LD 346
pg. 2
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LR 1503
Item 1

 
Sec. 2. 39-A MRSA §403, sub-§3, śC, as amended by PL 1995, c. 619, §7, is
further amended to read:

 
C. A self-insurer may establish an actuarially determined
fully funded trust, funded at a level sufficient to
discharge those obligations incurred by the employer
pursuant to this Act as they become due and payable from
time to time, as long as the Superintendent of Insurance
requires that the value of trust assets be at least equal to
the present value of ultimate expected incurred claims and
claims settlement costs, plus required safety margins and,
if determined necessary by the superintendent,
administrative costs for the operation of the plan of self-
insurance. For the purpose of determining whether an
actuarially determined fully funded trust has a surplus of
funds in excess of that required by this subsection, the
superintendent shall consider, based upon the group's audit
for all completed plan years, only the following assets held
outside the trust account: cash up to $10,000; accounts
receivable, limited to amounts collected and deposited in
the trust account by the date of the surplus distribution;
accrued interest on trust account assets that will be
collected and deposited in the trust account within 6 months
from the date of the surplus determination; tangible assets
that will be converted to cash and deposited in the trust
account prior to the distribution date of any surplus; and a
letter of credit to be used to partially fund the trust to
the extent allowed under this section and rules adopted by
the superintendent, as supported in the actuarial review.
The superintendent shall consider cash held outside the
trust account in excess of $10,000 if the self-insurer
provides, to the superintendent's satisfaction,
documentation regarding why the money is being held outside
the trust account. An actuarially determined fully funded
trust must be funded as follows, as determined by the
superintendent.

 
(1) For individual and group self-insurers, the amount
of security must be determined based upon an actuarial
review. The actuarial review must take into
consideration the use by a group self-insurer of any
irrevocable standby letter of credit. Except as
provided in subparagraph (3), initial funding for each
plan year must be maintained at the 90% or higher
confidence level. Funding after the completion of the
initial plan year may be established no lower than the
75% confidence level if the following has occurred:

 
(a) A year considered for reduction is completed;


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