Louisiana Administrative Code › Title 40 - LABOR AND EMPLOYMENT › Part I - Workers' Compensation Administration › Subpart 1 - General Administration › Chapter 17 - Fiscal Responsibility Unit › Section I-1705 - Definitions

Current through Register Vol. 50, No. 6, June 20, 2024
A. When used in
				  these rules, the following words or terms shall have the meaning as described
				  in this Section.
Certified Audit
- an audit upon which the
					 auditor expresses his professional opinion that the accompanying statement
					 presents fairly the financial position of the self-insurer or fund in
					 conformity with generally accepted accounting principles consistently
					 applied.
Commutation
- a substitution, exchange or
					 interchange of one security for another.
Conditional Reserves
- acceptable assets
					 equal to the security deposit requirement plus any additional contingent
					 reserves established by the trustees or required by the office.
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.
Current Ratio
- the ratio of current
					 assets to current liabilities as shown in the most recent financial
					 statement.
Loss Development
- the change in incurred
					 loss from one point in time to another.
Loss Fund
- the retention of liability for
					 an individual 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.
Manual Premium
- premium determined by
					 multiplying the payroll (segregated into the proper workers' compensation job
					 classifications) times the appropriate manual premium rates, or premiums
					 tabulated on unspent payrolls, or limited payrolls as promulgated by the
					 National Council on Compensation Insurance.
Net Safety Factor
- any amount needed in a
					 given fund year in addition to current loss reserves to fund future loss
					 development.
Office
- the Office of Workers'
					 Compensation Administration.
Service Company
- a business which has met
					 all the requirements of
					 §1713 of these
					 rules and which has obtained office approval to contract with self-insurers for
					 the purpose of providing all services necessary to plan and maintain an
					 approved self-insurer program. The term
Service Agent
is
					 synonymous with the term
Service Company
as used in these
					 rules.
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.
Working Capital or Net Current Assets
-
					 current assets less current liabilities.
AUTHORITY NOTE:
					 Promulgated in accordance with
					 R.S.
					 23:1291,
					 R.S.
					 23:1168, and Act 938 of 1988 Regular
					 Session.