HOUSE BILL REPORT

SB 6297

As Amended by the House

BYSenators von Reichbauer, Moore, Kreidler and Johnson; by request of Department of Labor and Industries

Revising investment policies for funds of the department of labor and industries.

House Committe on Commerce & Labor

Majority Report:  Do pass with amendments.  (11)

      Signed by Representatives Wang, Chair; Cole, Vice Chair; Fisher, Jones, R. King, O'Brien, Patrick, Sanders, Sayan, C. Smith and Walker.

House Staff:Chris Cordes (786-7117)

AS PASSED HOUSE MARCH 4, 1988

BACKGROUND:

Since 1985, the State Investment Board has been authorized to invest industrial insurance trust funds in equity investments.  The board is charged with investing state funds to maximize return at a prudent level of risk.  Under present industrial insurance law and practice, large changes in the value of the trust fund assets can create significant fluctuations in the industrial insurance premiums that must be charged to employers.  Therefore, to avoid causing premium fluctuations, the funds have not been extensively invested in equity.

SUMMARY:

Until July 1, 1989, the State Investment Board is required to establish investments policies for the industrial insurance funds that are designed to limit fluctuations in industrial insurance premiums and, subject to this limitation, to maximize return at a prudent level of risk.

The board will prepare a report recommending changes in current investment policies.  The report will be presented to appropriate legislative committees at the start of the 1989 legislative session.

Appropriation:    $100,000 to the State Investment Board from the medical aid and accident funds of the industrial insurance funds.

Fiscal Note:      Requested February 25, 1988.

House Committee ‑ Testified For:    None Presented.

House Committee - Testified Against:      None Presented.

House Committee - Testimony For:    None Presented.

House Committee - Testimony Against:      None Presented.