71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
 
NOTE:  Matter within  { +  braces and plus signs + } in an
amended section is new. Matter within  { -  braces and minus
signs - } is existing law to be omitted. New sections are within
 { +  braces and plus signs + } .
 
LC 4256
 
                           B-Engrossed
 
                         House Bill 3980
                   Ordered by the House May 25
       Including House Amendments dated May 16 and May 25
 
Sponsored by Representative BATES; Representative GARDNER
 
 
                             SUMMARY
 
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure.
 
    { - Establishes Examination and Accountability Commission to
review Industrial Accident Fund. Provides that expenses of
commission be paid from moneys appropriated for expenses of State
Treasurer. Provides that State Treasurer shall be reimbursed from
Industrial Accident Fund. - }
    { - Sunsets commission January 2, 2008. - }
    { - Declares emergency, effective on passage. - }  { +
  Requires Secretary of State to conduct annual audit of State
Accident Insurance Fund Corporation and Industrial Accident Fund.
Requires Secretary of State to contract with firm qualified to do
independent actuarial review. Specifies certain contents of audit
and standards for audit. Requires State Accident Insurance Fund
Corporation to pay cost of audit. + }
 
                        A BILL FOR AN ACT
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. + }
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