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SUBSTITUTE
SENATE BILL 5342
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AS
AMENDED BY THE HOUSE
Passed
Legislature - 1992 Regular Session
State
of Washington 52nd Legislature 1991 Regular Session
Read
first time March 5, 1991.Authorizing payment
by annuity by self-insured employers.
AN ACT
Relating to payment by annuity by self-insured employers; and amending RCW
51.44.070.
BE IT
ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec.
1. RCW
51.44.070 and 1989 c 190 s 1 are each amended to read as follows:
(1)
For every case resulting in death or permanent total disability the department
shall transfer on its books from the accident fund of the proper class and/or
appropriate account to the "reserve fund" a sum of money for that
case equal to the estimated present cash value of the monthly payments provided
for it, to be calculated upon the basis of an annuity covering the payments in
this title provided to be made for the case. Such annuity values shall be
based upon rates of mortality, disability, remarriage, and interest as
determined by the department, taking into account the experience of the reserve
fund in such respects.
Similarly,
a self-insurer in these circumstances shall pay into the reserve fund a sum of
money computed in the same manner, and the disbursements therefrom shall be
made as in other cases.
(2) As
an alternative to payment procedures otherwise provided under law, in the event
of death or permanent total disability to workers of self-insured employers, a
self-insured employer may upon establishment of such obligation file with the
department a bond, ((or)) an assignment of account from a federally or
state chartered commercial banking institution authorized to conduct business
in the state of Washington, or purchase an annuity, in an amount deemed
by the department to be reasonably sufficient to insure payment of the pension
benefits provided by law. Any purchase of an annuity shall be from an
institution meeting the following minimum requirements: (a) The institution
must be rated no less than "A+" by A.M. Best, and no less than
"AA" by Moody's and by Standard & Poor's; (b) the value of the
assets of the institution must not be less than ten billion dollars; (c) not
more than ten percent of the institution's assets may include bonds that are
rated less than "BBB" by Moody's and Standard & Poor's; (d) not
more than five percent of the assets may be held as equity in real estate; and
(e) not more than twenty-five percent of the assets may be first mortgages, and
not more than five percent may be second mortgages. The department shall
adopt rules governing assignments of account and annuities. Such rules
shall ensure that the funds are available if needed, even in the case of
failure of the banking institution, the institution authorized to provide
annuities, or ((of)) the employer's business.
The
annuity value for every such case shall be determined by the department based
upon the department's experience as to rates of mortality, disability,
remarriage, and interest. The amount of the required bond ((or)),
assignment of account, or annuity may be reviewed and adjusted
periodically by the department, based upon periodic redeterminations by the
department as to the outstanding annuity value for the case.
Under
such alternative, the department shall ((make the monthly payments from the
pension reserve fund for the benefits provided for by RCW 51.32.050 and
51.32.060 to the self-insured beneficiary or beneficiaries and the department
shall be reimbursed for all such payments from the particular self-insured
employer through periodic charges not less than quarterly in a manner to be
determined by the director.
Any
self-insured employer electing this alternative method of providing for payment)) administer
the payment of this obligation to the beneficiary or beneficiaries. The
department shall be reimbursed for all such payments from the self-insured
employer through periodic charges not less than quarterly in a manner to be
determined by the director. The self-insured employer shall additionally
pay to the department a deposit equal to the first three months' payments
otherwise required under RCW 51.32.050 and 51.32.060. Such deposit shall be
placed in the reserve fund in accordance with RCW 51.44.140 and shall be
returned to the respective self-insured employer when monthly payments are no
longer required for such particular obligation.
If a
self-insurer delays or refuses to reimburse the department beyond fifteen days
after the reimbursement charges become due, there shall be a penalty paid by
the self-insurer upon order of the director of an additional amount equal to
twenty-five percent of the amount then due which shall be paid into the pension
reserve fund. Such an order shall conform to the requirements of RCW
51.52.050.
