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The Minnesota bill would change the law for bankrupt employers



Minnesota lawmakers have proposed legislation that would change provisions of the existing workers’ compensation law regarding cases where private self-insured employers are determined to be insolvent.

Senate Bill 3193, filed Thursday, deals with self-insured employers who are issued certificates of insolvency and whose security deposits are required by the state labor commissioner after failure to pay compensation benefits in cases where the self-insured company files for voluntary or involuntary bankruptcy.

The bill would require self-insureds to notify the commissioner before, or immediately after, the filing of a bankruptcy petition under the United States Bankruptcy Code and when a court declares the self-insured bankrupt.

The measure requires the commissioner to freeze the deposit in cases where the self-insured do not pay workers̵

7; compensation benefits after insolvency.

In cases where a self-insured employer in bankruptcy continues to pay benefits on time, the commissioner could still levy the deposit if it is determined that delays in paying benefits can be expected as a result of the bankruptcy filing or declaration.

Under the bill, the self-insured employer would have 30 days to meet with the commissioner after the bankruptcy filing to discuss the matter, and failure to do so could result in a default judgment against the self-insurer.


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