Current through Register Vol. 54, No. 38, September 21, 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.
(d) The Bureau
will not begin its review of the application until the application and the
required supporting materials as outlined in this section have been
submitted.
(e) The applicant shall
provide additional data and information that the Bureau deems pertinent to its
review of the application based on the factors enumerated under §
125.134 (relating to decision on
application). The applicant shall provide data and information within the time
prescribed by the Bureau, which will be reasonable based on the extent and the
availability of the data and information required.
This section cited in 34 Pa. Code §
125.143 (relating to restriction
on the use of assets).
