Section R20-5-1107. Initial Application under A.R.S. § 23-961

A.      A public entity may file an initial application for authority to self-insure under A.R.S. § 23-961 if the public entity:

1.        Provides  an  annual  payroll  in  Arizona   of  at  least

$2,000,000; and

2.        Has total assets of at least $50,000,000.

B.       An individual employer that is not a public entity may file an initial application for authority to self-insure under A.R.S. § 23-961 if the employer:

1.        Is engaged in business in Arizona and has been for at least five years before the date of the initial application;

2.        Provides  an  annual  payroll  in  Arizona   of  at  least

$2,000,000, including the combined payrolls of all sub- sidiary companies that will be under the self-insurance authorization;

3.        Meets either of the following thresholds:

a.        Has assets of at least $50,000,000; or

b.        Has $10,000,000 in net worth and a cash flow ratio of at least .25.

C.      The applicant for authority to self-insure shall complete and file with the Division a typewritten application form approved by the Division. An application is considered filed when it is received at the Division.

D.      The authorized representative of the applicant shall sign and date the initial application.

E.       The authorized representative signing the initial application shall verify, in writing, that the information submitted with the application is correct.

F.       The Division shall deem an initial application for authority to self-insure complete if an applicant that is not a subsidiary company provides the following information with the initial application:

1.        A statement from the board of directors or governing body:

a.        Authorizing the filing of the application, and

b.        Designating the person given authority to sign the application on behalf of the applicant;

2.        A statement classifying the applicant’s Arizona employ- ees using the workers’ compensation classification codes of the approved rating organization used by the Arizona State Compensation Fund;

3.        A copy of the applicable hospital or medical agreement or a detailed statement of the arrangements between the employer and the medical provider, if medical care is directed under A.R.S. § 23-1070;

4.        If the applicant is not a public entity, a copy of the appli- cant’s audited financial statements or internally-reviewed and signed financial statements for the most current and prior two fiscal years, including any notes to the financial statements;

5.        If the applicant is a public entity, a copy of the applicant’s audited financial statement for the most current and prior fiscal year; and

6.        If the applicant is a public entity that qualifies for exemp- tion under R20-5-1114(A), the certified statement required under R20-5-1114(B).

G.      The Division shall deem an initial application for authority to self-insure complete if an applicant that is a subsidiary com- pany provides the following information with the initial appli- cation:

1.        The information required in Section (F);

2.        A completed Parent Company Guaranty form signed by the authorized representative of the subsidiary’s parent company;

3.        A certified copy of the resolution of the parent company’s board of directors authorizing a designated officer to complete, sign, and file the Parent Company Guaranty form; and

4.        A copy of the parent company’s audited financial state- ments for the most current and prior two fiscal years, including any notes to the financial statements.

Historical Note

New Section made by final rulemaking at 11 A.A.R.

1008, effective April 4, 2005 (Supp. 05-1).