Source: https://www.pacode.com/secure/data/034/chapter125/subchapAtoc.html
Timestamp: 2019-04-20 00:14:26+00:00

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125.4. Application for affiliates and subsidiaries.
125.10. Funding by public employers.
125.12. Payment, handling and adjusting of claims.
125.14. Change in legal status, ownership or financial condition.
125.16. Reporting by runoff self-insurer.
125.19. Additional powers of Bureau and orders to show cause.
125.21. Self-insurance loss portfolio transfer policy.
This subchapter is promulgated under section 435 of the act (77 P. S. § 991) to provide regulatory guidelines for the uniform and orderly administration of self-insurance for individual employers. This subchapter ensures full payment of compensation when due to employees of self-insured employers and to their dependents under the act and the Occupational Disease Act.
The provisions of this § 125.1 amended under sections 305(a) and 435(a) of the Workers Compensation Act (77 P. S. § § 501 and 991(a)) and section 2205 of The Administrative Code of 1929 (71 P. S. § 565).
The provisions of this § 125.1 amended September 10, 2010, effective September 11, 2010, 40 Pa.B. 5147. Immediately preceding text appears at serial pages (250119) to (250120).
ActThe Workers Compensation Act (77 P. S. § § 11041.4, 25012506 and 27012708).
Active self-insurerA self-insurer that is not a runoff self-insurer.
ActuaryA member in good standing of the Casualty Actuarial Society or a member in good standing of the American Academy of Actuaries.
Adequate accident and illness prevention programA determination by the Bureau under Chapter 129 (relating to workers compensation health and safety) that a self-insured employers accident and illness prevention services fulfill the program and service requirements as stated in that chapter.
AffiliatesEmployers which are closely related through common ownership or control.
Aggregate excess insuranceInsurance under which the insurer pays on behalf of or reimburses a self-insurer for its payment of benefits on claims incurred during a policy period in excess of the retention amount to the insurers liability limit.
ApplicantAn employer requesting permission to initiate or to renew self-insurance, an employer requesting permission for it and its affiliates or subsidiaries to initiate or to renew self-insurance, or a parent company requesting permission for its subsidiaries to initiate or to renew self-insurance.
Authorized retention amountA retention amount that is equal to or is less than a self-insurers maximum quick assets exposure amount or the current standard retention amount, whichever is less, or the special retention amount approved by the Bureau.
BureauThe Bureau of Workers Compensation of the Department.
Cash flow protection amountThe maximum amount of benefits a self-insurer pays over a 2-year period on an occurrence without reimbursement from an insurer under a specific excess insurance policy with a per year per occurrence cash protection plan.
(i) The largest number of employees anticipated to work at one time during a work day at the largest location in this Commonwealth in terms of the applicants employment, or the employment of any of its affiliates or subsidiaries under a consolidated permit under § 125.4 (relating to application for affiliates and subsidiaries), multiplied by the current Statewide average weekly wage multiplied by 500.
(ii) The current Statewide average weekly wage multiplied by 5,000.
Claims service companyAn individual, corporation, partnership or association engaged in the business of servicing a self-insurers claims, including the adjusting and handling of claims, the payment of benefits and the provision of required reports.
(A) The courts and other officers or agencies of the unified judicial system.
(B) The General Assembly, and its officers and agencies.
(C) The Governor, and the departments, boards, commissions, authorities and officers and agencies of the Commonwealth.
(ii) An employer, politic and corporate, exercising an essential government function under the laws of the Commonwealth that is not a political subdivision.
Dedicated asset accountAn account or fund, such as a bank, checking or trust account or an internal services fund, holding cash or investments solely to finance or hold reserves for the payment of a public employers workers compensation liability and related expenses.
EmployerAn employer as defined in section 103 of the act (77 P. S. § 21) or under section 103 of the Occupational Disease Act (77 P. S. § 1203), or both.
Excess indemnity insuranceAggregate excess insurance or specific excess insurance that meets the requirements in § 125.11(b)(1) (relating to excess insurance).
Excess insuranceExcess indemnity insurance or workers compensation excess insurance.
Financial ability to self-insurePossession of adequate financial capacity and adequate financial health, as specified in § 125.6(a) (relating to decision on application).
GuarantorThe affiliate or parent company that has guaranteed a self-insurers liability by executing an agreement under § 125.4(b) that is on file with the Bureau.
Investment grade long-term credit or debt ratingA long-term credit or debt rating identified as investment grade by the NRSRO that issued it.
Liability limitThe maximum amount of benefits for which an insurer indemnifies a self-insurer under an excess insurance policy.
Long-term credit or debt ratingA measurement by an NRSRO of an applicants willingness and intrinsic capacity to meet its long-term financial commitments as the commitments become due, exclusive of the effects of any guaranties, insurance or other forms of credit enhancements or legal priorities on any of the applicants financial obligations.
Loss developmentThe tendency of the cost of a group of claims to increase as they mature.
Maximum quick assets exposure amountFive percent of an applicants average year-end quick assets amount for its last 2 completed fiscal years.
(i) The current Statewide average weekly wage multiplied by 500.
(ii) The retention amount of the applicants current or any proposed excess insurance, if applicable.
(i) The current Statewide average weekly wage multiplied by 1,000.
NRSROA designated Nationally-recognized statistical rating organization of the United States Securities and Exchange Commission or its successor.
Occupational Disease ActThe Pennsylvania Occupational Disease Act (77 P. S. § § 12011603).
Parent companyAn entity which directly or indirectly owns a majority of the voting stock of an employer or directly or indirectly controls a majority of the employers board of directors appointments if the employer has no voting stock.
PermitThe document issued by the Bureau to an employer which authorizes the employer to operate as a self-insurer.
Political subdivisionA county, city, borough, incorporated town, township, school district, vocational school district and county institution district, municipal authority, or other entity created by a political subdivision under law.
Private employerAn employer who is not a public employer as defined in this section.
Public employerThe Commonwealth or a political subdivision.
Quick assetsThe sum of an applicants cash, cash equivalents, current receivables and marketable securities or, if the applicant is a public employer who uses fund accounting, the total of the applicants general fund assets.
(i) The maximum amount of benefits a self-insurer pays without reimbursement from the insurer under an aggregate excess insurance policy or under a specific excess insurance policy which does not include an annual cash flow protection plan.
(ii) The term also includes the lower of the maximum amount of benefits a self-insurer pays on each occurrence without reimbursement from the insurer or the cash flow protection amount under a specific excess insurance policy which includes an annual cash flow protection plan.
Runoff self-insurerAn employer that had been a self-insurer but no longer maintains a current permit.
SecuritySurety bonds, letters of credit or cash or negotiable government securities held in trust to be used for the payment of a self-insurers workers compensation liability upon order of the Bureau if the self-insurer fails to pay its liability due to its financial inability or due to the self-insurer filing for bankruptcy or being declared bankrupt or insolvent.
Self-insuranceThe privilege granted to an employer which has been exempted by the Bureau from insuring its liability under section 305(a) of the act (77 P. S. § 501(a)) and section 305 of the Occupational Disease Act (77 P. S. § 1405).
Self-insurance loss portfolio transfer policyA policy of insurance accepted by the Bureau as meeting the requirements of § 125.21 (relating to self-insurance loss portfolio transfer policy) under which a self-insurer transfers liability incurred as a self-insurer to a workers compensation insurer.
(i) An employer which has been granted the privilege to self-insure its liability and to maintain direct responsibility for the payment of this liability under the act and the Occupational Disease Act.
(ii) The term includes a parent company or affiliate which has assumed a subsidiarys or an affiliates liability upon the termination of the parent-subsidiary or affiliate relationship.
(i) A retention amount that exceeds the applicants maximum quick assets exposure amount or the standard retention amount requested by the applicant and approved by the Bureau based on a determination that the applicant has sufficient quick assets to easily liquidate all losses at the requested greater retention amount.
(ii) Additionally, an applicant whose self-insurance status began before September 11, 2010, may use a special retention amount that is equal to the retention amount of the applicants excess insurance in effect on September 11, 2010.
Specific excess insuranceInsurance under which the insurer pays on behalf of or reimburses a self-insurer for its payment of benefits on each occurrence in excess of the retention amount to the insurers liability limit.
(ii) Rounded upward to the nearest hundred thousand.
Statewide average weekly wageThe amount calculated and reported by the Bureau under section 105.1 of the act (77 P. S. § 25.1).
SubsidiaryAn employer whose voting stock or board of directors appointments are directly or indirectly controlled by a parent company.
Workers compensation excess insuranceAggregate excess insurance or specific excess insurance that meets the requirements in § 125.11(b)(2).
Workers compensation excess insurance recoveriesPayments made to a self-insurer under a policy of workers compensation excess insurance or payments receivable under a policy of workers compensation excess insurance that the insurer has agreed in writing that it is liable to pay.
Workers compensation insurerAn insurance company authorized to transact the class of insurance listed in section 202(c)(14) of The Insurance Company Law of 1921 (40 P. S. § 382(c)(14)).
The provisions of this § 125.2 amended under sections 305(a) and 435(a) of the Workers Compensation Act (77 P. S. § § 501 and 991(a)) and section 2205 of The Administrative Code of 1929 (71 P. S. § 565).
The provisions of this § 125.2 amended October 23, 1998, effective October 24, 1998, apply to applicants, self-insurers, runoff self-insurers, group self-insurance funds and run-off funds, 28 Pa.B. 5459; amended September 10, 2010, effective September 11, 2010, 40 Pa.B. 5147. Immediately preceding text appears at serial pages (250120) to (250122).
(a) An applicant shall file an application on a form prescribed by and available upon request from the Bureau. All questions on the application shall be answered completely and accurately with the most recent information available. A rider may be attached if more space is necessary. The application shall be signed by the applicant, or if a corporation, an officer of the corporation. The application, including any attached riders and applicable forms, shall be verified as set forth on the application, subject to the penalties of 18 Pa.C.S. § 4904 (relating to unsworn falsification to authorities).
(b) Initial applications shall be filed with the Bureau no later than 3 months prior to the requested effective date of self-insurance. Renewal applications shall be filed with the Bureau no later than 3 months prior to the expiration of the current permit.
(1) The nonrefundable statutory fee in the amount of $500 for initial applicants or $100 for renewal applicants required under section 305(a) of the act (77 P. S. § 501(a)), payable to the Commonwealth of Pennsylvania. A statutory fee is required in the amount of $500 for each affiliate or subsidiary being initially added or in the amount of $100 for each affiliate or subsidiary renewing under a consolidated application under § 125.4 (relating to application for affiliates and subsidiaries).
(2) Its Securities and Exchange Commission (SEC) Form 10-K, or equivalent form filed by a foreign corporation with the SEC or the governing body of an internationally recognized public securities exchange for an application being processed under the conditions of § 125.4(e), for the last complete fiscal year, if applicable. The filing of these forms does not serve as a substitute for the full completion of the application form.
(i) They must be presented in conformance with applicable generally accepted accounting principles as promulgated by the Financial Accounting Standards Board or the Government Accounting Standards Board or with international financial reporting standards promulgated by the International Accounting Standards Board. The text of the financial statements and their accompanying notes must be in the English language. If the currency used in the financial statements is not in United States dollars, the applicant shall cooperate and assist the Bureau in converting the currency to United States dollars.
(ii) They must be audited in accordance with generally accepted auditing standards in the United States or in accordance with the standards of the Public Company Accounting Oversight Board (United States) or the International Standards on Auditing. An unqualified or qualified opinion shall be stated on the most recent audited financial statements.
(iii) If the most current audited period precedes the application date by more than 6 months, the applicants latest SEC Form 10-Q, or similar form filed by a foreign corporation with the SEC or the governing body of an internationally recognized public securities exchange for an application being processed under the conditions of § 125.4(e), or unaudited interim financial statements must be submitted.
(4) Audited financial statements covering the applicants second and third most recent complete fiscal-year periods prior to the date of the application, if an initial application. If audited financial statements covering those periods are not available, financial statements reviewed by a certified public accountant in accordance with standards established by the American Institute of Certified Public Accountants or the International Auditing and Assurance Standards Board covering the second and third most recent complete fiscal year periods prior to the date of the application will be accepted.
(5) A report of the paid and incurred workers compensation loss experience in this Commonwealth under each of the 3 completed policy years prior to the application of each employer requesting self-insurance, if an initial application. The loss information for each policy year shall be valued within 3 months prior to the date of the submission of the application.
(6) A report on a form prescribed by the Bureau and provided to each employer requesting self-insurance stating the costs of claims incurred by the employer by annual periods and projecting the total value of its outstanding liability under the act and the Occupational Disease Act, if a renewal application. A renewal applicant that has retained the services of an actuary to project the total value of its outstanding liability may submit the actuarys report with its application.
(7) A report for each employer requesting self-insurance on a form prescribed by the Bureau and provided to each employer requesting self-insurance summarizing the existence of the accident and illness prevention program required under section 1001(b) of the act (77 P. S. § 1038.1) and regulations promulgated thereunder.
(i) All open claims at the time of submission.
(ii) All claims closed on or after September 11, 2010.
(iii) Case reserves provided in the listing must be established according to instructions on forms prescribed by the Bureau and provided to each employer requesting self-insurance.
(9) Written verification of the applicants current long-term credit or debt ratings, if any.
(d) The applicant shall provide additional data, information and explanation that the Bureau deems pertinent to its review of the application based on the factors enumerated under § 125.6(a) (relating to decision on application), and shall make any corrections determined necessary by the Bureau, and provide any items under subsection (c) determined missing or insufficient by the Bureau. The applicant shall provide the data, information, explanation, corrections or missing items within 21 days of its receipt of written notification from the Bureau of its need to do so, or by a later date if requested by the applicant and approved by the Bureau. If the applicant does not provide the data, information, explanation, corrections or missing items within the prescribed time period, the application will be deemed withdrawn. A renewal applicant that does not provide the data, information, explanation, corrections or missing items within the prescribed time period shall obtain workers compensation insurance coverage effective the expiration of that time period and shall provide evidence of the coverage, such as a certificate of insurance, to the Bureau no later than the coverages effective date.
(e) The Bureau will not issue a decision on the application under § 125.6 until the application, including all items required under subsection (c) and all additional data, information, explanation and corrections under subsection (d), have been submitted.
(f) An initial applicants requested self-insurance effective date is subject to the approval of the Bureau. An initial applicant which fails to insure its liability pending review of its application will be subject to prosecution under the act and the Occupational Disease Act.
The provisions of this § 125.3 amended under sections 305(a) and 435(a) of the Workers Compensation Act (77 P. S. § § 501 and 991(a)) and section 2205 of The Administrative Code of 1929 (71 P. S. § 565).
The provisions of this § 125.3 amended October 23, 1998, effective October 24, 1998, apply to applicants, self-insurers, runoff self-insurers, group self-insurance funds and runoff funds, 28 Pa.B. 5459; amended September 10, 2010, effective September 11, 2010, 40 Pa.B. 5147. Immediately preceding text appears at serial pages (250122) to (250124).
This section cited in 34 Pa. Code § 125.4 (relating to application for affiliates and subsidiaries); 34 Pa. Code § 125.6 (relating to decision on application); and 34 Pa. Code § 125.7 (relating to permit).
§ 125.4. Application for affiliates and subsidiaries.
(a) An affiliate or subsidiary may be included under an application submitted by another affiliate or its parent company by providing information and data on the affiliate or subsidiary on a separate form prescribed by and available upon request from the Bureau. The related entities will be included under one consolidated permit if the application is approved. A written notification shall be provided by the applicant to delete an affiliate or a subsidiary from a consolidated permit after its issuance.
(b) An applicant shall provide a written agreement adopted by its board of directors on a form prescribed by the Bureau which states that the applicant guarantees the payment of all claims incurred by the affiliates or subsidiaries. The applicant shall further assume liability for the payment of an affiliates or subsidiarys claims incurred during its period of self-insurance upon termination of the affiliate or parent-subsidiary relationship unless the applicant is relieved of this liability by the Bureau. In determining whether to relieve an applicant of a subsidiarys or affiliates liability, the Bureau will consider, among other things, the financial ability of the new owner of the subsidiary or affiliate to pay the liabilities, the new owners credit worthiness and the adequacy of security held by the Bureau covering the liability.
(c) The guarantor may not terminate the agreement under any circumstances without first giving the Bureau and the affected affiliate or subsidiary 45 days written notice. The affiliates or subsidiarys self-insurance status automatically terminates upon expiration of the 45-day notice period.
(d) Except as provided in § 125.4(e), if an affiliate or subsidiary not included under a consolidated application as outlined in subsection (a) wishes to self-insure, it shall submit an application in its own name and provide its own audited financial statements in the manner indicated in § 125.3 (relating to application). The Bureau may require the parent company to furnish appropriate financial information within 21 days of its receipt of written notification from the Bureau of its need to do so, or by a later date if requested by the applicant and approved by the Bureau.
(e) If the applicant is a subsidiary of a parent company that is not incorporated or organized under the laws of a state of the United States, the applicant may submit its parent companys consolidated audited financial statements and an unaudited consolidated balance sheet of the applicants financial condition, or other financial information on the applicant that the Bureau deems pertinent to its review of the application, to satisfy the financial reporting requirements of § 125.3(c), provided the parent companys audited financial statements comply with § 125.3(c)(3)(i) and (ii).
The provisions of this § 125.4 amended under sections 305(a) and 435(a) of the Workers Compensation Act (77 P. S. § § 501 and 991(a)) and section 2205 of The Administrative Code of 1929 (71 P. S. § 565).
The provisions of this § 125.4 amended September 10, 2010, effective September 11, 2010, 40 Pa.B. 5147. Immediately preceding text appears at serial pages (250124) to (250125).
This section cited in 34 Pa. Code § 125.2 (relating to definitions); 34 Pa. Code § 125.3 (relating to application); 34 Pa. Code § 125.6 (relating to decision on application); 34 Pa. Code § 125.9 (relating to security requirements); and 34 Pa. Code § 125.15 (relating to workers compensation liability).
(a) An applicant shall have been in business for at least 3 consecutive years prior to application.
(b) An applicant shall be incorporated or organized under the laws of a state of the United States.
(c) Each employer requesting self-insurance shall have an adequate accident and illness prevention program.
The provisions of this § 125.5 amended under sections 305(a) and 435(a) of the Workers Compensation Act (77 P. S. § § 501 and 991(a)) and section 2205 of The Administrative Code of 1929 (71 P. S. § 565).
The provisions of this § 125.5 amended September 10, 2010, effective September 11, 2010, 40 Pa.B. 5147. Immediately preceding text appears at serial page (250125).
This section cited in 34 Pa. Code § 125.6 (relating to decision on application).
§ 125.6. Decision on application.
(a) The application of an applicant which meets the requirements of § 125.5 (relating to preliminary requirements) will be approved if the Bureau determines that the applicant has demonstrated that it possesses the financial ability to self-insure.
(i) The retention amount of the applicants current or proposed excess insurance equals or is less than its authorized retention amount.
(ii) The applicants catastrophic loss estimation is equal to or is less than its maximum quick assets exposure amount.
(i) If a public employer, the applicant satisfies or will satisfy the requirements established for it under § 125.10 (relating to funding by public employers).
(A) The applicant, or its parent company for an application being processed under the conditions of § 125.4(e) (relating to application for affiliates and subsidiaries), possesses an investment-grade long-term credit or debt rating, or such a rating that is one generic rating classification below investment grade.
(B) For an applicant who does not receive a long-term credit or debt rating by an NRSRO, or whose parent company does not receive a long-term credit or debt rating by an NRSRO for an application being processed under the conditions of § 125.4(e), the Bureau estimates that the applicant, or its parent company for an application being processed under the conditions of § 125.4(e), would merit an investment grade long-term credit or debt rating, or a rating that is one generic rating classification below investment grade, if it were rated.
(C) An applicant that was approved to self-insure as of September 11, 2010, that possesses an actual or Bureau-estimated long-term credit or debt rating more than one generic rating classification below investment grade shall be deemed to possess adequate financial health if its generic rating does not decline further. This clause will no longer apply if the applicants actual or Bureau-estimated long-term credit or debt rating subsequently increases to one generic rating classification below investment grade or higher.
(i) The applicants financial statements, or its parent companys financial statements for an application being processed under the conditions of § 125.4(e), which may include comparisons of the applicants or its parent companys financial ratios to general or to industry ratios and cash flow analysis.
(ii) Public documents and reports filed with other state and Federal agencies including the United States Securities and Exchange Commission.
(iii) Other financial analysis information provided to or considered by the Bureau, including financial analysis comparison databases and evaluation models.
(2) The amount of the applicants quick assets at the end of its last 2 completed fiscal years as shown on the financial statements provided to the Bureau under § 125.3(c) (relating to application) or under § 125.4(e).
(3) The terms, conditions and limits of the applicants existing or proposed excess insurance.
(4) For a public employer, its ability to satisfy or its past history in satisfying the requirements established under § 125.10.
(c) If the Bureau finds under subsection (a) that the applicant possesses the financial ability to self-insure, it will send to the applicant an initial decision approving the application and a list of conditions as set forth under subsection (c)(2) that must be met before the applicant will be issued a permit. The Bureau will issue a permit to a renewal applicant at the time of the initial decision when the renewal applicant is currently in compliance with the conditions set forth by the Bureau.
(1) An applicant has 45 days from the receipt of the initial decision approving the application to comply with the conditions set forth by the Bureau.
(i) The applicant may toll the 45-day compliance period by filing a request for a conference or notification of its intent to submit additional written information under subsection (e).
(ii) An applicant may be granted a 30-day extension to meet the conditions if the applicant requests an extension in writing. The Bureau must receive the extension request within the initial 45-day compliance period.
(iii) Unless a timely reconsideration is initiated under subsection (e), when the applicant does not meet the conditions within this compliance period, the application will be deemed denied.
(iv) A renewal applicant that does not meet the conditions within this compliance period and that has not timely initiated the procedures outlined in subsection (e) shall obtain workers compensation insurance coverage effective the expiration date of the compliance period and provide evidence of the coverage, such as a certificate of insurance, to the Bureau no later than the coverages effective date.
(i) Security in an amount as set forth in § 125.9 (relating to security requirements) or funding as set forth in § 125.10.
(ii) A certificate providing evidence that the applicant has obtained excess insurance coverage with limits set forth under § 125.11(a) (relating to excess insurance), if required.
(iii) A guarantee agreement executed by its parent company or an affiliate as set forth in § 125.4, if required.
(iv) Contact information on the claims service company or in-house staff that will be handling the applicants claims.
(v) Documents relating to any other requirement set by the Bureau to protect the compensation rights of employees.
(d) If an applicant does not meet the requirements of § 125.5 or if upon review under subsection (a) the Bureau finds that the applicant has not demonstrated that it possesses the financial ability to self-insure, the Bureau will send to the applicant an initial decision denying the application. The initial decision will state the documents, data, information, explanation and corrections received from the applicant or otherwise reviewed or considered by the Bureau in rendering its initial decision. A renewal applicant shall obtain workers compensation insurance coverage effective no later than 30 days after its receipt of an initial decision denying the renewal application and shall provide evidence of the coverage, such as a certificate of insurance, to the Bureau no later than the coverages effective date, unless the applicant has timely initiated the procedures outlined in subsection (e).
(e) The applicant may request a conference with the Bureau to submit additional materials to support its application or the alteration of the conditions required in the initial decision, or to challenge the accuracy of underlying calculations made or data considered by the Bureau in its decision or conditions. The applicant may also notify the Bureau of its intention to submit these materials directly in writing without a conference. The Bureau must receive a request or notification within 20 days of the date of the Bureaus initial decision.
(1) Upon its receipt of the request or notification, the Bureau will schedule a conference. If a conference is not requested, the applicant shall provide the additional materials within 21 days of its receipt of written notification from the Bureau of its need to do so, or by a later date if requested by the applicant and approved by the Bureau.
(2) The prior permit of a renewal applicant that has filed a timely request for a conference or notification of intent to submit additional materials will be automatically extended beyond the permits original expiration date until the Bureau issues a reconsideration decision on the renewal application under subsection (f). During the time the permit is extended, the prior conditions established by the Bureau, as set forth under subsection (c)(2), shall continue to apply.
(f) After a conference or the receipt of additional materials, the Chief of the Self-Insurance Division of the Bureau will review the entire record of the application and will issue a reconsideration decision on the application.
(1) The applicant shall have 30 days from its receipt of a reconsideration decision approving an application to comply with any conditions set forth by the Bureau in that decision.
(i) Unless a timely appeal is filed under subsection (g), when the applicant does not meet the conditions within this 30-day period, the application will be deemed denied.
(ii) A renewal applicant that does not meet the conditions within this 30-day period shall obtain workers compensation insurance coverage effective the expiration of the compliance period and shall provide evidence of the coverage, such as a certificate of insurance, to the Bureau no later than the coverages effective date, unless the applicant has timely initiated the procedures outlined in subsection (g).
(2) Upon the issuance of a reconsideration decision denying a renewal application, the renewal applicant shall obtain workers compensation insurance coverage effective no later than 30 days after its receipt of the reconsideration decision and provide evidence of the coverage, such as a certificate of insurance, to the Bureau no later than the coverages effective date unless the applicant has timely initiated the procedures outlined in subsection (g).
(g) An applicant shall have the right to appeal a reconsideration decision issued under subsection (f). The Bureau must receive the appeal within 30 days of the date of the reconsideration decision. The prior permit of a renewal applicant that filed a timely appeal shall be automatically extended beyond the permits original expiration date, until a presiding officer issues a written decision on the appeal. During the time the permit is extended, the prior conditions established by the Bureau, as set forth under subsection (c)(2), shall continue to apply. Untimely appeals will be dismissed without further action by the Bureau.
(1) The Director of the Bureau will assign the appeal to a presiding officer who will schedule a hearing on the appeal from the reconsideration decision. The presiding officer will provide notice to the parties of the hearing date, time and place.
(2) The hearing will be conducted under this subsection and 1 Pa. Code Part II (relating to General Rules of Administrative Practice and Procedure) to the extent not superseded in paragraph (6). The presiding officer will not be bound by strict rules of evidence.
(3) Hearings will be stenographically-recorded. The transcript of the proceedings will be part of the record.
(4) The presiding officer will issue a written decision and order under 1 Pa. Code Chapter 35, Subchapters G and H (relating to proposed reports; and agency action) to the extent not superseded in paragraph (6). The presiding officer will determine whether the Bureau abused its discretion or acted arbitrarily in the reconsideration decision. The applicant has the burden to prove that the Bureau abused its discretion or acted arbitrarily in the reconsideration decision.
(5) A party aggrieved by a decision rendered by the presiding officer may appeal the decision to Commonwealth Court.
(6) This subsection supersedes 1 Pa. Code § § 35.131, 35.190, 35.201, 35.21135.214 and 35.221.
(h) An applicant which has been denied self-insurance may reapply after audited financial statements are published subsequent to the latest ones submitted with the denied application.
The provisions of this § 125.6 amended under sections 305(a) and 435(a) of the Workers Compensation Act (77 P. S. § § 501 and 991(a)) and section 2205 of The Administrative Code of 1929 (71 P. S. § 565).
The provisions of this § 125.6 amended September 10, 2010, effective September 11, 2010, 40 Pa.B. 5147. Immediately preceding text appears at serial pages (250125) to (250128).
This section cited in 34 Pa. Code § 125.2 (relating to definitions); 34 Pa. Code § 125.3 (relating to application); 34 Pa. Code § 125.7 (relating to permit); 34 Pa. Code § 125.10 (relating to funding by public employers); 34 Pa. Code § 125.16 (relating to reporting by runoff self-insurer); and 34 Pa. Code § 125.19 (relating to additional powers of Bureau and orders to show cause).
(a) A permit is issued for 1 year, except that the Bureau may shorten or extend the effective period of a permit by not more than 6 months to facilitate the filing of timely financial statements or other data and information required with the next renewal application.
(b) If the Bureau fails to issue an initial decision with respect to a renewal application under § 125.6 (relating to decision on application) prior to the expiration of the permit for the prior year, the prior permit will be automatically extended under the prior conditions as set forth under § 125.6(c)(2) beyond the permits original expiration date, until a decision on the renewal application is issued by the Bureau. This automatic extension applies only in cases when the renewal application has been timely filed under § 125.3 (relating to application) and the applicant has submitted or is submitting all data, information, explanation, corrections and missing items, or has corrected or is correcting inaccurate data, within the time period prescribed in writing by the Bureau.
(c) If a renewal applicants permit for the prior year expires while the applicant is in the process of satisfying conditions set forth in an initial or reconsideration decision, the prior permit will be automatically extended beyond its original expiration date, pending satisfaction of the conditions within the time period set forth under the applicable provisions of § 125.6.
The provisions of this § 125.7 amended under sections 305(a) and 435(a) of the Workers Compensation Act (77 P. S. § § 501 and 991(a)) and section 2205 of The Administrative Code of 1929 (71 P. S. § 565).
The provisions of this § 125.7 amended September 10, 2010, effective September 11, 2010, 40 Pa.B. 5147. Immediately preceding text appears at serial page (250128).
The provisions of this § 125.8 reserved under sections 305(a) and 435(a) of the Workers Compensation Act (77 P. S. § § 501 and 991(a)) and section 2205 of The Administrative Code of 1929 (71 P. S. § 565).
The provisions of this § 125.8 reserved September 10, 2010, effective September 11, 2010, 40 Pa.B. 5147. Immediately preceding text appears at serial page (250128).
(a) A private employer shall provide security in an amount as set forth in subsection (d). The security required in this section is not a substitute for the applicant demonstrating its financial ability to self-insure. A self-insurers security may be adjusted annually or more frequently as determined by the Bureau.
(1) A surety bond on a form prescribed by and available upon request from the Bureau issued by a company authorized to transact surety business in this Commonwealth by the Insurance Department.
(i) At the time of the issuance of the bond, the surety company shall possess a current A. M. Best Rating of A- or better or a Standard & Poors insurers financial strength rating of A or better or a comparable rating by another NRSRO.
(ii) The self-insurer shall replace the bond with a new bond issued by a surety company with an acceptable rating or with another acceptable form of security if the surety companys highest rating falls below an A. M. Best Rating of B+, a Standard & Poors insurers financial strength rating of A- or a comparable rating by another NRSRO after the bond is issued. If the bond is not replaced within 45 days of the self-insurers receipt of written notification of the rating decline from the Bureau, the Bureau will have discretion to draw on the surety bond and deposit the proceeds with the State Treasurer to secure the self-insurers liability and to revoke the current permit if the bond exclusively secures claims currently being incurred against the self-insurer.
(iii) An active self-insurer that does not post another bond or another acceptable form of security to cover claims currently being incurred against the self-insurer, after the surety of a bond that exclusively secures the claims provides notification of its intention to terminate the bond, shall obtain workers compensation insurance coverage effective the bonds termination date. The self-insurer shall provide evidence of the coverage, such as a certificate of insurance, to the Bureau no later than the coverages effective date.
(i) The deposit must consist of cash; bonds or other evidence of indebtedness issued, assumed or guaranteed by the United States of America, or by an agency or instrumentality of the United States; investments in common funds or regulated investment companies which invest primarily in United States Government or Government agency obligations; or bonds or other security issued by the Commonwealth and backed by the Commonwealths full faith and credit.
(ii) The securities must be held in a Commonwealth chartered bank and trust company or trust company as defined in section 102 of the Banking Code of 1965 (7 P. S. § 102) or a Federally-chartered bank or foreign bank with a branch office and trust powers in this Commonwealth.
(3) An irrevocable letter of credit using language required by the Bureau issued by and payable at a branch office of a commercial bank located in the continental United States. The letter of credit must state that the terms of the letter of credit automatically renew annually unless the letter of credit is specifically nonrenewed by the issuing bank 60 days or more prior to the anniversary date of its issuance.
(i) At the time of issuance of the letter of credit, the issuing bank or its holding company shall have a B/C or better rating or 2.5 or better credit evaluation score by Fitch Ratings, as successor to the rating services of Thomson BankWatch, or the issuing bank shall have a CD or long-term issuer credit rating of BBB or better or a short-term issuer credit rating of A-2 or better by Standard & Poors or a comparable rating by another NRSRO.
(ii) The self-insurer shall replace the letter of credit with a new letter of credit issued by a bank with an acceptable credit rating or with another acceptable form of security if the issuing banks highest rating falls below the acceptable rating outlined in subparagraph (i) after the letter of credit is issued. If the letter of credit is not replaced within 45 days, the Bureau will draw on the letter of credit and will deposit the proceeds to secure the self-insurers liability.
(c) Affiliates included under a consolidated permit under § 125.4(a) (relating to application for affiliates and subsidiaries) must be included together under the forms of security provided. For purposes of this section, affiliates that are runoff self-insurers are considered to be active self-insurers if they were included under a consolidated permit with affiliates that remain active self-insurers.
(d) The amount of security required of private employers is determined as set forth in paragraphs (1)(6).
(i) An amount no less than two times the amount of the applicants total greatest annual insured incurred workers compensation losses in this Commonwealth during the last 3 completed policy years prior to its application, or the minimum security amount, whichever is greater.
(ii) Discounted by the percentage outlined under subsection (l) for the applicants highest current long-term credit or debt rating, if any.
(iii) Rounded upward to the nearest hundred thousand.
(A) The amount outlined in paragraph (1).
(B) One hundred percent of the Bureaus calculation of the self-insurers undiscounted outstanding liability based on loss development, net of workers compensation excess insurance recoveries.
(i) One hundred percent of the Bureaus calculation of the self-insurers undiscounted outstanding liability based on loss development, net of workers compensation excess insurance recoveries, or the minimum security amount, whichever is greater.
(i) The sum of each individual affiliates required amount of security as calculated under the applicable paragraphs above but excluding the effects of any rounding or minimum applicable to the individual affiliates, or the minimum security amount, whichever is greater.
(i) One hundred percent of the Bureaus calculation of the runoff self-insurers undiscounted outstanding liability based on loss development, net of workers compensation excess insurance recoveries.
(ii) Discounted by the percentage outlined under subsection (l) for the runoff self-insurers or its guarantors highest current long-term credit or debt rating, if any.
(A) The nearest ten thousand if the Bureaus calculated undiscounted outstanding liability, net of workers compensation excess insurance recoveries, discounted by the percentage outlined under subsection (l) for the runoff self-insurers or its guarantors highest current long-term credit or debt rating, if any, is $50,000 or less.
(B) The nearest hundred thousand.
(i) The sum of each individual runoff self-insurers required amount of security as calculated under paragraph (5) but excluding the effects of any rounding applicable to the individual runoff self-insurers.
(ii) Discounted by the percentage outlined under subsection (l) for the runoff self-insurers or their guarantors highest current long-term credit or debt rating, if any.
(A) The nearest ten thousand if the Bureaus calculated undiscounted outstanding liability, net of workers compensation excess insurance recoveries, discounted by the percentage outlined under subsection (l) for the runoff self-insurers or their guarantors highest current long-term credit or debt rating, if any, is $50,000 or less.
(e) A self-insurer wishing to refute the Bureaus adjustment of its outstanding liability by its history of loss development may do so by providing a report prepared by an actuary.
(f) The Bureau will incorporate the overall Pennsylvania workers compensation experience of insured or self-insured employers in the self-insurers industry or of all insured or self-insured employers in its selection of loss development factors under subsection (d) if the claim volume or experience of the self-insurer is not sufficient to be considered fully credible based on generally accepted actuarial procedures. The loss development factors selected by the Bureau and its other judgments in its calculation of a self-insurers outstanding liability will be sufficiently conservative to ensure the adequate provision of security.
(g) The Bureau will make adjustments to the loss development procedures under subsection (d) it deems appropriate under the circumstances if the Bureau believes that a self-insurer has changed its reserving methodology in such a way as to invalidate loss development factors based on past experience.
(h) The Bureau may reduce the amount of security required of a self-insurer under subsection (d) if the self-insurer confirms that liabilities under the act and the Occupational Disease Act are funded through a Black Lung Benefits Trust established under section 501(c)(21) of the Internal Revenue Code of 1986 (26 U.S.C.A. § 501(c)(21)).
(1) The trust agreement must be in a form prescribed by the Bureau.
(2) The trust assets must be held in a Commonwealth chartered bank and trust company or trust company as defined in section 102 of the Banking Code of 1965 or a Federally chartered bank or foreign bank with a branch office and trust powers in this Commonwealth.
(3) The value of the trust fund must be adjusted at least annually to the required funding level as determined by the Bureau.
(j) A self-insurer with security which is less than the level of security required under subsection (d) may be permitted to phase in the level of required security over a maximum of 2 years. The Bureau will determine the terms of the phase-in period, including the length of time and the annual phase-in amounts.
(1) The runoff self-insurer provides evidence that its liability was assumed under a self-insurance loss portfolio transfer policy.
(2) If the runoff self-insurer made no payments on its liability over the past 2 years and all claims against the runoff self-insurer are closed.
(m) The Bureau may revise the table in subsection (l) through publication of a notice in the Pennsylvania Bulletin to assign security discount rates for any organization receiving designation as a NRSRO after September 11, 2010.
The provisions of this § 125.9 amended under sections 305(a) and 435(a) of the Workers Compensation Act (77 P. S. § § 501 and 991(a)) and section 2205 of The Administrative Code of 1929 (71 P. S. § 565).
The provisions of this § 125.9 amended October 23, 1998; subsections (a) and (b) apply to applicants, self-insurers, runoff self-insurers, group self-insurance funds and runoff funds and become effective upon publication in the Pennsylvania Bulletin; subsections (d), (i) and (l) apply to self-insurers upon commencement of the exemption period subsequent to final publication in the Pennsylvania Bulletin; subsection (m) applies to a runoff self-insurer commencing that status after it has renewed its permit subsequent to final publication in the Pennsylvania Bulletin, 28 Pa.B. 5459; amended September 10, 2010, effective September 11, 2010, 40 Pa.B. 5147. Immediately preceding text appears at serial pages (250128) to (250132).
This section cited in 34 Pa. Code § 125.6 (relating to decision on application); and 34 Pa. Code § 125.10 (relating to funding by public employers).
§ 125.10. Funding by public employers.
(a) A self-insured public employer shall establish and maintain a dedicated asset account to provide a source of funds for the payment of benefits and other obligations and expenses relating to its self-insurance program. This section does not apply to a runoff self-insured public employer whose average annual payout of benefits on self-insurance claims over its last 3 completed fiscal years, net of workers compensation excess insurance recoveries, is less than the current Statewide average weekly wage multiplied by 100.
(1) An amount greater than or equal to 20% of the public employers modified manual premium calculated in accordance with § 125.202 (relating to definitions) or the minimum funding amount, whichever is greater.
(2) Discounted by the percentage outlined under § 125.9(l) (relating to security requirements) for the self-insurers highest current long-term credit or debt rating, if any.
(3) The dedicated asset account must equal the above prescribed asset level no later than 30 days before the effective date of the public employers initial permit and may not be reduced below this asset level for the first 3 years of self-insurance.
(i) The self-insurers greatest annual fiscal year payout of benefits since its initial approval to self-insure, net of workers compensation excess insurance recoveries, plus 20% of that annual payment amount.
(ii) The minimum funding amount.
(2) Discounted by the percentage outlined under § 125.9(l) for the self-insurers highest current long-term credit or debt rating, if any.
(3) The dedicated asset account must be equal to or exceed the prescribed asset level 120 days before the beginning of the self-insurers next fiscal year or by a later date if requested by the applicant and approved by the Bureau.
(4) Prior to issuing a permit under § 125.6(c) (relating to decision on application), the Bureau will require that the asset level of a self-insurers dedicated asset account under paragraphs (1) and (2) be based on an adjustment to the self-insurers greatest annual benefit payout amount to correct any material underpayment of benefits the Bureau believes is the result of the self-insurers failure to pay compensation for which it is liable during the evaluation period.
(i) The self-insurers average annual payout of benefits over its three most recent completed fiscal years, net of workers compensation excess insurance recoveries, plus 20% of that average payment amount.
(i) The amount required to be in the dedicated asset account under paragraphs (1) and (2) for the current year.
(ii) Minus the difference between the amount required to be in the dedicated asset account under paragraphs (1) and (2) as of September 11, 2010, and the actual asset value of the dedicated asset account as of September 11, 2010.
(4) The dedicated asset account must equal or exceed the prescribed asset level 120 days before the beginning of the self-insurers next fiscal year or by a later date if requested by the applicant and approved by the Bureau.
(5) Prior to issuing a permit under § 125.6(c), the Bureau will require that the asset level of a self-insurers dedicated asset account under paragraphs (1) and (2) be based on an adjustment to the self-insurers average annual payout of benefits to correct any material underpayment of benefits the Bureau believes is the result of the self-insurers failure to pay compensation for which it is liable during the evaluation period.
(e) For a runoff self-insured public employer, the asset level of the dedicated asset account established under subsection (a) is that outlined under subsection (d), except that the minimum funding amount does not apply.
(f) If a self-insured public employer does not possess an investment grade long-term credit or debt rating, the Bureau may require that the asset level of its dedicated asset account established under subsection (a) be greater than that outlined under subsection (b), (c) or (d), in any amount which the Bureau determines will guaranty that the self-insurer will have sufficient funding to meet its claims payments and other obligations and expenses relating to its self-insurance program as they come due over the self-insurers next fiscal year.
The provisions of this § 125.10 amended under sections 305(a) and 435(a) of the Workers Compensation Act (77 P. S. § § 501 and 991(a)) and section 2205 of The Administrative Code of 1929 (71 P. S. § 565).
The provisions of this § 125.10 amended September 10, 2010, effective September 11, 2010, 40 Pa.B. 5147. Immediately preceding text appears at serial page (250132).
(a) An applicant whose catastrophic loss estimation is greater than its maximum quick assets exposure amount shall obtain aggregate excess insurance or specific excess insurance with a retention amount that is no more than its authorized retention amount and a liability limit acceptable to the Bureau to provide an adequate level of protection to cover the losses from a catastrophic event. The Bureau will consider the financial capacity of the applicant and the amount of the catastrophic loss estimation in determining the adequacy of the applicants proposed liability limit.
(i) It must state that it is not cancelable or nonrenewable unless written notice by registered or certified mail is given to the other party to the policy and to the Bureau at least 45 days before termination by the party desiring to cancel or not renew the policy.
(ii) It must state that it applies to any losses of a self-insurer under the act or the Occupational Disease Act.
(iii) It may not exclude coverage for any categories of injuries or diseases compensable under the act and the Occupational Disease Act.
(iv) It must be issued by an insurer that possesses an A. M. Best rating of A- or better, or a Standard & Poors insurer financial strength rating of A or better, or a comparable rating by another NRSRO.
(i) It must meet the requirements of paragraph (1)(i)(iii).
(ii) It must state that if a self-insurer is unable to make benefit payments under the act and the Occupational Disease Act due to insolvency or bankruptcy, the excess carrier shall make payments to other parties involved in the paying of the self-insurers liability, as directed by the Bureau, subject to the policys retentions and limits.
(A) Payments made by the employer.
(B) Payments made on behalf of the employer under a surety bond or other forms of security as required under this subchapter.
(C) Payments made by the Self-Insurance Guaranty Fund.
(iv) It must be issued by a workers compensation insurer that includes the premium collected for the insurance in data used by the Workers Compensation Security Fund set forth in the Workers Compensation Security Fund Act (77 P. S. § § 10511066) to calculate assessments against workers compensation insurers to finance the operations of that fund.
(c) A certificate of the excess insurance obtained by the self-insurer must be filed with the Bureau together with a certification that the policy fully complies with subsection (b).
The provisions of this § 125.11 amended under sections 305(a) and 435(a) of the Workers Compensation Act (77 P. S. § § 501 and 991(a)) and section 2205 of The Administrative Code of 1929 (71 P. S. § 565).
The provisions of this § 125.11 amended September 10, 2010, effective September 11, 2010, 40 Pa.B. 5147. Immediately preceding text appears at serial pages (250132) to (250133).
This section cited in 34 Pa. Code § 125.2 (relating to definitions); and 34 Pa. Code § 125.6 (relating to application).
§ 125.12. Payment, handling and adjusting of claims.
(a) A self-insurer and its claims service company are responsible for the prompt payment of compensation in accordance with the act, the Occupational Disease Act and this part.
(b) A self-insurer shall have ample facilities and competent personnel within its organization to service its program of claims handling and adjusting or shall contract with a registered claims service company to provide these services.
(c) A self-insurer shall immediately notify the Bureau when it changes arrangements for the handling or adjusting of its claims, including the initiation, modification or termination of self-administration arrangements or the initiation, termination, expiration or modification of services with a registered claims services company. The self-insurer shall file with the Bureau a summary of data on its claims, such as cumulative payments sorted by year of loss, in a format prescribed by the Bureau and provided to the self-insurer within 21 days of its receipt of written notification from the Bureau of its need to do so.
The provisions of this § 125.12 amended under sections 305(a) and 435(a) of the Workers Compensation Act (77 P. S. § § 501 and 991(a)) and section 2205 of The Administrative Code of 1929 (71 P. S. § 565).
The provisions of this § 125.12 amended September 10, 2010, effective September 11, 2010, 40 Pa.B. 5147. Immediately preceding text appears at serial page (250134).
§ 125.13. Special funds assessments.
(1) The Workmens Compensation Administration Fund.
(2) The Subsequent Injury Fund.
(3) The Workmens Compensation Supersedeas Fund.
(4) The Self-Insurance Guaranty Fund.
(5) The Uninsured Employers Guaranty Fund.
(b) A runoff self-insurer is liable for the payment of any assessments made after the termination or revocation of its self-insurance status until it has discharged the obligations to pay compensation which arose during the period of time it was self-insured. The assessments of a runoff self-insurer shall be based on the payment of claims that arose during the period of its self-insurance status.
(c) A self-insurer shall keep accurate records of compensation paid on a calendar year basis, including payment for disability of all types, death benefits, medical benefits and funeral expenses, for the purposes of assessments under the act and the Occupational Disease Act. The records must be available for audit or physical inspection by Bureau employees or other designated persons, whether in the possession of the self-insurer or a service company. If the Bureau has a reasonable basis to question the annual compensation payments reported by the self-insurer, it may require the self-insurer to retain the services of the self-insurers licensed certified public accounting firm to audit the data reported to provide confirmation or make necessary adjustments.
The provisions of this § 125.13 amended under sections 305(a) and 435(a) of the Workers Compensation Act (77 P. S. § § 501 and 991(a)) and section 2205 of The Administrative Code of 1929 (71 P. S. § 565).
The provisions of this § 125.13 amended September 10, 2010, effective September 11, 2010, 40 Pa.B. 5147. Immediately preceding text appears at serial page (250134).
§ 125.14. Change in legal status, ownership or financial condition.
(a) A self-insurer shall submit promptly a renewal application to continue its self-insurance status under this subchapter in the event of a change in its or its parents controlling interest, by sale or otherwise. Failure to comply with this subsection may result in the revocation of the self-insurers permit.
(b) A self-insurer which amends its articles, charter or agreement of incorporation, association, partnership or sole proprietorship to change its identity or business structure shall promptly notify the Bureau in writing of that action. The Bureau may request copies of documents or information deemed necessary to determine whether the transaction has affected the ability of the employer to self-insure.
(c) A self-insurer shall promptly notify the Bureau in writing of any material adverse changes to its financial condition which occur after the date of the most recent financial statements submitted with its last application.
§ 125.15. Workers compensation liability.
(a) Notwithstanding the terms of a guarantee and assumption agreement executed under § 125.4(b) (relating to application for affiliates and subsidiaries), a self-insurer or a runoff self-insurer remains liable for workers compensation on injuries or disease exposures occurring during its period of self-insurance. With application to and permission from the Bureau, liability can be transferred to another employer. Liability also may be transferred through a self-insurance loss portfolio transfer policy.
(b) A self-insurer which liquidates or dissolves shall transfer its liability to a third party, subject to the approval of the Bureau, or shall obtain a self-insurance loss portfolio transfer policy covering the liability.
(c) If a self-insurer sells or divests a part of itself, self-insurance coverage ends for the separated parts on the date of separation. The self-insurer remains liable for claims incurred against the separated part occurring up to the date of separation unless the Bureau approves a request to transfer the self-insurers liability to another entity.
The provisions of this § 125.15 amended under sections 305(a) and 435(a) of the Workers Compensation Act (77 P. S. § § 501 and 991(a)) and section 2205 of The Administrative Code of 1929 (71 P. S. § 565).
The provisions of this § 125.15 amended September 10, 2010, effective September 11, 2010, 40 Pa.B. 5147. Immediately preceding text appears at serial page (250135).
§ 125.16. Reporting by runoff self-insurer.
(a) A runoff self-insurer shall file an annual report with the Bureau by a date prescribed by the Bureau on a prescribed form provided by the Bureau until all cases incurred during its period of self-insurance have been closed for at least 2 years.
(iii) Case reserves provided in the listing must be established according to the instructions on forms prescribed by the Bureau and provided to the runoff self-insurer.
(c) A runoff self-insurer that is a private employer shall make any request for the adjustment of its amount of security in writing when it submits its runoff report. If the runoff self-insurer disagrees with the Bureaus decision on the request, it may request reconsideration of this decision under § 125.6(e) (relating to decision on application).
The provisions of this § 125.16 amended under sections 305(a) and 435(a) of the Workers Compensation Act (77 P. S. § § 501 and 991(a)) and section 2205 of The Administrative Code of 1929 (71 P. S. § 565).
The provisions of this § 125.16 amended October 23, 1998, effective October 24, 1998, apply to applicants, self-insurers, runoff self-insurers, group self-insurance funds and runoff funds, 28 Pa.B. 5459; amended September 10, 2010, effective September 11, 2010, 40 Pa.B. 5147. Immediately preceding text appears at serial page (250135).
§ 125.17. Claims service companies.
(a) A claims service company desiring to engage in the business of adjusting and handling claims for an approved self-insurer shall register with the Bureau as provided under section 441(c) of the act (77 P. S. § 997(c)) and regulations thereunder on a prescribed form before entering into a contract to provide these services. The claims service company shall answer the questions on the registration form and swear to the information provided on the form.
(b) A claims service company shall have adequate facilities and employ competent staff to provide claims services in a manner which fulfills a self-insurers obligations under the act, the Occupational Disease Act and this part. A claims service company which repeatedly or unreasonably fails to provide claims adjusting or services promptly with the result that compensation is not paid as required under the act or the Occupational Disease Act may have its privilege of conducting this business revoked or suspended under the procedures of section 441(c) of the act.
(c) The claims service company shall employ at least one person on a full-time basis who has the knowledge and experience necessary to service claims properly under the act and the Occupational Disease Act. A resume covering that persons background must be attached to the registration form of the claims service company.
(d) A claims service company whose engagement to handle or adjust the claims of a self-insurer is terminating or expiring, or has terminated or expired, shall provide reasonable assistance to the self-insurer and the Bureau in providing data and information on the claims serviced to maintain the integrity of past data on the claims filed with the Bureau, to rectify or explain discrepancies or questions on the claims data raised by the Bureau, or to address other related issues identified by the Bureau.
The provisions of this § 125.17 amended under sections 305(a) and 435(a) of the Workers Compensation Act (77 P. S. § § 501 and 991(a)) and section 2205 of The Administrative Code of 1929 (71 P. S. § 565).
The provisions of this § 125.17 amended September 10, 2010, effective September 11, 2010, 40 Pa.B. 5147. Immediately preceding text appears at serial pages (250135) to (250136).
A self-insurer shall provide the Bureau with the name, title, address and phone number of a contact person who will be the liaison with the Bureau regarding all self-insurance matters, including the processing of applications, the provision of information and the payment of assessments, and to whom self-insurance correspondence will be sent. The self-insurer shall give written notice of a change in contact person or change in address or telephone number within 10 days of this change.
§ 125.19. Additional powers of Bureau and orders to show cause.
(1) The Bureaus letter is treated for procedural purposes as if it were an initial decision denying a renewal application under § 125.6(d) (relating to decision on application).
(2) When the Bureau determines that the self-insurer no longer possesses the financial ability to self-insure, the self-insurers current permit will be revoked, unless the self-insurer timely initiates the procedures outlined under § 125.6(e)(g).
(3) The self-insurer shall obtain workers compensation insurance coverage effective no later than 30 days after its receipt of a notice of revocation by the Bureau and provide evidence of the coverage, such as a certificate of insurance, to the Bureau no later than the coverages effective date.
(b) The Department may serve upon a self-insurer an order to show cause why its self-insurance status should not be suspended or revoked under section 441(b) of the act (77 P. S. § 997(b)) for unreasonably failing to pay compensation for which it is liable, or for failing to submit any report or to pay any assessment made under the act.
(1) The order to show cause proceedings are governed by provisions in Chapter 121 (relating to general provisions), found in § 121.27 (relating to orders to show cause).
(2) The self-insurer shall obtain workers compensation insurance coverage effective no later than 30 days after its receipt of an order revoking or suspending its self-insurance status and provide evidence of the coverage, such as a certificate of insurance, to the Department no later than the coverages effective date.
The provisions of this § 125.19 amended under sections 305(a) and 435(a) of the Workers Compensation Act (77 P. S. § § 501 and 991(a)) and section 2205 of The Administrative Code of 1929 (71 P. S. § 565).
The provisions of this § 125.19 amended September 10, 2010, effective September 11, 2010, 40 Pa.B. 5147. Immediately preceding text appears at serial page (250136).
§ 125.20. Computation of time.
Except as otherwise provided by law, in computing a period of time prescribed or allowed by this chapter, the day of the act, event or default after which the designated period of time begins to run may not be included. The last day of the period so computed shall be included, unless it is Saturday, Sunday or a legal holiday in this Commonwealth, in which event the period shall run until the end of the next day which is neither a Saturday, Sunday nor a holiday. A part-day holiday shall be considered as other days and not as a holiday. Intermediate Saturdays, Sundays and holidays shall be included in the computation.
The provisions of this § 125.20 amended under sections 305(a) and 435(a) of the Workers Compensation Act (77 P. S. § § 501 and 991(a)) and section 2205 of The Administrative Code of 1929 (71 P. S. § 565).
The provisions of this § 125.20 amended September 10, 2010, effective September 11, 2010, 40 Pa.B. 5147. Immediately preceding text appears at serial page (250136).
§ 125.21. Self-insurance loss portfolio transfer policy.
(1) The insurance carrier must be a workers compensation insurer.
(2) The policy must provide statutory coverage limits and state that the insurer is responsible to defend, adjust and handle all open, reopened and incurred but not reported claims against the self-insurer for the period of time covered by the policy.
(3) The policy must be retrospective, providing coverage for a consecutive period of time of self-insurance.
(4) The policy must be noncancelable by either the insurance carrier or the self-insurer for any reason.
(5) The amount of annual compensation paid by the insurance carrier on any claims assumed under the policy must be included as compensation paid on the data reports filed with the Insurance Department.
(6) The insurance carrier must include the premium received on the policy in the amount of net written workers compensation premium it annually reports to the Insurance Department or to the National Association of Insurance Commissioners.
(7) The insurance carrier must notify existing claimants with injuries or diseases covered by the policy that it has assumed liability for the payment and handling of their claims.
(8) The insurance carrier must file the policy with a rating organization approved by the Insurance Commissioner and identify it as a special self-insurance loss portfolio transfer policy. The insurance carrier should not report statistical information on claims assumed under the policy to the rating organization.
(9) The insurance carrier must enter an appearance with the appropriate workers compensation judge, the Workers Compensation Appeal Board and any appellate court on each pending claim in adjudication against the self-insurer for injuries or disease exposures occurring during the time period covered by the policy.
The provisions of this § 125.21 issued under sections 305(a) and 435(a) of the Workers Compensation Act (77 P. S. § § 501 and 991(a)) and section 2205 of The Administrative Code of 1929 (71 P. S. § 565).
The provisions of this § 125.21 adopted September 10, 2010, effective September 11, 2010, 40 Pa.B. 5147.
This section cited in 34 Pa. Code § 125.2 (relating to definitions).

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 § 125
 § 125
 § 125
 § 501
 § 565
 § 125
 § 1051
 § 125
 § 501
 § 565
 § 125
 § 125
 § 125

§ 125
 § 125
 § 501
 § 565
 § 125

§ 125
 § 125
 § 501
 § 565
 § 125

§ 125

§ 125
 § 125
 § 125
 § 501
 § 565
 § 125

§ 125
 § 125
 § 125
 § 501
 § 565
 § 125

§ 125
 § 997
 § 125
 § 501
 § 565
 § 125

§ 125
 § 125
 § 125
 § 997
 § 121
 § 125
 § 501
 § 565
 § 125

§ 125
 § 125
 § 501
 § 565
 § 125

§ 125
 § 125
 § 501
 § 565
 § 125
 § 125