Tennessee Senate Bill SB2909

Tennessee 2023-2024 Regular Session

• Introduced: 2/1/24
• Chaptered: 4/17/24
• Passed: 4/17/24

Caption

AN ACT to amend Tennessee Code Annotated, Title 12; Title 48; Title 50 and Title 56, relative to self-insurance.

Impact

If enacted, SB2909 would create a nonprofit entity known as the Tennessee Self-Insurers' Guaranty Association. This association would be responsible for collecting assessments from self-insured employers, thereby creating a financial cushion to cover claims in the event that a self-insured employer becomes insolvent. The Act mandates that all participating self-insurers remain members of this association, ensuring that they contribute to a pool meant to secure workers' compensation claims, effectively modernizing the self-insurance landscape in Tennessee.

Summary

Senate Bill 2909, also known as the Tennessee Self-Insurers' Guaranty Association Act, aims to amend various provisions within the Tennessee Code Annotated related to self-insurance for workers' compensation. The act establishes a new association dedicated to ensuring timely payments for workers' compensation claims arising from self-insured employers who may face insolvency. This legislation is significant as it seeks to protect claimants from financial losses when self-insured employers are unable to meet their obligations due to financial instability or insolvency.

Sentiment

The discussions surrounding SB2909 reflect a generally supportive sentiment among its proponents, who argue that the bill is a necessary safeguard against the risks associated with self-insurance. Advocates believe that by establishing a dedicated guaranty association, the bill will enhance the stability of the workers' compensation system. However, some concerns have been raised regarding the financial responsibilities of self-insured employers and the implications of increased assessments on their operational costs.

Contention

Notable points of contention arise from concerns about the financial implications for self-insured employers, particularly regarding the assessments that will be established for participation in the guaranty association. Some stakeholders argue that these costs may discourage smaller employers from self-insuring or could lead to increased prices for goods and services as businesses pass on costs. Debates have also emerged over the governance of the association and the transparency in its operations, with calls for clear regulations to prevent potential abuses in the management of funds.