Pennsylvania Code › Title 34 - LABOR AND INDUSTRY › Part VIII - Bureau of Workers' Compensation › Chapter 125 - WORKERS' COMPENSATION SELF-INSURANCE › Subchapter B - GROUP SELF-INSURANCE › Section 125.133 - Application

Current through Register Vol. 54, No. 28, July 13, 2024
(a) An applicant
				  shall file an application on a form prescribed by the Bureau. Questions on the
				  application shall be answered thoroughly and completely with the most recent
				  information available. A rider may be attached if more space is necessary. The
				  application shall be signed by a representative of the applicant and attested
				  to as set forth on the application. Any attached rider and applicable form
				  enclosed with the application shall be verified to in the sworn affidavit
				  requested on the application.
(b)
				  Applications shall be filed with the Bureau no later than 90 days prior to the
				  requested effective date of the fund.
(c) With the application, the applicant shall
				  include:
(1) The nonrefundable fee in the
				  amount of $1,000 required by section 802(c) of the act (77 P. S. §
												1036.2(c)).
(2) The audited financial statements
				  presented in conformity with generally accepted accounting principles of one
				  prospective member with a net worth of at least $1 million or of more than one
				  prospective member with aggregate net worth of at least $1 million, or an
				  amount as may be promulgated annually by the Bureau and published in the
Pennsylvania Bulletin
to take effect on January 1 of each
				  year. This paragraph does not apply to applicants composed of political
				  subdivisions.
(3) The prior fiscal
				  year's audited or reviewed financial statements of each prospective member
				  whose annual contribution to the fund would make up more than 10% of the total
				  annual contributions to the fund.
(4) An explanation of the same classification
				  series, as described under §
											125.155(a)
				  (relating to homogeneity), common to all prospective members with the amount of
				  each member's contributions derived from the classification codes within the
				  common series, or an explanation of how the prospective members are engaged in
				  the same or similar types of business, as described under §
											125.155(b). The
				  Bureau may request additional information to determine the homogeneity of the
				  applicant.
(5) If the applicant is
				  eligible under §
											125.135 (relating to
				  classification system; experience rating; contributions rates) and is
				  requesting to deviate from the loss costs of a rating organization as defined
				  under section 703 of the act (77 P. S. §
												1035.3), a report prepared by an independent
				  actuary projecting the workers' compensation incurred loss experience of the
				  applicant during its first fund year by various levels of actuarial confidence
				  and rendering an opinion that the rates requested for use will be adequate to
				  satisfy the applicant's obligations and expenses.
(6) A schedule of the projected annual
				  contributions which will be paid by each prospective member and in total during
				  the first fund year and worksheets showing the calculation of each prospective
				  member's annual contributions.
(7)
				  A schedule of projected administrative expenses in dollar amounts and as a
				  percentage of the estimated total member contributions for the first fund
				  year.
(8) The applicant's proposed
				  trust agreement and bylaws, which shall include:
(i) A pledge that each member will be jointly
				  and severally liable for the expenses and other obligations of the fund and for
				  each other member's workers' compensation liability which is incurred while it
				  is a member, including liability for assessments on claims incurred during a
				  member's membership but not issued until after it has terminated
				  membership.
(ii) A pledge that the
				  applicant will remain liable to pay and administer the claims incurred by
				  members while they participated in the fund.
(iii) The powers, duties and responsibilities
				  of the board of trustees.
(iv) The
				  structure of the board of trustees.
(v) The method of appointing, removing and
				  replacing trustees by the plan committee.
(vi) The persons or committee responsible for
				  the acquisitions, management, investment and disposition of real and personal
				  property of the fund.
(vii) The
				  rights, privileges and obligations of the members.
(viii) Procedures for amending the trust
				  agreement and the bylaws, which shall require the approval of the plan
				  committee.
(ix) Requirements for
				  membership.
(x) Procedures for the
				  withdrawal or expulsion of members.
(xi) Rules on payment and collection of
				  contributions and assessments.
(xii) Procedures for resolving disputes
				  between members and the fund.
(xiii) The powers and responsibilities of the
				  plan committee.
(xiv) Procedures
				  for calling special meetings of the board of trustees and the plan
				  committee.
(xv) Delineation of
				  authority granted to the administrator, the fiscal agent and the service
				  companies.
(9) Policy
				  statements on the following subjects:
(i)
				  Underwriting standards.
(ii) Asset
				  investment policies and strategy based on permitted investments of capital or
				  surplus of stock casualty insurance companies in section 602 or 603 of The
				  Insurance Company Law of 1921 (40 P. S. §§
													722 and
				  723) (Repealed). For the
				  purpose of this subparagraph, permitted investments of capital or surplus of
				  stock casualty insurance companies in section 602 or 603 of The Insurance
				  Company Law of 1921 shall include investments permitted for domestic stock
				  casualty insurance companies under section
				  602.1 of The Insurance Company Law
				  of 1921 (40 P. S. §
													722.1).
(iii) The timing, frequency and calculation
				  of supplemental assessments needed to maintain actuarially appropriate
				  reserves.
(iv) The payment of
				  dividends and the maintenance of surplus.
(v) Procedures and policies on member payroll
				  audits and the adjustment of contributions based on the results of the
				  audits.
(10) Membership
				  applications executed by each prospective member and approved by the applicant
				  on a form prescribed by the Bureau. The membership application will also serve
				  the purpose of the letter of intent required under section 802(b)(12) of the
				  act.
(11) A report on a form
				  prescribed by the Bureau summarizing the scope, function and operation of the
				  proposed loss prevention and safety program required under sections 802(b)(13)
				  and 1001(b) of the act (77 P. S. §§
												1036.2(b)(13) and
				  1038.1(b)) and regulations
				  thereunder.
(12) The applicant's
				  proposed loss-cost multiplier on a form prescribed by the
				  Bureau.