House Bill 1186

Chair's Name: Mike Coan

Committee: Industrial Relations

House Sponsor: Mike Coan

HB 1186 takes further steps to shut down the Subsequent Injury Trust Fund. First the bill caps annual assessments at $100 million. The administrator is authorized to create a reserve of surplus funds in order to ensure that sufficient funds are available leading up to the fund’s dissolution. Once all of the fund’s claims have been resolved and all costs have been paid, the insurers and self-insurers will be entitled to a pro rata refund of the remaining fund balance using the formula detailed in the bill. The board of trustees may also authorize a loss portfolio transfer of any unresolved claims.

This committee substitute comes to the Floor under the Open Rule.

Chairman Coan’s Opinion of the legislation:

This bill is needed to close down the Subsequent Injury Trust Fund (SITF) in an orderly manner. Assessments in 2007 were nearly 15%, which caused a hardship on those paying. The SITF board needed the legal ability to establish a reserve to pay off liabilities incurred by the fund. This bill will cap assessments at $100 million (which equates to about 7% assessments to businesses). Also, the bill will allow a loss portfolio transfer when it is cost effective to do so.

This Legislation:

•        Reduces the Size of Government by getting rid of the SITF.

•        Strengthens our Families by placing claims in Workers Compensation where they can be managed.

•        Reduces the Tax Burden on our Citizens by eventually allowing to pay only for Workers Compensation without the addition of SITF

•        Increases Personal Responsibility by allowing businesses to manage claims with more scrutiny in Workers Compensation, rather than SITF.