(1)(a) The Secretary of State shall conduct an annual audit of the State Accident Insurance Fund Corporation and the Industrial Accident Fund pursuant to ORS 297.210. As part of this audit, the Secretary of State shall contract with a firm qualified to perform an independent actuarial review.
(b) The firm conducting the review required by paragraph (a) of this subsection shall be familiar with the accounting standards applicable to the reserves under review, shall meet all appropriate standards of practice established by the Casualty Actuarial Society, shall employ a staff that includes no fewer than three people who have attained fellowship in the Casualty Actuarial Society and shall maintain limits of errors and omission insurance as prescribed by the Secretary of State.
(c) The Secretary of State shall determine the scope of the review required by paragraph (a) of this subsection, which shall include, but is not limited to:
(A) A review of the sources and uses of the moneys in the Industrial Accident Fund;
(B) A reconciliation of changes in actuarial assumptions and reserve values from the prior year;
(C) An examination of the development of claim reserve inadequacies or redundancies over time;
(D) An assessment of the future financial viability of the Industrial Accident Fund; and
(E) An evaluation of losses and loss adjustment expense reserves discounted by a rate determined by the Director of the Department of Consumer and Business Services that is consistent with discount rates generally applied by insurers authorized to underwrite workers’ compensation insurance in Oregon.
(d) The State Accident Insurance Fund Corporation shall cooperate with the actuarial firm in all respects and shall permit the firm full access to all information the firm deems necessary for a true and complete review. Information provided to the actuarial firm conducting the annual review is subject to the same limitations on public inspections as required for the records of the State Accident Insurance Fund Corporation.
(e) The audit required by paragraph (a) of this subsection shall be conducted using both generally accepted accounting principles and the statutory accounting principles published by the National Association of Insurance Commissioners.
(f) The cost of the audit required by paragraph (a) of this subsection shall be paid by the State Accident Insurance Fund Corporation.
(2) The Secretary of State shall issue an annual report to the Governor, the President of the Senate and the Speaker of the House of Representatives on the results of the audit and review. The audit and the report of the review performed by the independent actuarial firm shall be available for public inspection, in accordance with the Secretary of State’s established rules and procedures governing public disclosure of audit documents. [2001 c.724 §1]
Note: 656.772 and 656.774 were enacted into law by the Legislative Assembly but were not added to or made a part of ORS chapter 656 or any series therein by legislative action. See Preface to Oregon Revised Statutes for further explanation.
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