Assessments

The Minnesota Self-Insurers' Security Fund assess its members on an as needed basis. The governing statute is:

Minn. Stat. §79A.12, Subd. 5 (b) Assessment

The security fund may assess each of its members a pro rata share of the funding necessary to carry out its obligation and the purposes of this chapter. Total annual assessments in any calendar year shall not exceed ten percent of paid indemnity losses, as defined in section 176.129, made by the self-insured employer during the preceding calendar year. The annual assessment calculation shall not include supplementary benefits paid which will be reimbursed by the special compensation fund. Funds obtained by assessments pursuant to this subdivision may only be used for the purposes of this chapter. The trustees shall certify to the commissioner the collection and receipt of all money from assessments, noting any delinquencies. The trustees shall take any action deemed appropriate to collect any delinquent assessments.

This assessment is the same amount which is reported annually to the Special Compensation Fund of the Minnesota Department of Labor & Industry.

Exit Assessments

All members who terminate their self-insurance authority must pay an exit assessment.

The exit assessment is governed by Minn. Stat. §79A.06, Subd. 6 (b), which is in part as follows:

Minn. Stat. §79A.12, Subd. 5 (b)

(b) ….With respect to a self-insurer who terminates its self-insurance authority after April 1, 1998, that member shall obtain and file with the commissioner an actuarial opinion of its outstanding liabilities as determined by an associate or fellow of the Casualty Actuarial Society within 120 days of the date of its termination. If the actuarial opinion is not timely filed, the self-insurers' security fund may, at its discretion, engage the services of an actuary for this purpose. The expense of this actuarial opinion must be assessed against and be the obligation of the self-insurer. The commissioner may issue a certificate of default against the self-insurer for failure to pay this assessment to the self-insurers' security fund as provided by section 79A.04, subdivision 9. The opinion may discount liabilities up to four percent per annum to net present value. Within 60 days after notification of approval of the actuarial opinion by the commissioner, the exiting member shall pay to the security fund an amount determined as follows: a percentage will be determined by dividing the security fund's members' deficit as determined by the most recent audited financial statement of the security fund by the total actuarial liability of all members of the security fund as calculated by the commissioner within 30 days of the exit date of the member. This quotient will then be multiplied by that exiting member's total future liability as contained in the exiting member's actuarial opinion. If the payment is not made within 30 days of the notification, interest on it at the rate prescribed by section 549.09 must be paid by the former member to the security fund until the principal amount is paid in full.

This formula may be stated as follows:

The security funds' members' deficit (Audited Financial Statement) divided by the total actuarial liability of all members (Commissioner's determination) times the exiting member's total future liability (Actuarial Report).

Buyout Assessments (Former Members)

A former member who terminated self-insurance authority before April 1, 1998, may buyout of the Minnesota Self-Insurers' Security Fund pursuant to Minn. Stat. §79A.06, Subd. 5 (c), which is a follows:

Minn. Stat. §79A.06, Subd. 5 (c)

(c) A former member who terminated its self-insurance authority before April 1, 1998, who has paid assessments to the self-insurers' security fund for seven years, and whose annualized assessment is $15,000 or less, may buy out of its outstanding liabilities to the self-insurers' security fund by an amount calculated as follows: 1.35 multiplied by the indemnity case reserves at the time of the calculation, multiplied by the then current self-insurers' security fund annualized assessment rate.

See Past Assessments for the current annualized assessment rate.

 

   
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