SF 2740 - Workers' Compensation Reinsurance Retention Limits

• Establishes the low retention limit at $500,000 in 2016, replacing the previous formula-based adjustment tied to statewide average weekly wage changes.

• Creates a new "jumbo" retention limit effective January 1, 2018, set at ten times the low retention limit and subject to adjustment when the low retention limit changes.

• Authorizes the reinsurance association board to determine future adjustments to the low retention limit subject to commissioner of labor and industry approval, with the commissioner considering costs, inflation, member impacts, and reinsurance markets in other states.

• Maintains existing high retention limit (two times low) and super retention limit (four times low), both adjusted when the low retention limit is adjusted.

• Preserves restrictions on members choosing high, super, or jumbo retention limits transferring liability below their chosen limit to other entities, with specific exceptions for related entities, pooling arrangements, and aggregate loss scenarios.