Code of Massachusetts Regulations › 211 CMR - DIVISION OF INSURANCE › Title 211 CMR 67.00 - Workers' Compensation Self-insurance Groups › Section 67.02 - Definitions

Current through Register 1525, July 5, 2024
Actuarially Fully Funded Group
. A
				group for which the funding amount is established at a level sufficient to
				discharge all obligations incurred pursuant to M.G.L. c. 152 by the members of
				the group as they become due and payable from time to time, and for which the
				value of fund assets is at least equal to the present value of ultimate
				expected incurred claims and claims settlement costs, after giving due
				consideration to valid and collectible excess insurance or reinsurance. The
				determination of the sufficiency of the level of funding, including loss
				reserves, shall be made according to sound actuarial practice, and shall be
				certified by a qualified actuary.
Administrative Fund Account
. The
				remaining premium, after any payments for reinsurance or excess insurance and
				after sufficient funds are placed in the Claims Fund Account, placed in a
				designated depository in the Commonwealth for the payment of taxes, general
				regulatory fees, assessments and administrative costs.
Administrator
. An individual,
				partnership, corporation or unincorporated association engaged by a workers'
				compensation self-insurance group's board of trustees to carry out the policies
				established by the group's board of trustees and to provide daily management of
				the group.
Affiliate
. Any person that directly or
				indirectly, through one or more intermediaries, controls, is controlled by, or
				is under common control with, a specified person.
ARAP.
Any premium produced by the All
				Risk Adjustment Program or any similar worker's compensation rating program
				approved by the Commissioner.
Certified Financial Statement
. A
				current financial statement of a member, which is either audited or reviewed by
				an independent Certified Public Accountant, including, at a minimum, a balance
				sheet, a profit and loss statement, a statement of change in fund position and
				a statement of the member's net worth and including all notes of the Certified
				Public Accountant which are an integral part of the financial statement. A
				reviewed financial statement shall be considered a certified financial
				statement only if accompanied by the member's federal income tax return for the
				most recent calendar or fiscal year.
Claims Fund Account
. Member
				contributions which are placed in a designated depository in the Commonwealth
				in an amount equal to the estimated aggregate retained workers' compensation
				claims liability of the group.
Commissioner
. The Commissioner of
				Insurance appointed pursuant to M.G.L. c. 6, § 26, or his or her
				designee.
Division.
The Division of Insurance
				established pursuant to M.G.L. c. 26, § 1.
Excess Insurance
. Excess insurance or
				reinsurance.
Financial Reinsurance
. A transaction
				of reinsurance under which there is a limit on the total liability of the
				reinsurer and future investment income is a recognized component of the
				underwriting process.
Fund Year
. The fiscal year of a group,
				which shall consist of 12 calendar months, except for the first year, which may
				consist of fewer than 12 months.
In-force Premium
. The annualized
				standard premium of all policies in effect on a given date.
Insolvent or Insolvency
. The inability
				of a workers' compensation self-insurance group to pay its outstanding lawful
				obligations as they mature in the regular course of business, as may be shown
				either by an excess of its required reserves and other liabilities over its
				assets or by its not having sufficient assets to reinsure all of its
				outstanding liabilities after paying all accrued claims owed by it.
Member
. An employer, as defined in
				M.G.L. c. 152, § 1, who is a member of a workers' compensation
				self-insurance group.
Net Premium
. Standard premium less any
				advance premium discounts.
Net Worth for Non-profit
				Organizations
. In the case of a non-profit organization, net worth
				shall be the aggregate unrestricted fund balance of the non-profit organization
				as reported in its certified financial statement.
Aggregate
				Unrestricted Fund Balance
shall mean the amount equal to the
				unrestricted total assets less the unrestricted total liabilities. Net worth
				shall be determined in accordance with either generally accepted accounting
				principles or generally accepted government auditing standards, whichever is
				appropriate.
Person
. An individual, corporation,
				partnership, association, joint stock company, trust, unincorporated
				organization, or any similar entity or any combination of the foregoing acting
				in concert.
Provable Net Worth
. The net worth of a
				member, supported by certified financial statement(s) of the member.
Public Employer Workers' Compensation
				Self-insurance Group or Public Employer Group
. A not-for-profit
				association consisting of five or more employers, all of whom are public
				entities, who enter into agreements to pool their liabilities for workers'
				compensation benefits and employer's liability in the Commonwealth.
Qualified Actuary
. A member in good
				standing of the Casualty Actuarial Society or, a member in good standing of the
				American Academy of Actuaries who has been approved as qualified for signing
				casualty loss reserve opinions by the Casualty Practice Council of the American
				Academy of Actuaries.
Recalculated Distribution Amount
. The
				amount originally available for distribution to members pursuant to
				211 CMR
				67.08(4)  for a fund year,
				adjusted for any favorable or adverse loss development, less any distributions
				previously paid for that fund year.
Standard Premium
. The premium derived
				from the manual rates adjusted by any applicable experience modification
				factors, including the All Risk Adjustment Program (ARAP), and such other
				experience rating plans the Commissioner may approve, but before advance
				premium discounts or any large or small deductible credits.
Subsidiary.
An affiliate controlled by
				a person directly or indirectly, through one or more intermediaries.
Total Reimbursement Reinsurance
. A
				form of reinsurance which transfers all underwriting, timing and financial risk
				to the reinsurer.
Workers' Compensation
. When used as a
				modifier of benefits, liabilities or obligations, shall mean both workers'
				compensation and employers' liability.
Workers' Compensation Self-insurance Group or
				Group
. A public employers group or a not-for-profit unincorporated
				association or a corporation formed under the provisions of M.G.L. c. 180,
				consisting of five or more employers who are engaged in the same or similar
				type of business, who are members of the same
bona fide
industry, trade or professional association which has been in
				existence for not less than two years, or who are parties to the same or
				related collective bargaining agreements, and who enter into agreements to pool
				their liabilities for workers' compensation benefits and employers' liability
				in the Commonwealth.