SENATE BILL No. 718

October 17, 2001, Introduced by Senator BULLARD and referred to the Committee on Financial Services.

A bill to amend 1969 PA 317, entitled

"Worker's disability compensation act of 1969,"

by amending section 551 (MCL 418.551), as amended by 1992

PA 269.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

1 Sec. 551. (1) As soon as practicable after January 1 OF

2 each year, the director shall assess PURSUANT TO SUBSECTION (3)

3 upon and collect from each SELF-INSURED EMPLOYER AND EACH

4 INSURED EMPLOYER'S carrier a sum THAT IN TOTAL IS equal to that

5 proportion of 175% of the total disbursements made from the

6 second injury fund during the preceding calendar year, less the

7 amount of net assets in excess of $200,000.00 in that fund as of

8 December 31 of the preceding calendar year. The assessment

9 shall bear the same relationship that the total compensation

10 benefits, exclusive of payments made pursuant to sections 315,

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1 319, and 345, paid by each carrier in the state bears to the

2 total compensation benefits paid by all carriers in the state.

3 (2) As soon as practicable after January 1 OF each year, the

4 director shall assess PURSUANT TO SUBSECTION (3) upon and col-

5 lect from each SELF-INSURED EMPLOYER AND EACH INSURED EMPLOYER'S

6 carrier a sum THAT IN TOTAL IS equal to that proportion of 175%

7 of the total disbursements made from the silicosis, dust disease,

8 and logging industry compensation fund during the preceding cal-

9 endar year, less the amount of net assets in excess of

10 $200,000.00 in that fund as of December 31 of the preceding cal-

11 endar year. The assessment shall bear the same relationship

12 that the total compensation benefits, exclusive of payments made

13 pursuant to sections 315, 319, and 345, paid by each carrier in

14 the state bears to the total of compensation benefits paid by all

15 carriers in the state.

16 (3) THE PORTION OF THE TOTAL ASSESSMENT AMOUNTS UNDER

17 SUBSECTIONS (1) AND (2) ALLOCATED TO SELF-INSURED EMPLOYERS SHALL

18 BE EQUAL TO A PERCENTAGE DETERMINED AS FOLLOWS: THE TOTAL PAID

19 LOSSES OF ALL SELF-INSURED EMPLOYERS FOR THE PRECEDING CALENDAR

20 YEAR DIVIDED BY THE TOTAL PAID LOSSES OF ALL SELF-INSURED EMPLOY-

21 ERS AND INSURED EMPLOYERS' CARRIERS DURING THE PRECEDING CALENDAR

22 YEAR. THE PORTION OF THE TOTAL ASSESSMENT AMOUNTS UNDER

23 SUBSECTIONS (1) AND (2) ALLOCATED TO INSURED EMPLOYERS' CARRIERS

24 SHALL BE EQUAL TO A PERCENTAGE DETERMINED AS FOLLOWS: THE TOTAL

25 PAID LOSSES OF ALL INSURED EMPLOYERS' CARRIERS FOR THE PRECEDING

26 CALENDAR YEAR DIVIDED BY THE TOTAL PAID LOSSES OF ALL

27 SELF-INSURED EMPLOYERS AND INSURED EMPLOYERS' CARRIERS DURING THE

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1 PRECEDING CALENDAR YEAR. THE PORTION OF THE TOTAL ASSESSMENTS

2 ALLOCATED TO SELF-INSURED EMPLOYERS THAT SHALL BE COLLECTED FROM

3 EACH SELF-INSURED EMPLOYER SHALL BE EQUAL TO A PERCENTAGE DETER-

4 MINED AS FOLLOWS: THE TOTAL PAID LOSSES OF EACH SELF-INSURED

5 EMPLOYER DIVIDED BY THE TOTAL PAID LOSSES OF ALL SELF-INSURED

6 EMPLOYERS DURING THE PRECEDING CALENDAR YEAR. THE PORTION OF THE

7 TOTAL ASSESSMENT ALLOCATED TO INSURED EMPLOYERS' CARRIERS THAT

8 SHALL BE COLLECTED FROM EACH INSURED EMPLOYER'S CARRIER SHALL BE

9 EQUAL TO A PERCENTAGE DETERMINED AS FOLLOWS: THE AMOUNT OF TOTAL

10 DIRECT PREMIUMS WRITTEN AS REPORTED BY EACH INSURED EMPLOYER'S

11 CARRIER DIVIDED BY THE AMOUNT OF TOTAL DIRECT PREMIUMS WRITTEN AS

12 REPORTED BY ALL INSURED EMPLOYERS' CARRIERS DURING THE PRECEDING

13 CALENDAR YEAR. AS USED IN THIS SUBSECTION:

14 (i) "DIRECT PREMIUMS WRITTEN" MEANS WORKERS' COMPENSATION

15 PREMIUMS WRITTEN IN MICHIGAN PLUS REIMBURSEMENTS FROM INSUREDS ON

16 LARGE DEDUCTIBLE POLICIES.

17 (ii) "TOTAL PAID LOSSES" MEANS TOTAL COMPENSATION BENEFITS

18 PAID UNDER THIS ACT, EXCLUSIVE OF PAYMENTS MADE PURSUANT TO SEC-

19 TIONS 315, 319, AND 345.

20 (4) (3) The director shall assess upon and collect from

21 each private self-insurer an amount based on the total compensa-

22 tion the self-insurer paid in the preceding year exclusive of

23 payments made pursuant to sections 315, 319, and 345. The direc-

24 tor, upon the advice of the trustee representing the

25 self-insurers, may make additional assessments UPON SELF-INSURED

26 EMPLOYERS as the trustee considers necessary to keep the

27 self-insurers' security fund solvent. The assessment shall not

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1 exceed 3% in any calendar year exclusive of payments made

2 pursuant to sections 315, 319, and 345.

3 (5) (4) Notice of the assessments shall be sent by the

4 director by first class mail to each carrier. Payment of assess-

5 ments shall be made so as to be received in the Lansing office of

6 the bureau on or before a date specified uniformly in the notice,

7 but not less than 90 days after the date of mailing.

8 (6) (5) All assessments constitute elements of loss for

9 the purpose of establishing rates for worker's compensation

10 insurance.

11 (7) (6) An employer who has ceased to be STOPPED BEING a

12 self-insurer or an insurance company which has ceased to write

13 worker's compensation insurance in this state shall continue to

14 be liable for a second injury fund; silicosis, dust disease, and

15 logging industry compensation fund; or self-insurers' security

16 fund assessment on account of any compensation benefits, exclu-

17 sive of payments made pursuant to sections 315, 319, and 345,

18 paid by the employer or insurance company during the previous

19 calendar year.

20 (8) (7) The director shall certify to the trustees the

21 collection and receipt of all money from assessments, noting any

22 delinquencies. The trustees shall immediately notify delinquent

23 carriers, including private self-insurers, of their delinquency

24 in writing by certified mail, return receipt requested. The

25 trustees shall take action as in their judgment is proper to

26 effect collection of any delinquent assessment. All money

27 received from assessments pursuant to UNDER this section shall

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1 be turned over to the state treasurer who shall be the custodian

2 of the self-insurers' security fund; the second injury fund; and

3 the silicosis, dust disease, and logging industry compensation

4 fund. The treasurer may make those investments as in the

5 treasurer's judgment are in the best interest of the funds. The

6 earnings from the investment of the money from the funds shall be

7 credited to the funds. The state treasurer, at the end of each

8 fiscal year, shall determine what amount represents a pro rata

9 earnings share due to each fund, shall credit the pro rata earn-

10 ing share to each fund, and shall notify the trustee of the

11 amount credited and the balance of the respective fund as of

12 September 30. The trustees shall make separate annual reports

13 and accountings for each fund, which reports shall be included in

14 the annual report of the bureau.

15 Enacting section 1. This amendatory act takes effect

16 January 1, 2002.

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