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Session Law

2005

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Chapter 61 AN ACT RELATIVE TO CLAIMS TRUSTS FUNDS.

Whereas , The deferred operation of this act would tend to defeat its purpose, which is to forthwith provide for audits of certain health insurance claims funds, therefore it is hereby declared to be an emergency law, necessary for the immediate preservation of the public convenience.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:


SECTION 1. Section 3A of chapter 32B of the General Laws, as appearing in the 2004 Official Edition, is hereby amended by adding the following paragraph:-

Any city, town, county, or other political subdivision of the commonwealth maintaining a claims trust fund under this section shall cause an audit of that fund to be made annually. The audit shall determine whether the accounting for the fund is in accordance with generally accepted accounting principles, including accrual for claims that have been incurred but not paid as of the conclusion of the fiscal year. The audit may be performed as part of the annual audit of the city, town, county, or other political subdivision. The amount of any deficit in a claims trust fund, if not otherwise provided for, shall be raised in the next fiscal year's tax rate for a city or town, or be provided in the next fiscal year's budget for any other political subdivision and credited to the claims trust fund. Nothing in this paragraph shall eliminate the requirement of the preceding paragraph with respect to adjusting the future ratio of monthly premium contributions of the subdivision and its employees and retirees to achieve a previously established ratio or ratios of monthly premium contributions.

SECTION 2. Notwithstanding any general or special law to the contrary, any city, town, county, or other political subdivision of the commonwealth which has a deficit in its claims trust fund at the end of fiscal year 2005 attributable to failure to accrue claims which had been incurred but not paid as of the conclusion of that fiscal year, is authorized to capitalize the deficit and amortize the amount over the 3 fiscal years beginning July 1, 2006 in 3 equal amounts, or on a schedule providing for a more rapid amortization.

Approved August 3, 2005.

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