Washington Administrative Code › Title 296 - Labor and Industries, Department of › Chapter 296-15 - Workers' compensation self-insurance rules and regulations › Section 296-15-171 - Surety for a self insured pension or fatality claim

Current through Register Vol. 24-14, July 15, 2024
(1)
When must a self insurer provide
			 funding for a permanent total disability (pension) or fatality claim?
Within sixty days of receipt of the department's order, the self insurer must
			 fund the pension or fatality claim.
(2)
What types of funding may a self
			 insurer use for a pension or fatality claim?
A self insurer may fund a
			 pension or fatality claim with cash, a bond on L&I form F207-065-000,
			 annuity on L&I form F207-129-000 or assignment of account on L&I form
			 F207-058-000. If the pension benefit level increases, the self insurer must
			 increase the surety level or provide additional surety to cover the
			 deficiencies.
(3)
What is an
			 annuity?
An annuity is a contract with an insurance company where the
			 insurance company agrees to pay to the department a specific amount covering
			 the lifetime of a claimant.
(4)
What is an assignment of account?
A self insurance assignment of
			 account/certificate of deposit is a legal instrument executed by the self
			 insurer and an approved commercial banking institution in Washington. The
			 assignment of account must:
(a) Identify an
			 existing account on deposit with the approved banking institution in the name
			 of the self insurer. The existing assigned account must contain the amount
			 determined necessary by the department to cover the pension benefits on the
			 specific claim beyond all other assignments on that account. A separate
			 assignment of account must be established for each pension.
(b) Bind the self insurer to maintain a
			 balance in the assigned account at least equal to the current present cash
			 value of the pension benefits on the claim and beyond all other assignments on
			 the account for the life of the claim. Present cash values of the assigned
			 account/certificate of deposit will be revised annually by the department.
			 Quarterly pension payments made from the assigned account must not reduce the
			 account balance below the present cash value of the pension beyond all other
			 assignments on the same account.
(c) Authorize the department, if the self
			 insurer defaults, to immediately withdraw up to the entire amount assigned to
			 the pension claim from the assigned account/certificate of deposit. The
			 department will take this action without notifying the defaulting self
			 insurer.
(d) If the bank holding
			 the assignment of account/certificate of deposit fails, the self insurer is
			 responsible for the entire amount of the pension or fatality obligation. Within
			 thirty days, the self insurer must:
(i)
			 Establish a new assignment of account/certificate of deposit, bond;
			 or
(ii) Deposit cash into the
			 reserve fund.
(e) If the
			 self insurer ends its self insurance status, the assignment of
			 account/certificate of deposit will be placed with the department. The
			 department will determine the required reserve for the pension or fatality
			 claim, and any excess will be returned to the former self insurer.