Section R20-5-203. Self-insurance Renewal Application; Require- ments

A.      All individual applicants for self-insurance renewal authority shall:

1.        Complete, date, sign, and file with the Commission an Option Election form that can be obtained from the Com- mission  when  providing   a  bond  or  other   security  as

required by R20-5-206(D) for the payment of workers’ compensation liabilities. The Option Election form shall list the following:

a.        Total   outstanding  workers’  compensation  accrued liabilities for all previous periods of self-insurance;

b.        Amount of future reserves;

c.        Amount of calculated bond based on the amount of total estimated future liability x 125%.

For those self-insurers complying with R20-5-206(D)(1), the self-insurer shall additionally provide a certificate of excess insurance.

2.        Provide a continuation certificate for the guaranty bond or letter of credit signed by an authorized representative of the surety or bank. The amount of the bond, letter of credit, or securities shall equal the amount submitted on the Option Election form.

3.        Submit a copy of the most recent certified annual finan- cial statement at least 30 days prior to the anniversary date of the authorization to self-insure. A parent company that has executed a guaranty for a subsidiary shall also submit a copy of its most recent certified annual financial statement within the same time period required by this subsection.

4.        Provide a Guaranty To Satisfy Compensation Claims Under Workers’ Compensation Act in Arizona form as provided in R20-5-206(C) completed, signed, and dated by the parent company of a subsidiary self-insurer if the parent company of the self-insurer is different from the last filing approved by the Commission.

B.       All workers’ compensation pool applicants for self-insurance renewal authority shall:

1.        Provide information to the Commission as required under subsections (A)(1), (2), and (3).

2.        Provide an updated indemnity agreement pursuant to R20-5-202(C)(2) for changes occurring since the last fil- ing approved by the Commission.

C.      All applicants for renewal shall continue to maintain an office in Arizona as described in R20-5-202(A)(2).

D.      The Commission’s analysis for renewal includes the follow- ing:

1.        A review of the items required by R20-5-202(A).

2.        A review of the claims profile which includes a review of the preceding year’s claims filed, claims denied, and denial rate. Denial rates in excess of 8% require addi- tional analysis by the Commission’s Claims Division to establish the reasons for the denials.

3.        A review of the self-insurer’s financial profile which includes a review of the financial data as described in R20-5-202(B)(3).

Historical Note

Former Rule III. Section repealed, new Section adopted effective July 6, 1993 (Supp. 93-3). R20-5-203 recodified from R4-13-203 (Supp. 95-1).