Bill sets rules for risk management pools [The New Hampshire Union Leader, Manchester]

May 18--CONCORD -- The House Thursday without debate approved a bill to set parameters for how risk management pools, such as the Local Government Center, Primex and SchoolCare, may operate.

The Local Government Center this past two weeks has been before an administrative hearing over how it handled the surplus from its health, liability and workers compensation programs. A decision is expected soon.

The House approved Senate Bill 212 setting the actuarial limits for reserves, changing the makeup of the governing board and requiring all such programs be set up as non-profit corporations.

"Pooled risk management programs should be truly governed by its members, which means more transparency is needed on the status of membership funds. The reforms passed today will require disclosure and return of surplus monies to members annually," said House Speaker William O'Brien. "Increasing state oversight of pooled risk management companies also will stop and prevent the unfortunate abuses we have seen and result in the reduction of insurance premiums for members and in turn lead to savings to local taxpayers."

Under the plan, the pools would be required to return any surplus to their member communities in either a premium reduction or a cash payment.

The payments would have to be made annually, and each year, the governing boards would have to determine and declare publicly any surplus.

That provision of the bill would not go into effect until July 1, 2014.

Critics of the programs say they have amassed reserves in the millions of dollars that should have been returned to the cities and towns and counties, but was not.

Under SB 212, the governing board makeup would change and members would be limited to three, three-year terms.

The bill would also make it clear that the risk management pools are not securities under state law, which had been a concern raised by the secretary of state, who oversees the organizations.

The bill clarifies that the secretary of state has enforcement powers over the pools and has examination authority. Any decision of the secretary of state may be appealed to Merrimack County Superior Court and then to the state Supreme Court, under the plan.

All lobbying or advocacy activities have to be related to risk pool issues and have to be done through an account separate from the insurance trusts.

Under the bill, risk pools would be prohibited from having exclusive arrangements or free market preemptions.

The bill goes back to the Senate for review due to the House changes.

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