certification requirements and application process.
(1) What requirements must an employer meet to
apply for self-insurance certification? An employer must meet all
the following minimum criteria:
(a) Be in business for
three years prior to applying for self-insurance.
(b) Have a
written accident prevention program in place in Washington state for at
least six months prior to making application.
total assets worth at least twenty-five million dollars as verified by
audited financial statements prepared by independent certified
(d) Demonstrate positive earnings in the
current year and two out of the last three years. The overall earnings
for the last three years must also be positive.
(e) Have a
current liquidity ratio of at least 1.3 to 1, and a debt to net worth
ratio of not greater than 4 to 1.
(2) When are
applications processed? The department processes applications for
certification the quarter after the application is accepted.
Self-insurance certification for approved applicants will be effective
the quarter following processing.
(3) What documentation
must be submitted with an application? The following documentation
must be submitted with each self-insurance application:
(a) A completed application form (Form F207-001-000) with a
nonrefundable application fee. The application fee is reviewed annually
by the department and is based on the administrative costs incurred in
processing an application, but in no instance will it be less than two
hundred fifty dollars.
(b) Three years of audited financial
statements prepared by independent certified accountants. The audited
financial statements must be in the name of the applicant.
(c) A list of all of the applicant's physical locations and addresses in
Washington state, including all subsidiary operations.
A copy of the written accident prevention program for each of the
applicant's operations in Washington. If the applicant or any of its
subsidiaries has multiple locations, more than one copy of the accident
prevention program may be required.
(e) A completed
Self-Insurance Certification Questionnaire (Form 207-176-000).
(f) A completed self-insurance electronic data reporting system
(SIEDRS) enrollment form (Form F207-193-000).
happens during the application review process? The department:
(a) Assesses the accident prevention program at
(b) Analyzes the financial
information supplied by the applicant. The department may also consider
relevant information obtained from other sources to assess the
applicant's financial strength.
(c) Reviews the completed
Claims Administration Questionnaire and attachments. Additional
information may be requested.
The department determines
whether the application is denied or tentatively approved. The
department notifies each applicant of its decision. If the department
denies an application, it will state the reasons for the denial in its
(5) If the application is denied, when may
the applicant submit a new application? If an application is
denied for deficiencies in its accident prevention program, the
applicant may submit a new application for certification after the
corrections to the program are made and have been in place for six
If the application is denied for financial reasons,
the applicant may submit a new application for certification after the
next annual audited financial statement is available.
the application is denied because the claims administration organization
is deficient, the applicant may submit a new application for
certification after corrections to the program are made.
(6) What if the application is tentatively approved? The
applicant must submit the following:
(a) Surety in the
amount determined by the department and issued on the department form.
(b) A signed copy of the service agreement with a third-party
administrator, if applicable.
(i) The contract copy may
delete clauses(s) relating to payment of services.
However, if payment for services is based on the number of claims filed
by the self-insurer's workers, this must be explained in detail.
(c) A copy of any excess insurance (reinsurance) policy including
Washington state endorsements, if obtained.
(d) A signed
copy of the Acknowledgement of Self-Insurance Responsibilities form.
(e) Payment of any outstanding premium of the applicant's state
industrial insurance account.
(f) Payment of the
applicant's estimated portion of the deficit, if a deficit condition in
the state industrial insurance fund exists at the time of application.
(g) Adequate electronic test data to SIEDRS, to demonstrate the
ability to submit claim data electronically in the required format.
Requirements are defined in the SIEDRS enrollment package (Publication
F207-194-000). The department may waive the testing requirement if the
applicant has a service agreement with a third-party administrator that
already submits data to SIEDRS.
If the required items are
not received prior to the end of the quarter, the application may be
denied. If the application is denied, the applicant must reapply in
order to be considered for self-insurance.
(7) How is
the initial surety requirement established? The initial surety
requirement is established at the highest of the following:
(a) The annual premiums the applicant pays (or would pay) into the
state industrial insurance fund; or
(b) The annual average
of the last five years of developed incurred costs to the state
industrial insurance fund; or
(c) The minimum surety
requirement as established annually by the department. The minimum
surety requirement is equal to the average total cost of one permanent
total disability award.
The applicant has the option of
submitting an independent actuarial analysis of its projected liability.
The department reserves the right to accept or reject this analysis.
In no event will the surety requirement be established at less than the
minimum surety in force at that time.
Authority: RCW 51.14.110.
09-01-177, § 296-15-021, filed 12/23/08, effective 1/23/09. Statutory
Authority: RCW 51.04.020,
06-06-066, § 296-15-021, filed 2/28/06, effective 4/1/06. Statutory
Authority: RCW 51.14.077,
51.44.070 and 51.44.150.
99-23-107, § 296-15-021, filed 11/17/99, effective 12/27/99.]