(c)__The reduction does not exceed $10,000,000 and does not reduce the minimum required security level below $100,000; and

(d)__The self-insurer is not organized as a sole proprietorship, partnership or limited liability company, except that the superintendent may authorize a limited liability company to deduct demonstrated working capital from its minimum required security level by rules adopted under this section.__Rules adopted pursuant to this section are routine technical rules pursuant to Title 5, chapter 375, subchapter II-A.

(4) With the superintendent's approval, affiliated individual self-insurers may post security on a consolidated basis.

Within 30 days after receiving notice from the superintendent, the self-insurer shall post the required bond, security deposit or letter of credit.__This deadline may be extended by the superintendent for good cause, but may not exceed one year from the deadline for compliance as stated in the notice given to the self-insurer.

A bond, security deposit or letter of credit in excess of the amount prescribed by this subsection may be required if the superintendent determines that the self-insurer has experienced a deterioration in financial condition that adversely affects the self-insurer's ability to pay expected losses.

A judgment creditor other than a claimant for benefits under this Act does not have a right to levy upon the self- insurer's assets held in deposit pursuant to this paragraph.

Sec. 2. 39-A MRSA §404, sub-§4, ¶D, as enacted by PL 1991, c. 885, Pt. A, §8 and affected by §§9 to 11, is amended to read:

D. No An individual self-insurer may not be assessed in any calendar year an amount greater than 2.5% of the annual standard premium that would have been paid by that self- insurer during the prior calendar year. No A group self- insurer may not be assessed in any calendar year an amount greater than .25% of the total annual standard premium that would have been paid by all the members of that group self- insurer during the prior calendar year. If the maximum assessment does not provide in any one year an amount sufficient to make all necessary payments, the funds available must be prorated and the unpaid portion must be paid as soon thereafter as funds become available. If the association exhausts its financial resources, the caps in this paragraph and paragraph C do not apply, and individual and group self-insurers must be assessed proportionately in the same manner as provided in paragraph C.

There must be established in the plan of operations a mechanism to calculate the assessments required by this section by a simple and equitable means to convert from any policy or fund years year that are is different from a calendar year.

SUMMARY

This bill changes the security and assessment provisions for self-insured employers in order to address financial risks currently borne by injured workers and self-insured employers as a result of the current structure of the Maine Self-Insurance Guarantee Association assessment mechanism.

It changes the basis for calculating the minimum security requirements to an actuarially determined liability in place of the case reserves that are used under current law and limits the unsecured liability that may be authorized under the working capital offset to $10,000,000, a level equal to 5 times the Maine Self-Insurance Guarantee Association funding cap. The bill also authorizes the Maine Self-Insurance Guarantee Association to levy assessments in excess of the otherwise-applicable limits when necessary to avoid a default in benefit payments to injured workers.