SB 661-FN amends existing laws governing pooled risk management programs for political subdivisions, introducing new definitions and requirements to enhance financial oversight and accountability. Key provisions include the authority for the secretary of state to mandate the abatement of insufficient assets or seek receivership for a program, as well as the requirement for participating members to be assessed on a pro rata basis to cover deficiencies identified through actuarial evaluations. The bill emphasizes the fiduciary responsibilities of board members, including duties of good faith and loyalty, while deleting previous language that lacked clarity on these responsibilities. Additionally, it establishes thresholds for contingency reserves, requiring programs to notify members and the secretary of state if reserves fall below specified levels.

The bill also mandates annual audits by independent certified public accountants and the creation of written bylaws for governance. It modifies the actuarial evaluation process to focus on calculating necessary contributions and assessments, and requires political subdivisions to establish a health care stabilization fund. Furthermore, it allows boards to request temporary increases in maximum coverage limits for workers' compensation and health coverage, contingent upon specific conditions. The bill aims to improve transparency and financial stability within pooled risk management programs, while potentially increasing costs for municipalities and counties due to the need for additional reserves and assessments. Certain provisions will take effect on July 1, 2027, while others will be effective upon passage.

Statutes affected:
Introduced: 5-B:2, 5-B:5, 5-B:6