Sec. 1. 39-A MRSA §403, sub-§8, ķA, as repealed and replaced by PL 2001, c. 224, §1, is amended by enacting a new subparagraph (4-A) to read:

(4-A) An individual self-insurer that is a public utility as defined in Title 35-A, section 102, subsection 13 with an investment grade credit rating may reduce its required security level by up to $10,000,000, as long as:

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

(b)__The self-insured public utility has had positive net earnings demonstrated by certified statements of financial condition audited by a certified public accountant for at least 3 of the 5 latest fiscal years, including one of the 2 most recent years, and its mean annual earnings for the 5 latest fiscal years are at least equal to the normal annual premium for the prospective fiscal coverage period, or it was eligible to make an alternative election, under Statement of Financial Accounting Standard No. 106, Employers' Accounting for Postretirement Benefits Other Than Pensions, that would have otherwise satisfied these earnings requirements; and

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

SUMMARY

This bill allows a public utility to reduce its security for self-insuring its workers' compensation obligations in a manner similar to that used by other companies with working capital offsets.