Chapter 724 Oregon Laws 2001
AN ACT
HB 3980
Relating to the Industrial
Accident Fund.
Be It Enacted by the People of the State of Oregon:
SECTION 1.
(1)(a) The Secretary of State shall
conduct an annual audit of the State Accident Insurance Fund Corporation and
the Industrial Accident Fund pursuant to ORS 297.210. As part of this audit,
the Secretary of State shall contract with a firm qualified to perform an
independent actuarial review.
(b) The firm conducting
the review required by paragraph (a) of this subsection shall be familiar with
the accounting standards applicable to the reserves under review, shall meet
all appropriate standards of practice established by the Casualty Actuarial
Society, shall employ a staff that includes no fewer than three people who have
attained fellowship in the Casualty Actuarial Society and shall maintain limits
of errors and omission insurance as prescribed by the Secretary of State.
(c) The Secretary of
State shall determine the scope of the review required by paragraph (a) of this
subsection, which shall include, but is not limited to:
(A) A review of the
sources and uses of the moneys in the Industrial Accident Fund;
(B) A reconciliation of
changes in actuarial assumptions and reserve values from the prior year;
(C) An examination of
the development of claim reserve inadequacies or redundancies over time;
(D) An assessment of the
future financial viability of the Industrial Accident Fund; and
(E) An evaluation of
losses and loss adjustment expense reserves discounted by a rate determined by
the Director of the Department of Consumer and Business Services that is
consistent with discount rates generally applied by insurers authorized to
underwrite workers’ compensation insurance in Oregon.
(d) The State Accident
Insurance Fund Corporation shall cooperate with the actuarial firm in all
respects and shall permit the firm full access to all information the firm
deems necessary for a true and complete review. Information provided to the
actuarial firm conducting the annual review is subject to the same limitations
on public inspections as required for the records of the State Accident
Insurance Fund Corporation.
(e) The audit required
by paragraph (a) of this subsection shall be conducted using both generally
accepted accounting principles and the statutory accounting principles
published by the National Association of Insurance Commissioners.
(f) The cost of the
audit required by paragraph (a) of this subsection shall be paid by the State
Accident Insurance Fund Corporation.
(2) The Secretary of
State shall issue an annual report to the Governor, the President of the Senate
and the Speaker of the House of Representatives on the results of the audit and
review. The audit and the report of the review performed by the independent
actuarial firm shall be available for public inspection, in accordance with the
Secretary of State’s established rules and procedures governing public
disclosure of audit documents.
SECTION 2.
The board of directors of the State
Accident Insurance Fund Corporation shall report to the Secretary of State by
March 15 of each year:
(1) The total amount of
assets in the Industrial Accident Fund as of December 31 of the prior year;
(2) The reserves and
surplus that are actuarially necessary according to recognized insurance
principles as described in ORS 656.634 (2) and statutory accounting principles
published by the National Association of Insurance Commissioners, excluding any
allowance for undeclared dividends;
(3) Any funds in
addition to those described in subsection (2) of this section; and
(4) The total amount of
investment gain generated by the Industrial Accident Fund during the prior year
ending on December 31.
Approved by the Governor
July 3, 2001
Filed in the office of
Secretary of State July 3, 2001
Effective date January 1,
2002
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