General Laws of Massachusetts - Chapter 40M Governmental Units Pooled Insurance - Section 4 Certificate of approval; application; requirements; refusal; service of legal process

Section 4. (A) A proposed public employer self-insurance group shall file with the commissioner its application for a certificate of approval accompanied by a nonrefundable filing fee in the amount of one hundred dollars. The application shall include the group’s name, location of its principal office, date of organization, name and address of each member, and such other information as the commissioner may reasonably require, together with the following:

(1) A copy of the articles of association, if any;

(2) A copy of the by-laws of the proposed group;

(3) A copy of the agreement between the group and each member securing the payment of benefits, which shall include provision for payment of assessments as provided for in section fourteen;

(4) Designation of the initial board of trustees and administrator;

(5) The address in this state where the books and records of the group will be maintained at all times;

(6) A pro forma financial statement on a form acceptable to the commissioner showing the financial ability of the group to pay the obligations of its members;

(7) A documented agreement by each member to the group that at least thirty-three per cent of that member’s estimated annual net premium is payable the initial day of coverage afforded by the group;

(8) A confirmation of any required reinsurance by a recognized carrier in an amount acceptable to the commissioner of insurance;

(B) To obtain and to maintain its certificate of approval a public employer self-insurance group shall comply with the following requirements as well as any other requirements established by law or regulation:—

(1) Specific and aggregate excess insurance in a form, in an amount, and by an insurance company acceptable to the commissioner. Each group shall maintain aggregate excess insurance in a minimum amount equal to two million dollars. The commissioner may establish higher minimum requirements for the amount of specific and aggregate excess insurance based on differences among groups in their size, types of local government services provided by members of the group, years in existence and other relevant factors.

(2) An estimated annual standard premium of at least two hundred and fifty thousand dollars during a group’s first year of operation.

(3) A fidelity bond for the administrator in a form and amount prescribed by the commissioner of insurance.

(C) A group shall notify the commissioner of any change in the information required to be filed under subsection (A) or in the manner of its compliance with subsection (B) no later than thirty days after such change.

(D) The commissioner shall act upon a completed application for a certificate of approval within ninety days.

(E) The commissioner shall issue to the group a certificate of approval upon finding that the proposed group has met all requirements or the commissioner shall issue an order refusing such certificate setting forth reasons for such refusal upon finding that the proposed group does not meet all requirements.

Upon refusal, the commissioner shall hold a hearing within thirty days after said refusal, upon notice requesting such hearing by applicant within ten days of said refusal.

(F) Each public employer self-insurance group shall be deemed to have appointed the commissioner as its attorney to receive service of legal process issued against it in this state. The appointment shall be irrevocable, shall bind any successor in interest, and shall remain in effect as long as there is in this commonwealth any obligation or liability of the group for benefits.

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Last modified: September 11, 2015