Arkansas Administrative Code › Agency 099 - Arkansas Workman's Compensation › Rule 099.00.05-003 - Rule 099.05: Self-Insurance 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 Claim Fund - a fund maintained by a
		  Group Self-Insurer for the sole purpose of paying claims imposed by the
		  provisions of the Arkansas Workers' Compensation Law.
3. Common Self-Insurer - employers who are
		  members of the same trade or professional association entering into agreement
		  to pool their liabilities.
4.
		  Conditional Reserves - acceptable assets equal to the security deposit
		  requirement plus any additional contingent reserves established by the trustees
		  or required by the Commission.
5.
		  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.
6. Current Ratio - the ratio of current
		  assets to current liabilities as shown in the most recent financial
		  statement.
7. Group - Common
		  Self-Insurer or Homogeneous Self-Insurer.
8. Homogeneous Self-Insurer - employers who
		  are engaged in the same type of business activity or pursuit entering into
		  agreement to pool their liabilities.
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. Third Party
		  Administrator - a business which has met all the requirements of Commission
		  Rule 38 and has received authorization
		  from the Commission to act as a third party administrator. The term 'Service
		  Agent" is synonymous with the term "third party administrator" as used in the
		  workers' compensation laws and the rules of the Commission.
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-insurer for stated terms of office, to direct the administration
		  of a group self-insurer, 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. Working Capital or Net
		  Current Assets - current assets less current liabilities.
17. Written Manual Premium - As defined by
		  Ark.Code.Ann.
		  11-9-303(b).
		  The rates used for the experience period shall be those published by the
		  Arkansas Workers' Compensation Commission.