Senate Bill 2010

(COMMITTEE SUBSTITUTE)

AN ACT TO AMEND SECTIONS 11-46-20, 19-7-7 AND 37-7-303, MISSISSIPPI CODE OF 1972, TO AUTHORIZE THE COMMISSIONER OF INSURANCE TO CONDUCT AN EXAMINATION OF CERTAIN SELF-INSURANCE PROGRAMS PROVIDING COVERAGE TO GOVERNMENTAL ENTITIES; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. Section 11-46-20, Mississippi Code of 1972, is amended as follows:

11-46-20. (1) The Tort Claims Board shall be charged with the responsibility to regulate all liability coverage of governmental entities required to have certificates of coverage under this chapter which elect to provide the same through a public entity group or individual self-insurance program. This regulation shall be accomplished through an initial approval as provided in Section 11-46-17 and by ongoing or annual review. Each self-insurance program shall annually submit to the Tort Claims Board the following items within ninety (90) days from the end of the group year:

(a) An audited financial statement;

(b) An actuarial valuation;

(d) Excess insurance policies;

(e) A list of members and premiums due from and collected from each member; and

(f) Other data as may be required by the Tort Claims Board.

(2) Areas of regulation under this section shall include, but not be limited to, the following:

(a) Financial solvency;

(b) Rating plans, rates and rating basis;

(d) Coverages offered and excluded;

(e) Deductibles and deductible credits;

(f) Proper purchase of excess insurance or reinsurance; and

(g) Review of losses, reserves and expenses annually.

(3) Individual self-insurers and group public entity self-insurers must provide the data requested for the purposes of this section in order to receive continuing approval of the Tort Claims Board and issuance of annual certificates of coverage to the governmental entities involved.

(4) The Tort Claims Board is authorized to assess and charge appropriate fees for the costs of regulation, as determined by the board, to the individual self-insurers and group public entity self-insurers being regulated.

(5) The Tort Claims Board is empowered to:

(a) Issue cease and desist orders;

(b) Require rate increases or decreases;

(c) Require assessments of members of group public entity self-insurers in such amounts as are authorized and required by the board;

(d) Require changes in excess insurance or reinsurance; or

(e) Take such other actions as deemed necessary by the board to carry out the provisions of this chapter.

(6) The Commissioner of Insurance, or any examiner he may appoint, shall have the power to examine the affairs of any such self-insurance program. The examination shall be conducted in accordance with the provisions of Section 83-5-201 et seq. The Commissioner of Insurance, or any examiner he may appoint, shall have free access to all the audited financial statements and actuarial reports that relate to the self-insurance program. The expenses of the examination shall be paid by the self-insurance program examined, upon statement furnished by the Commissioner of Insurance, and the examination shall be made at least once every five (5) years, but no more than once in any twelve-month period. Upon receipt of the verified report from the examiner, the Commissioner of Insurance shall transmit the report to the self-insured program examined, together with a notice which shall afford the self-insured program examined a reasonable opportunity of not more than thirty (30) days to make a written submission or rebuttal with respect to any matters contained in the examination report. A copy of the final Report of Examination shall be furnished to the Executive Director of the Tort Claims Board.

(7) Any person selling, soliciting or negotiating a self-insurance program under this section shall be licensed as an insurance producer pursuant to the provisions of Section 83-17-1 et seq., and such producer shall fully advise any prospective public entity participant the policy and procedures for member assessment adjustments and dividends provided by the self-insurance program.

(8) Upon request, individual self-insurers and group public entity self-insurers must provide to any public entity that receives a quote, a copy of their most recent audited financial statement referenced in subsection (1)(a) of this section.

SECTION 2. Section 19-7-7, Mississippi Code of 1972, is amended as follows:

19-7-7. The board of supervisors may have the courthouse, jail and other buildings of the county, the furniture thereof, the books of the county, and the personal property of the county, insured against loss by fire, cyclone and tornado, and other hazards. The board of supervisors may carry steam boiler, plate glass and other miscellaneous casualty insurance against loss of county property, as in the discretion of the board of supervisors may seem proper. The cost thereof shall be paid out of the county treasury.

The boards of supervisors of two (2) or more counties may pool their risks under this section and may provide for the purchase of one or more policies of property insurance, or the establishment of a self-insurance fund or self-insurance reserves, or any combination thereof. The cost of participation shall be paid out of the general fund of the county. The administration and service of any such self-insurance program shall be contracted to a third party and approved by the Commissioner of Insurance. The Commissioner of Insurance, or any examiner he may appoint, shall have the power to examine the affairs of any such self-insurance program. The examination shall be conducted in accordance with the provisions of Section 83-5-201 et seq. The Commissioner of Insurance, or any examiner he may appoint, shall have free access to all the audited financial statements and actuarial reports that relate to the self-insurance program. The expenses of the examination shall be paid by the self-insurance program examined, upon statement furnished by the Commissioner of Insurance, and the examination shall be made at least once every five (5) years, but no more than once in any twelve-month period. Upon receipt of the verified report from the examiner, the Commissioner of Insurance shall transmit the report to the self-insured program examined, together with a notice which shall afford the self-insured program examined a reasonable opportunity of not more than thirty (30) days to make a written submission or rebuttal with respect to any matters contained in the examination report.

Any person selling, soliciting or negotiating a self-insurance program under this section shall be licensed as an insurance producer pursuant to the provisions of Section 83-17-1 et seq., and such producer shall fully advise any prospective county participant the policy and procedures for member assessment adjustments and dividends provided by the self-insurance program.

SECTION 3. Section 37-7-303, Mississippi Code of 1972, is amended as follows:

37-7-303. (1) The school board of any school district may insure motor vehicles for any hazard that the board may choose, and shall insure the school buildings, equipment and other school property of the district against any and all hazards that the board may deem necessary to provide insurance against. In addition, the local school board of any school district shall purchase and maintain business property insurance and business personal property insurance on all school district-owned buildings and/or contents as required by federal law and regulations of the Federal Emergency Management Agency (FEMA) as is necessary for receiving public assistance or reimbursement for repair, reconstruction, replacement or other damage to those buildings and/or contents caused by the Hurricane Katrina Disaster of 2005 or subsequent disasters. The school district is authorized to expend funds from any available source for the purpose of obtaining and maintaining that property insurance. The school district is authorized to enter into agreements with the Department of Finance and Administration, other local school districts, community/junior college districts, state institutions of higher learning, community hospitals and/or other state agencies to pool their liabilities to participate in a group business property and/or business personal property insurance program, subject to uniform rules and regulations as may be adopted by the Department of Finance and Administration. Such school board shall be authorized to contract for such insurance for a term of not exceeding five (5) years and to obligate the district for the payment of the premiums thereon. When necessary, the school board is authorized and empowered, in its discretion, to borrow money payable in annual installments for a period of not exceeding five (5) years at a rate of interest not exceeding eight percent (8%) per annum to provide funds to pay such insurance premiums. The money so borrowed and the interest thereon shall be payable from any school funds of the district other than minimum education program funds. The school boards of school districts are further authorized and empowered, in all cases where same may be necessary, to bring and maintain suits and other actions in any court of competent jurisdiction for the purpose of collecting the proceeds of insurance policies issued upon the property of such school district.

(2) Two (2) or more school districts, together with other educational entities or agencies, may agree to pool their liabilities to participate in a group workers' compensation program. The governing authorities of any school board or other educational entity or agency may authorize the organization and operation of, or the participation in such a group self-insurance program with other school boards and educational entities or agencies, subject to the requirements of Section 71-3-5. The Workers' Compensation Commission shall approve such group self-insurance programs subject to uniform rules and regulations as may be adopted by the commission applicable to all groups.

(3) The Commissioner of Insurance, or any examiner he may appoint, shall have the power to examine the affairs of any self-insurance program established under subsection (1) of this section. The examination shall be conducted in accordance with the provisions of Section 83-5-201 et seq. The Commissioner of Insurance, or any examiner he may appoint, shall have free access to all the audited financial statements and actuarial reports that relate to the self-insurance program. The expenses of the examination shall be paid by the self-insurance program examined, upon statement furnished by the Commissioner of Insurance, and the examination shall be made at least once every five (5) years, but no more than once in any twelve-month period. Upon receipt of the verified report from the examiner, the Commissioner of Insurance shall transmit the report to the self-insured program examined, together with a notice which shall afford the self-insured program examined a reasonable opportunity of not more than thirty (30) days to make a written submission or rebuttal with respect to any matters contained in the examination report.

(4) Any person selling, soliciting or negotiating a self-insurance program under subsection (1) of this section shall be licensed as an insurance producer pursuant to the provisions of Section 83-17-1 et seq., and such producer shall fully advise any prospective school district participant or other participant the policy and procedures for member assessment adjustments and dividends provided by the self-insurance program.

SECTION 4. This act shall take effect and be in force from and after its passage.