Section R20-5-715. Aggregate and Specific Excess Insurance Policies

A.      A pool shall maintain aggregate and specific excess insurance policies during all periods of self-insurance.

B.       The Commission shall not consider policies of aggregate and specific excess insurance when determining a pool’s ability to fulfill its financial obligations under the Arizona Workers’ Compensation Act, unless the policies are issued by a casualty insurance company authorized by the Arizona Department of Insurance to transact business in Arizona.

C.      A pool or insurance company seeking to cancel or refuse renewal of aggregate and specific excess insurance policies shall provide 90 days written notice of the proposed cancella- tion or non-renewal to the other party to the policies and to the Commission. The written notice shall be by registered or certi- fied mail. Failure to provide notice as required by this Section precludes cancellation or non-renewal of the policies.

D.      Policy and Retention Amounts.

1.        Policy and retention amounts for specific and aggregate excess insurance for a pool shall be as follows:

a.        Maximum retention for specific excess insurance shall not exceed $250,000. Specific excess insurance shall be provided to the statutory limit; and

b.        Maximum retention of aggregate excess insurance shall not exceed 110% of collected premiums. Total aggregate insurance coverage shall not be less than

$5,000,000.

2.        Aggregate and specific excess insurance policies shall state that payments of workers’ compensation benefits on a claim made by a member employer, pool, or surety under a bond or through the use of other approved securi- ties shall be applied toward reaching the retention level in the policy.

Historical Note

Adopted effective September 9, 1998 (Supp. 98-3).