Arkansas Administrative Code › Agency 099 - Arkansas Workman's Compensation › Rule 099.00.95-002 - Rule 5 - Self-Insurer Program

Current through Register Vol. 49, No. 6, June, 2024
PART
		  I
GENERAL - ALL SELF-INSURERS
A.
Definitions.
When used in
		  these rules, the following words or terms shall have the meaning as described
		  in this section.
(1) Certified Audit - an
		  audit upon, which the auditor expresses his professional opinion that the
		  accompanying statements present fairly the financial position of the
		  Self-Insurer or fund in conformity with generally accepted accounting
		  principles consistently applied, and accordingly including such tests of the
		  accounting records and other auditing procedures as considered necessary in the
		  circumstances.
(2) Common
		  Self-Insurer - employers who are members of the same trade or professional
		  association entering into agreement to pool their liabilities.
(3) Conditional Reserves - acceptable assets
		  equal to the security deposit requirement plus any additional contingent
		  reserves established by the trustees or required by the Commission.
(4) Contingent Liability - the amount that a
		  Self-Insurer's fund may be obliged to pay in excess of a given fund year's
		  standard premium collected or on hand. This liability is considered funded if a
		  security deposit equal to the total amount of the contingent liability has been
		  posted. This liability is considered unfunded if a surety bond has been posted
		  equal to all or a portion of the total amount of the contingent
		  liability.
(5) Current Ratio - the
		  ratio of current assets to current liabilities as shown in the most recent
		  financial statement.
(6) Group -
		  Common Self-Insurer or Homogeneous Self-Insurer.
(7) Homogeneous Self-Insurer - employers who
		  are engaged in the same type of business activity or pursuit entering into
		  agreement to pool their liabilities.
(8) Manual Premium - premium determined by
		  multiplying the payroll (segregated into the proper workers' compensation job
		  classifications) times the appropriate manual premium rates, or limited
		  payrolls as promulgated by the National Council on Compensation
		  Insurance.
(9) Loss Development -
		  the change in incurred loss from one point .in time to another.
(10) Loss Fund - the retention of liability
		  for a Self-Insurer, either Individual Self-Insurer or Group Self-Insurer, under
		  the terms of an aggregate excess contract. In the absence of an aggregate
		  excess policy, it is the amount of money allocated to pay claims.
(11) Net Safety Factor - any amount needed in
		  a given fund year in addition to current loss reserves to fund future loss
		  development.
(12) Service Company -
		  a business which has met all the requirements of Part
		  I, E and which has obtained
		  Commission approval to contract with Self-I
		  nsurers for the purpose of providing all services necessary to plan and
		  maintain an approved Self-I nsurer program.
		  The term 'Service Agent" is synonymous with the term 'Service Company" as used
		  in these rules.
(13) Surplus - all
		  other assets a fund may have on hand in excess of all loss reserves, actual and
		  contingent liabilities and net safety factors in all fund years.
(14) Trustees - a group of members elected by
		  a Group Self-I nsurer for stated terms of
		  office, to direct the administration of a Group Self-I
		  nsurer, and whose duties shall include responsibility for approving
		  applications for new members in such group. The majority of such trustees must
		  be members of the group, but a trustee shall not be an owner, officer or
		  employee of the service agent. They may delegate ministerial authority for
		  membership approval to such person as they select, provided that person is not
		  an owner, officer or employee of the service agent.
(15) Trustee's Fund - any fund under the
		  control of the board of trustees of a Group Self-I
		  nsurer which is not part of the loss fund or which is not required to pay
		  claims.
(16) Common Claim Fund - a
		  fund maintained by a Group Self-I nsurer for the
		  sole purpose of paying claims imposed by the provisions of the Arkansas
		  Workers' Compensation Act.
(17)
		  Working Capital or Net Current Assets - current assets less current
		  liabilities.