Code of Colorado Regulations
1100 - Department of Labor and Employment
1101 - Division of Labor Standards and Statistics (Includes 1103 Series)
7 CCR 1101-4 - RULES GOVERNING THE ISSUANCE OF SELF-INSURANCE PERMITS UNDER THE WORKERS' COMPENSATION ACT
Part 3 - APPLICATION PROCESS AND PERMIT REQUIREMENTS
Universal Citation: 1100 CO Code Regs 3
Current through Register Vol. 47, No. 5, March 10, 2024
(A) Employer Self-Insurance; Application.
(1) An employer seeking
to insure its risk under the Act as a self-insurer pursuant to §
8-44-201, C.R.S., shall apply to
the Executive Director on a form prescribed and furnished by the Executive
Director titled "Application for Self-Insurance".
(2) All questions on the Application for
Self-Insurance must be answered under oath by an authorized agent of the
applicant.
(3) Only those
applications submitted by employers who regularly employ at least three hundred
(300) employees in Colorado will be considered by the Executive Director. In
his/her discretion, the Executive Director may waive the 300 employee
limitation for corporations, division(s) of a corporation, or subsidiaries of a
corporation who can affirmatively demonstrate to the Executive Director their
continued ability to meet all obligations under the Workers' Compensation Act
at all times. In considering whether any waiver should be allowed, the
Executive Director may consider factors such as, but not limited to:
(a) Total assets of at least
$100,000,000;
(b) The ratio of
current assets to current liabilities of 1.5:1; or more
(c) The ratio of long term debt to tangible
net worth of 1:1.5; or less
(d)
Accounting ratios which equal or exceed industry standards.
(4) In addition to the
application, a favorable applicant must comply with all of the following:
(a) Submission of the applicant's most recent
certified financial statement and certified financial statements for the
immediate preceding four consecutive years.
(b) Evidence that the employer has been in
business for a period of not less than five (5) years and can demonstrate
sufficient financial strength and liquidity to assure that all obligations will
be met promptly. An employer in business less than five (5) years may be
considered if liability is guaranteed by a parent corporation with a business
history of no less than five (5) years. If the applicant is an entity which has
formed through merger, bifurcation or divestiture, the Executive Director may
consider business history created prior to the applicants present formation as
well as pro forma financial information.
(c) An insurance policy of specific excess
insurance with policy limits and retention amounts acceptable to the Executive
Director shall be required of each self-insured. Aggregate excess insurance may
be required as a condition of approval of any self-insured program.
(d) An applicant for a permit shall provide
security in the amount and in a manner prescribed by the Executive Director to
insure payment of all workers' compensation claims required by the Act. The
minimum amount of such security shall be $300,000. The Executive Director may
consider, but is not limited to, the following forms of security:
1) Cash, government bonds, certificate of
deposit or other forms of liquid security that are deemed acceptable by the
Executive Director. All such security under this provision shall be bound in
trust by proper agreement as approved by the Executive Director and duly
executed by all parties to said trust.
2) A surety bond of the form prescribed by
the Executive Director. When a surety bond is used, the following criteria
shall apply:
(a) The Executive Director will
not accept a surety bond unless it is issued by a surety company authorized by
the Colorado Insurance Commissioner to transact such business in
Colorado.
(b) A surety bond shall
be issued on a prescribed form. A replacement surety bond must be on a
prescribed replacement form, be of the current coverage amount and contain
inclusive dates of surety coverage. The Executive Director must be advised
immediately of such a change.
(c)
The bond must include a statement that the bonding company must give ninety
(90) days' notice of its intent to terminate liability to both the principal
and the Executive Director.
3) The Executive Director may consider an
irrevocable letter of credit of a form prescribed by the Executive Director at
his/her discretion.
(e)
All forms of security shall name the Executive Director as beneficiary and may
be held by the Office of Treasurer of the State of Colorado. Upon
discontinuance of self-insured status, for any reason, the Executive Director
shall claim such security of that permit holder as reserves for all outstanding
workers' compensation liabilities. The Executive Director shall retain such
security until he/she is satisfied that all liabilities have been met; or the
Executive Director or his/her agent shall oversee the appropriate disbursements
of such security. In all forms of security such proceeds may be used in any
manner to include payment of administrative or other costs necessitated in
discharging any workers' compensation liability on the part of the employer
under the act.
(5) All
parent companies (permit holders) shall make application on behalf of their
subsidiaries and provide a guarantee of liability for payment of compensation
claims on the prescribed Division form. Changes subsequent to the initial
application that pertain to acquisitions, mergers, spin-offs, creation of new
subsidiaries, changes with Federal Employer identification number(s) must be
reported a minimum of 30 days, prior to the effective date of the change, to
the Executive Director or his/her agent for coverage approval if the
self-insured permit holder's intention is to continue self-insurance coverage
and/or add coverage under the existing self-insurance permit.
(6) Each permit holder shall have within its
own organization ample facilities and competent personnel to service its own
program with respect to claims and administration or shall contract with a
service company competent to provide these services.
Disclaimer: These regulations may not be the most recent version. Colorado may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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