Senate Bill 86 to establish regulatory authority for group self-insured funds
Frankfort, KY: Governor Ernie Fletcher commended the General Assembly for passage of Senate Bill 86; legislation that will establish stricter reporting standards and oversight of the group self-insured funds. The bill passed out of the House today after passing out of the Senate on February 14th. It will now be sent to Governor Fletcher for his signature.
“I applaud the legislators for their leadership on the quick passage of this important bill,” said Governor Fletcher. “These changes to the oversight of group self-insured funds are vital to protecting injured workers in Kentucky. Furthermore, the changes will allow us to maintain a higher level of accountability in this segment of the workers’ compensation market.”
SB 86 allows the Office of Insurance to license these funds, review their rates, underwrite guidelines and evidence of coverage, as well as to monitor financial solvency.
“This important legislation will ensure oversights are in place to protect injured workers in Kentucky. Without these safeguards, programs designed to protect our workers could be rendered virtually useless and I am confident the General Assembly will not let that happen,” said Senate Majority Floor Leader Dan Kelly (R-Springfield). Senator Kelly sponsored the bill. Representative Steven Riggs, D-Louisville, helped to steer the bill to passage in the House.
SB 86 also confirmed an earlier executive order transferring regulatory oversight of these group self-insured funds from the Office of Workers’ Claims to the Office of Insurance. It will authorize the Commissioner of the Department of Insurance to permit 20 or more employers with common interests to insure their liability under KRS Chapter 342. SB 86 also permits the commissioner to govern creation, admission, certification, and regulation of self-insured groups. The earlier executive order was in response to issues brought to light when AIK Comp, one of these self-insured group funds, reported a $40 million shortfall last summer. The actual deficit is at least $58.5 million.