Sec. 1. 39-A MRSA §403, sub-§8, ķA, as amended by PL 1995, c. 594, §4, is repealed and the following enacted in its place:

A. Each individual self-insurer shall post a bond, security deposit or letter of credit in an amount that, except as otherwise provided in this paragraph, is no less than the loss and loss adjustment expense portion of the annual standard premium, as defined in section 404, subsection 4, paragraph E, for the prospective fiscal coverage period plus outstanding incurred liabilities minus recoveries from all reinsurance and subrogation reduced to net collections.__ Outstanding incurred liabilities for an individual self- insurer must be developed to ultimate from a current actuarial evaluation of undischarged claims and claims settlement liabilities performed by a casualty actuary who is a member of the American Academy of Actuaries or its successor organization, except that if a current actuarial evaluation is not available the outstanding incurred liabilities may be developed from current case reserves by applying the ratio of ultimate loss and claim settlement reserves to current loss and claim settlement reserves from the most recent actuarial evaluation.

(1)__A self-insurer's minimum required security level may not be less than $50,000.

(2)__The minimum required security level for a self- insurer with consistently reported outstanding case reserves less than $500,000 is 25% of the annual standard premium for the prospective fiscal coverage period, plus outstanding incurred liabilities, minus recoveries from all reinsurance and subrogation reduced to net collections.__Outstanding incurred liabilities may be estimated by applying a development ratio of 2.5 to current case reserves.

(3)__An individual self-insurer may reduce its minimum required security level by an amount not to exceed the self-insurer's demonstrated working capital, as determined by the Superintendent of Insurance on the basis of a current audited statement of financial condition, as long as:

(a)__The self-insurer has a tangible net worth equal to or in excess of $10,000,000;

(b)__The self-insurer has had positive net earnings demonstrated by certified statements of