requirements for subsidiaries and acquisitions.
(1) What if an individual firm is a subsidiary of
(a) If an individual self-insured firm
has a parent (owner of fifty percent and/or having controlling financial
interest), the parent must provide the department with its written
guarantee, L&I form F207-040-000, to assume responsibility for all
workers' compensation liabilities of the subsidiary if the subsidiary
defaults on its liabilities.
(b) If a parent fails to
provide a guarantee, the department will require the subsidiary to
provide surety at one hundred twenty-five percent of its actual
requirement. The subsidiary must continue to provide surety at the
higher level as long as it has no parental guarantee.
Certification of an individual self-insurer will include all of its
subsidiaries (fifty percent owned and/or financial interest controlled
by) or divisions doing business in Washington, as well as new
acquisitions after certification becomes final. One certificate will be
issued to an approved self-insurer. The subsidiaries or divisions will
be considered one self-insurer for all industrial insurance purposes.
(2) What if a certified self-insurer is acquired by another
(a) If it is an asset only acquisition, the
certified self-insurer must surrender its certification and would retain
the self-insurance liabilities and must continue to provide benefits.
The new owner would be required to obtain industrial insurance coverage
through the state fund. If the new owner wishes to become self-insured,
it must meet the department's minimum requirements and submit an
application according to the normal certification process.
(b) If the acquisition is a stock acquisition, the new owner must either
provide a parental guarantee in accordance with WAC 296-15-024(4),
or if it wishes to have the self-insurance certification transferred to
the new parent organization, it must:
(i) Provide proof of
financial capabilities by furnishing three years of audited financial
(ii) Furnish evidence of an acceptable
claim administration program to oversee a self-insurance program; and
(iii) Demonstrate the existence of an acceptable accident
prevention program covering all of its operations in Washington.
[Statutory Authority: RCW 51.04.020,
06-06-066, § 296-15-027, filed 2/28/06, effective 4/1/06.]