer's fund may be invested as provided in Minnesota Statutes, section 60A.11 for a casualty insurance company, provided that investment in common stock, real estate, or indebtedness from any member company is prohibited. In addit…

2780.4600 PURCHASE OF SECURITIES. Any securities purchased by the group self-insurer's fund shall be in such denominations and with dates of maturity to insure that securities may be redeemable at sufficient time and in sufficient amounts to meet the fund's current and long-term …

2780.4700 ANNUAL REPORT. The self-insurer shall report annually, as part of its financial statement, a schedule showing the disposition of all investment income earned during the immediately preceding year. Statutory Authority: MS s 176.181 Published Electronically: September 14,…

2780.4900 NOTICE OF REFUND. The group self-insurer shall give notice to the commissioner of any refund. Said notice shall be accompanied by a statement from the self-insurer's certified public accountant certifying that the proposed refund is in compliance with part 2780.4800. St…

2780.5000 DEFICITS. Subpart 1. Payment. In the event of a deficit in any fund year, such deficit shall be paid up immediately, either from surplus from a fund year other than the current fund year or by assessment of the membership. The commissioner shall be notified within ten d…

2780.6100 LICENSE APPLICATION. Subpart 1. Scope of license. Any person or entity desiring to be licensed as a workers' compensation service company shall apply to the commissioner on forms available from the commissioner. The license shall designate areas of administrative servic…

2780.6200 SUPERVISORY PERSONNEL. If the workers' compensation service company intends to provide claims adjusting, the service company or its subcontractor shall have supervisory personnel who possess at least three years' experience adjusting workers' compensation claims. Furthe…

2780.6300 RESIDENTIAL AGENT. The workers' compensation service company shall have within the state of Minnesota an employee who is able to act as a resident agent, authorized to act in all matters concerning the service company. Statutory Authority: MS s 176.181 Published Electro…

2780.6400 ACCOUNTANTS. The workers' compensation service company shall have employed or retained experienced accountants when necessary to the providing of the administrative services to a self-insurer, when the prospective self-insurer does not provide such expertise. Statutory …

2780.6500 PROCESSING OF APPLICATION. The commissioner shall grant or deny the license within 30 days after a complete application has been filed showing compliance with parts 2780.6100 to 2780.6400. However, if any applicant, an affiliated company of the applicant, or owner or of…

2780.6600 INSPECTION OF RECORDS. Any records of a workers' compensation service company relating to any of the services offered or provided to any self-insurer shall be open to inspection by the commissioner during normal business hours. Statutory Authority: MS s 176.181 Publishe…

2780.6700 INVESTIGATION. Each workers' compensation service company may be investigated by the commissioner upon reasonable belief that the service company is not in compliance with this chapter or is improperly administering workers' compensation claims pursuant to the Workers' …

2780.6800 REVOCATION. Subpart 1. Contested case. Revocation of any workers' compensation service company license shall be pursuant to the contested case procedure in Minnesota Statutes, chapter 14. Subp. 2. Grounds. Grounds for revocation of the workers' compensation service comp…

2780.6900 REPORTS. Subpart 1. Responsibility. Each workers' compensation service company shall be expected to file, or attempt to ensure that the self-insurers it services file, all required reports relating to those services that they provide by the dates established by statute …

2780.9920 INDEMNITY AGREEMENT. INDEMNITY AGREEMENT 1. Whereas, (name of company) has agreed to be and has been accepted as a member of (name of Group Self-Insurer). 2. Whereas, (name of company) has agreed to be bound by all of the provisions of the Minnesota Workers' Compensatio…

2785.0100 DEFINITIONS. Subpart 1. Scope. For the purposes of parts 2785.0100 to 2785.1600, the terms defined in this part have the meanings given them. Subp. 2. Board. "Board" means a pool's board of trustees. Subp. 3. Bylaws. "Bylaws" means the statements and organizational docu…

2785.0200 PURPOSE. Parts 2785.0100 to 2785.1600 govern the formation, operation, and dissolution of political subdivision self-insurance pools. They are intended to ensure that the financial integrity of these pools is maintained, and that they are administered competently and eq…

2785.0300 SCOPE. The following are subject to the requirements of parts 2785.0100 to 2785.1600: A. political subdivision self-insurance pools; B. political subdivisions of Minnesota that form, join, or leave a self-insurance pool; C. private Minnesota employers that form, join, o…

2785.0400 BYLAWS. Subpart 1. Content. Bylaws may contain any provisions that do not conflict with parts 2785.0100 to 2785.1600. Bylaws must, at a minimum, contain the following provisions: A. the pool's name, purpose, fiscal year, and initial date of existence; B. definitions of …

2785.0500 BOARD. Subpart 1. Structure. A pool must have a board of trustees consisting of at least three persons, who must be officials or employees of the members or of the sponsoring association, if any. No member may have more than one representative on the board, unless the p…

2785.0600 APPLICATION. Subpart 1. Initial application. Two or more political subdivisions may apply to the commissioner for authority to form a self-insurance pool. One or more private employers and a political division may apply for authority to form a public/private pool, if st…

2785.0700 ENDING SELF-INSURANCE, RUNOFF PERIOD, AND PLAN DISSOLUTION. Subpart 1. Ending self-insurance authority. A pool may decide to end its self-insurance authority and cease to provide coverage effective at the end of a fund year. The pool must notify the commissioner within …

2785.0800 ADMINISTRATION. Subpart 1. Service company. A pool must contract with a service company for services necessary to the pool's day-to-day operations, except services and responsibilities reserved to the members, the board, individual trustees, the financial administrator,…

2785.0900 MEMBERSHIP. Subpart 1. Availability. Pool membership is open only to political subdivisions of Minnesota, except that private employers may join a public/private pool. A pool may establish other nondiscriminatory criteria for membership. Nothing in parts 2785.0100 to 27…

2785.1000 COVERAGE. Subpart 1. Distinct pool types. Employee health benefit pools and workers' compensation pools may provide only the coverages specified in the definitions for that pool type. Other pools may not provide any of the coverages permitted for employee health benefit…

2785.1100 PREMIUMS, CASH FLOW, AND DIVIDENDS. Subpart 1. Minimum annual premium. All pools must have and maintain an annual premium volume of no less that $300,000. A pool or prospective pool may apply to the commissioner for reduction of the minimum annual premium requirement, s…

2785.1200 RESERVES. A pool must establish reserves for all incurred losses, both reported and unreported, and for unearned premiums. To the extent that the amount of a loss is uncertain, the reserve must be set conservatively. As the degree of uncertainty concerning a loss is cha…

2785.1300 STOP-LOSS INSURANCE. Subpart 1. Purchase and change. A pool may purchase stop-loss insurance for indemnification of a portion of its losses. If the pool determines that a stop-loss insurance policy will be terminated or modified causing a violation of subpart 2, or othe…

2785.1400 DEFICIT AND ASSESSMENTS. Subpart 1. Joint and several liability. Each current member is jointly and severally liable for all liabilities and expenses of the pool. Each past member is jointly and severally liable for all liabilities and expenses of the pool during the pe…

2785.1500 FINANCIAL INTEGRITY. Subpart 1. Fidelity bond. All contractors and individuals who handle pool funds or who will have authority to gain access to pool funds, including board members, must be covered by a fidelity bond. The bond must cover losses from dishonesty, robbery…

2785.1600 REPORTING. Subpart 1. Financial statements. A pool must prepare annual financial statements containing a balance sheet; a statement of revenues, expenses, and surplus; a statement of changes in financial position; and a schedule of investments. The statements must be pr…