WAC 296-15-024
Additional certification requirements. (1) What if the employer is a joint venture? A joint venture
is defined as two or more employers that have signed a
contractual agreement to operate as a single unit for a
specified period of time for the completion of a specific
task. The department will consider a joint venture's
application for self-insurance if the joint venture is
sponsored by a current self-insurer.
In addition to the standard certification requirements
found in WAC 296-15-021, an application from a joint venture
must include:
(a) The name of a sponsoring party. The sponsoring party
must be a certified self-insurer in good standing with the
department and have a majority financial interest in the
assets and profits of the joint venture.
(b) A list of named participants. Each named participant
must also:
(i) Demonstrate that it has at least twenty percent
interest in the joint venture.
(ii) Submit three years' worth of audited financial
statements prepared by certified independent accountants.
(c) A written acknowledgement from each named participant
of its joint and several liability for continuing compensation
if any participant of the joint venture defaults. This
responsibility continues until the department grants a written
release to the joint venture or the remaining participant(s)
of the joint venture. A written release from the department
is granted only after the contract has been completed and a
final settlement of the joint venture account has been made.
(d) A written description of the obligations of each
participant for the industrial insurance program of the joint
venture.
(e) A written acknowledgement of the sponsoring party's
responsibilities for the management of all claims and payment
of all compensation incurred during the period of the joint
venture's self-insurance certification and after the joint
venture is dissolved. This acknowledgement must include the
sponsor's continuation of benefits if the joint venture or any
of the other parties of the joint venture defaults.
(2) What if the employer is an employee stock ownership
program (ESOP)? An employee stock ownership program is
defined as a firm in which the employees have purchased a
majority of the financial interest.
If the employees purchase an existing self-insured
company, that company would be required to return to the state
industrial insurance fund for a minimum of one year before the
department would consider its application for self-insurance.
(3) What additional requirements exist if the employer is
a group? A group is defined as a group of employers
authorized under chapter 51.14 RCW to form self-insurance
groups.
(a) In addition to the standard certification
requirements found in WAC 296-15-021, an application from a
group must include:
(i) A copy of the group's bylaws.
(ii) Individual applications for each of its members
along with the current audited financial information of each
member.
(iii) A current audited consolidated financial statement
of the group (if the group exists at the time of the
application).
(iv) A listing of the estimated standard premium to be
developed for each member individually and the estimated
standard premium of the group as a whole.
(v) An indemnity agreement jointly and severally binding
the group and each member to comply with the provisions of
Title 51 RCW.
(vi) A detailed budget of all projected administrative
revenues and expenses for the first year of operation.
(b) When the application for a group is tentatively
approved, the applicant must submit the following:
(i) Surety, established at one hundred twenty-five
percent of the standard industrial insurance premiums.
(ii) A copy of the aggregate excess insurance coverage
policy.
(iii) Documentation of a contingency reserve that is the
greater of:
(A) Fifteen percent of the estimated claims liability; or
(B) Twenty-five percent of the standard industrial
insurance premium.
[Statutory Authority: RCW 51.04.020, 51.14.020, 51.32.190,
51.14.090, and 51.14.095. 06-06-066, § 296-15-024, filed
2/28/06, effective 4/1/06.]