for a group self insurance program.
does the department determine the required surety level for a group
self insurer? After the initial five years of certification, the
department will annually calculate the surety requirement for a group
self insurer by comparing its original liability estimate to its reserve
fund. If the difference is:
(a) Less than fifteen
percent, the department will accept the stated reserves of the group as
the required surety level.
(b) Greater than fifteen
percent, the department will establish the group's required surety
(2) What type of surety is acceptable for a group
self insurer's reserve fund? A group self insurer's reserve fund
must be cash.
(3) May a group self insurer pay expenses
from its reserve fund? A group self insurer may pay only the
following items from its cash reserve fund:
Administrative expenses for operating the group self insurance program,
including claims handling expenses, legal, investigative or
administrative costs and department administrative assessments.
(b) Claim expenditures. Supplemental pension fund (SPRF) benefits
may also be paid from the reserve fund if the group redeposits SPRF
reimbursements into the reserve account. Interest earned by the reserve
account must remain in the account while this method is in effect.
(c) Reinsurance premiums. All recoveries from these policies must
be redeposited into the reserve fund. Within eighteen months of
premium payment, the group must return the amount paid for premiums if
reinsurance recoveries were not sufficient to return the account to its
(4) How can a group self insurer assess
its members for reserve fund costs? A group self insurer may
determine how it will assess members for required reserve fund costs.
The group's bylaws must describe the procedures it will use to collect
(5) Must a group self insurer purchase
reinsurance? A group self insurer must obtain reinsurance for each
year of operation to ensure adequate protection against catastrophic or
(6) What if a group self insurer
collects excess premiums during a fund year and has a surplus? A
group self insurer may refund surplus money from a fund year if it
retains sufficient money to fulfill all of its workers' compensation
obligations. This includes maintaining the required reserve fund.
(7) What if a group self insurer collects insufficient premiums
during a fund year and has a deficit? A group self insurer may
cover a deficit by:
(a) After receiving department
(i) Unencumbered surplus from a different
(ii) An alternative method; or
Assessing the membership. The department may require the group to use
Authority: RCW 51.14.077,
. 99-23-107, § 296-15-161, filed 11/17/99, effective 12/27/99.]