SB 420 Modifies the operation and maintenance of the second injury fund
Sponsor: Mayer
LR Number: 0612S.03C Fiscal Note: 0612-03N.ORG
Committee: Small Business, Insurance and Industry
Last Action: 5/13/2011 - S Informal Calendar S Bills for Perfection--SB 420-Mayer, with SCS Journal Page:
Title: SCS SB 420 Calendar Position:
Effective Date: August 28, 2011

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Current Bill Summary


SCS/SB 420 - This act modifies the operation and maintenance of the second injury fund.

No new claims shall be filed against the second injury fund for injuries occurring after July 1, 2011 and injuries after that time will be adjudicated under the workers' compensation system.

Only awards for claims for injuries prior to July 1, 2011 and medical bills incurred relating to injuries occurring before July 1, 2011 shall be paid by the fund.

The Treasurer, with the advice and consent of the Attorney General, is authorized to enter into compromise settlements in any amount not to exceed the total sum of 100 weeks of the employee's total average weekly wage as of the date of the injury and with dependents of claimants arising from the Schoemehl decision.

Under the act, an annual actuarial study shall be made taking into consideration any existing balance carried forward in the fund from a previous year until there are no fund liabilities.

The act establishes priority for paying liability of the fund in the following order:

1. Expenses related to the legal defense of the fund.

2. Permanent total disability awards in the order settled or finally adjudicated.

3. Permanent partial disability awards in the order settled or finally adjudicated.

4. Medical expenses incurred prior to July 1, 2011.

The Director of the Division of Workers' Compensation shall transfer funds from the workers' compensation fund to the second injury fund to ensure solvency of the fund for the remainder of the fiscal year to be repaid on or before July 1, 2012. The funds to repay the transfer shall be collected with a supplemental surcharge during fiscal year 2012 and calculated in a similar fashion as the second injury fund surcharge is currently calculated. Notice shall be given to policyholders and self-insurers of the surcharge percentages to be imposed in 2011 and 2012.

If the fund is anticipated to be insolvent, the Director of the Division of Workers' Compensation shall determine the amount of revenue to maintain solvency and the funds shall be collected with a supplemental surcharge calculated in a similar fashion as the second injury fund surcharge is currently calculated.

The Attorney General shall reduce staff defending the second injury fund as appropriate.

This act contains an emergency clause.

This act is similar to SB 66 (2007), SB 606 (2007), SB 668 (2007), and SB 417 (2011).

CHRIS HOGERTY