Section R20-5-1109. Security Deposit; Excess Insurance Policy

A.      Except as provided in R20-5-1114, an applicant authorized to self-insure under this Article shall post security in the amount of at least $100,000.00 under A.R.S. § 23-961. The self- insurer shall not reduce or offset this minimum amount by any credit for excess insurance.

B.       Except as provided in R20-5-1114, and subject to the mini- mum security requirement of A.R.S. § 23-961, a self-insurer filing a request to renew its authority to self-insure under R20- 5-1108 shall post security in an amount equal to 125% of its total estimated future liability, or in an amount determined by the Division under R20-5-1127.

C.      Subject to review by the Commission, the self-insurer shall determine its total estimated liability by using the Workers’ Compensation Liability form.

D.      The Commission shall approve a credit for excess insurance against the amount of security required under this Article only if the following criteria are met:

1.        The self-insurer satisfies the minimum-security require- ment of A.R.S. § 23-961,

2.        The self-insurer does not reduce or offset the minimum- security amount by an excess insurance,

3.        The self-insurer calculates the credit on the Workers’ Compensation Liability form,

4.        The excess insurance policy contains a 60-day notice of termination,

5.        The excess insurer does not have an affiliate relationship with the self-insurer,

6.        The excess insurance policy provides that the insolvency of the self-insurer does not relieve the excess insurer of liability under the policy, and

7.        The excess insurer posts a deposit under A.R.S. § 23- 961(D).

E.       If an excess insurance provider gives the self-insurer notice of its intent to terminate the policy, the self-insurer shall immedi- ately:

1.        Provide written notice of the notice of termination to the Division, and

2.        Deposit security as shown on the Worker’s Compensation Liability form without credit for the excess insurance.

Historical Note

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

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