for a self insured pension or fatality claim.
(1) When must a self insurer provide funding for a
permanent total disability (pension) or fatality claim? Within
sixty days of receipt of the department's order, the self insurer must
fund the pension or fatality claim.
(2) What types of
funding may a self insurer use for a pension or fatality claim? A
self insurer may fund a pension or fatality claim with cash, a bond on
L&I form F207-065-000, annuity on L&I form F207-129-000 or
assignment of account on L&I form F207-058-000. If the pension
benefit level increases, the self insurer must increase the surety level
or provide additional surety to cover the deficiencies.
(3) What is an annuity? An annuity is a contract with an
insurance company where the insurance company agrees to pay to the
department a specific amount covering the lifetime of a claimant.
(4) What is an assignment of account? A self insurance
assignment of account/certificate of deposit is a legal instrument
executed by the self insurer and an approved commercial banking
institution in Washington. The assignment of account must:
(a) Identify an existing account on deposit with the approved banking
institution in the name of the self insurer. The existing assigned
account must contain the amount determined necessary by the department
to cover the pension benefits on the specific claim beyond all other
assignments on that account. A separate assignment of account must be
established for each pension.
(b) Bind the self insurer to
maintain a balance in the assigned account at least equal to the current
present cash value of the pension benefits on the claim and beyond all
other assignments on the account for the life of the claim. Present
cash values of the assigned account/certificate of deposit will be
revised annually by the department. Quarterly pension payments made
from the assigned account must not reduce the account balance below the
present cash value of the pension beyond all other assignments on the
(c) Authorize the department, if the self
insurer defaults, to immediately withdraw up to the entire amount
assigned to the pension claim from the assigned account/certificate of
deposit. The department will take this action without notifying the
defaulting self insurer.
(d) If the bank holding the
assignment of account/certificate of deposit fails, the self insurer is
responsible for the entire amount of the pension or fatality obligation.
Within thirty days, the self insurer must:
(i) Establish a
new assignment of account/certificate of deposit, bond; or
(ii) Deposit cash into the reserve fund.
(e) If the self
insurer ends its self insurance status, the assignment of
account/certificate of deposit will be placed with the department. The
department will determine the required reserve for the pension or
fatality claim, and any excess will be returned to the former self
Authority: RCW 51.14.077,
. 99-23-107, § 296-15-171, filed 11/17/99, effective 12/27/99.]