Washington Administrative Code › Title 200 - Enterprise Services, Department of › RISK MANAGEMENT › Chapter 200-120 - Affordable housing entity joint self-insurance property and liability program requirements › Section 200-120-140 - Standards for solvency - Actuarially determined liabilities, program funding and liquidity requirements

Current through Register Vol. 24-14, July 15, 2024
(1) All joint self-insurance programs shall
				obtain an annual actuarial review as of fiscal year end which provides
				estimates of the unpaid claims measured at the expected and the seventy percent
				confidence level.
(2) The board of
				directors of the joint self-insurance program shall establish and maintain
				primary assets in an amount at least equal to the unpaid claims estimate at the
				expected level as determined by the program's actuary as of fiscal year end.
				All joint self-insurance programs that do not meet the requirement to maintain
				sufficient primary assets as of fiscal year end shall notify the state risk
				manager in writing of the condition. The state risk manager shall take
				corrective action, which may include the service of a cease and desist order
				upon the program, to require that the program increase primary assets in an
				amount equal to the unpaid claims estimate at the expected level as determined
				by the program's actuary as of fiscal year end.
(3) The board of directors of the joint
				self-insurance program shall establish and maintain total primary and secondary
				assets in an amount equal to or greater than the unpaid claim estimate at the
				seventy percent confidence level as determined by the program's actuary as of
				fiscal year end. All joint self-insurance programs that do not meet the reserve
				requirements to maintain sufficient primary and secondary assets shall notify
				the state risk manager in writing of the condition. The state risk manager
				shall require that the program submit a written corrective action plan to the
				state risk manager within sixty days of notification. Such plan shall include a
				proposal for improving the financial condition of the self-insurance program
				and a time frame for completion. The state risk manager shall approve or deny
				the proposed plan in writing within thirty days of receipt of the final plan
				submission. Failure by the joint self-insurance program to respond or submit a
				plan to improve the financial condition of the program shall cause the state
				risk manager to take corrective action, which may include the service of a
				cease and desist order upon the program.
(4) The state risk manager shall evaluate the
				operational safety and soundness of the program by monitoring changes in
				liquidity, claims reserves and liabilities, owner equity, self-insured
				retention, and other financial trends over time. Programs experiencing adverse
				trends may cause the state risk manager to increase frequency of on-site
				program review and monitoring, including increased communication with the board
				of directors and requirements for corrective plans.
(5) When the state risk manager determines it
				necessary to analyze the program's soundness and financial safety, the state
				risk manager may obtain an independent actuarial evaluation to determine the
				adequacy of reserves. Costs of these services shall be the responsibility of
				the joint self-insurance program.
Statutory Authority: 2011 c 43. 11-23-093, recodified as
					 WAC 200-120-140, filed 11/17/11,
					 effective 11/17/11. Statutory Authority: Chapter 48.64 RCW, RCW 48.64.015, and
					 42.64.020. 11-06-001, § 82-70-140, filed 2/16/11, effective
					 3/19/11.