Code of Massachusetts Regulations
211 CMR - DIVISION OF INSURANCE
Title 211 CMR 67.00 - Workers' Compensation Self-insurance Groups
Section 67.06 - Application for Certificate of Approval
Universal Citation: 211 MA Code of Regs 211.67
Current through Register 1531, September 27, 2024
(1) General Provisions.
(a) A proposed workers' compensation
self-insurance group shall file with the Commissioner its application for a
certificate of approval accompanied by a non-refundable filing fee in the
amount of $100.00.
(b) The
Commissioner shall evaluate the information provided in the application to
assure that no gaps in funding exist and that funds necessary to pay workers'
compensation benefits shall be available on a timely basis.
(c) The Commissioner shall conduct an initial
review of each application to determine if it is complete. The Commissioner
shall act upon a completed application for a certificate of approval within 90
days.
(d) The group shall
immediately notify the Commissioner of any change in the information required
to be filed by 211 CMR 67.06.
(e)
All information provided by an applicant during the application process shall
be given confidential treatment and shall not be subject to subpoena or made
public by the Commissioner or any other person, except by the applicant,
without the prior written consent of such applicant, unless the Commissioner,
after giving the applicant notice and opportunity to be heard, determines that
the public interest would be served by the publication thereof, in which event
he or she may publish all or any part thereof in such manner as he or she may
consider appropriate. Notwithstanding the foregoing, once an application has
been approved by the Commissioner it shall be made available to the public;
provided, however, that if a group wishes, it may submit two complete sets of
statements, one with all identifying information blacked out or deleted, and
the other set complete with all the identifying information, and the group's
underwriting guidelines, for inclusion in the financial examination
file.
(2) Application; Required Filings.
(a)
General
Information: the Application for a Certificate of Approval shall
be on a form prescribed by the Commissioner and shall include:
1. the name of the group;
2. the address and telephone number of the
group's principal office;
3. the
date of organization of the group;
4. the name and address of each member of the
group;
5. the name, address and
date of organization of the industry, trade or professional organization to
which all the members of the group belong, or identification of the collective
bargaining agreement to which all group members are parties;
6. the types of business in which employers
in the proposed group are engaged and an explanation of how they are the same
or similar;
7. a listing of the
names and addresses of the initial board of trustees and the name and address
of the administrator in accordance with the provisions of
211 CMR
67.07.
(b)
Additional Documents Required
from the Group:
1. a copy of the
by-laws of the group;
2. a copy of
the articles of association, trust agreement, or articles of
organization;
3. a completed and
signed application by the administrator to serve as the administrator of the
group, on a form prescribed by the Commissioner;
4. a certificate indicating that the
Commissioner has been appointed the group's agent for service of legal process
as required by
211 CMR
67.03(3);
5. a schedule of all projected administrative
expenses for the group in dollar amount and as a percentage of the estimated
standard premium for the group;
6.
a composite listing of the estimated standard premium and annual net premium to
be developed for each member individually and in total for the group amounting
to not less than $250,000. The listing shall include and reflect experience
modification factors, All Risk Adjustment Program (ARAP) factors, such other
rating plan(s) the Commissioner may approve, and any applicable premium
discounts. At least 70% of the members of a group shall be experience rated
pursuant to the uniform experience rating plan filed with and approved by the
Commissioner;
7. a listing of
payroll data, by workers' compensation class code, for the combined group and
for each member of the group for each of the three preceding years;
8. a confirmation of required specific and
aggregate excess insurance or reinsurance, by an insurer licensed, approved or
otherwise authorized to transact excess insurance or reinsurance in the
Commonwealth. Such confirmation shall include a description of the coverages
offered, the terms and conditions of the coverages and the expected premium
charges for the coverages. The amount and the terms of the specific and
aggregate excess insurance or reinsurance shall comply with the requirements of
211 CMR
67.21;
9. a copy of the fidelity bond, binder, or
commitment letter from the surety relating to the fidelity bond for the
administrator, on a form prescribed or approved by the Commissioner, in an
amount not less than the administrator's total annual compensation for all the
groups it administers or $1,000,000, whichever is less. If the group submits a
binder, or commitment letter, it must submit a copy of the actual bond to the
Division within 60 days after the group is approved;
10. the proposed underwriting guidelines for
the group;
11. a premium payment
plan requiring each member to pay the group not less than 25% of the member's
estimated annual net premium not later than the initial day of coverage
provided by the group. The premium payment plan of a group containing private
employers shall also provide that the balance of each member's annual premium
be paid in cash within the first eight months of that fund year in monthly or
quarterly installments. A public employer group shall establish a premium
payment plan acceptable to the Commissioner;
12. a detailed written description of the
group's safety and loss prevention program(s);
13. a refund and assessment plan for the
group;
14. an actuarial study
displaying adequacy of program funding, including loss reserves, prepared and
signed by a qualified actuary. The actuarial study shall show that the group is
actuarially fully funded, and shall include any and all data, assumptions and
other information used to develop such study;
15. a pro forma financial statement for the
group's first five years of operation, showing the financial ability of the
group to pay the workers' compensation obligations of its members, including
any and all assumptions relied upon to develop such statement;
16. for a group containing private employers,
a statement showing the combined provable net worth of all members applying for
coverage on the inception date of the group. Such combined provable net worth
shall be the amount that establishes the financial strength and liquidity of
the members and shall be at least one million dollars;
17. for a group containing private employers,
a specimen indemnity agreement jointly and severally binding the members of a
group to comply with the provisions of
211 CMR 67.00 which shall be
executed by the members upon approval of the group by the Commissioner and
prior to the commencement of operations. Such indemnity agreement may be
included as a provision of the group's membership or participation or similar
agreement which each member of a proposed group shall assent to in writing as a
prerequisite to membership in the group; provided that the membership,
participation or other similar agreement, clearly discloses, as the first
provision and in at least ten point type, the member's obligations under the
indemnity agreement, including, at a minimum, the provisions of
211
CMR 67.11(3) through
(5).
(c)
Documents Required of Each
Member: for each member of the group, the group shall provide the
following:
1. An individual application,
including a disclosure form describing the joint and several obligations of the
members, a certification that the member has no outstanding workers'
compensation obligations, and a description of the group's refund/assessment
plan, signed by an officer or other responsible employee of the member, on a
form prescribed or approved by the Commissioner;
2. A written explanation by any member with
an experience modification greater than 1.25 describing the causes of its high
experience modification and outlining remedial measures it has taken and will
be taking in the future to lower its modification;
3. Every member of a group containing private
employers shall also submit the following documents:
a. a certified or compiled financial
statement, subject to the requirements of 211 CMR 67.06(1)(e); this
requirement, however, shall not apply to a self-insurance group which is
composed of more than 1,000 members and has been in existence for at least five
years as of December 31, 1999 and at all times remains in compliance with the
minimum net worth requirements of both
211 CMR
67.08(2)(c) and
67.10.
b. a written agreement to pay the group not
less than 25% of the member's estimated annual net premium not later than the
initial day of coverage afforded by the group.
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