§ 125.2. Definitions.

 The following words and terms, when used in this subchapter, have the following meanings, unless the context clearly indicates otherwise:

   Act—The Workers’ Compensation Act (77 P. S. § §  1—1038.2).

   Actuary—A member in good standing of the Casualty Actuarial Society or a member in good standing of the American Academy of Actuaries.

   Affiliates—Employers which are closely related through common ownership or control.

   Aggregate excess insurance—Insurance which provides that the excess insurer pays on behalf of or reimburses a self-insurer for its payment of benefits on claims incurred during a policy period in excess of the retention amount to the excess insurer’s limit of liability.

   Applicant—An employer requesting permission to initiate or to renew self-insurance, an employer requesting permission for it and its affiliates or subsidiaries to initiate or to renew self-insurance, or a parent company requesting permission for its subsidiaries to initiate or to renew self-insurance.

   Bureau—The Bureau of Workers’ Compensation of the Department.

   Cash flow protection amount—The maximum amount of benefits a self-insurer pays over a 2-year period on an occurrence without reimbursement from an excess insurer under a specific excess insurance policy with a per year per occurrence cash protection plan.

   Claims service company—An individual, corporation, partnership or association engaged in the business of servicing a self-insurer’s claims, including the adjusting and handling of claims, the payment of benefits and the provision of required reports.

   Commonwealth—

     (i)   The government of the Commonwealth, including the following:

       (A)   The courts and other officers or agencies of the unified judicial system.

       (B)   The General Assembly, and its officers and agencies.

       (C)   The Governor, and the departments, boards, commissions, authorities and officers and agencies of the Commonwealth.

     (ii)   The term does not include any instrumentalities of the Commonwealth or political subdivisions.

   Department—The Department of Labor and Industry of the Commonwealth.

   Employer—An employer as defined in section 103 of the act (77 P. S. §  21) or under section 103 of the Occupational Disease Act (77 P. S. §  1203), or both.

   Excess insurer—An insurance company authorized to transact the class of insurance listed in section 202(c)(14) of The Insurance Company Law of 1921 (40 P. S. §  382(c)(14)).

   Instrumentality of the Commonwealth—An employer, politic and corporate, exercising an essential government function. The term does not include the Commonwealth or any political subdivisions.

   Loss development—The tendency of the cost of a group of claims to increase as they mature.

   Occupational Disease Act—The Pennsylvania Occupational Disease Act (77 P. S. § §  1201—1603).

   Parent company—A corporation which owns a majority of the voting stock of an employer or controls a majority of the employer’s board of directors appointments if the employer has no voting stock.

   Permit—The document issued by the Bureau to an employer which authorizes the employer to operate as a self-insurer.

   Political subdivision—A county, city, borough, incorporated town, township, school district, vocational school district and county institution district, municipal authority, or other entity created by a political subdivision under law.

   Private employer—An employer who is not a public employer as defined in this section.

   Public employer—The Commonwealth, an instrumentality of the Commonwealth or a political subdivision.

   Quick assets—The sum of an applicant’s cash, cash equivalents, current receivables and marketable securities.

   Retention amount—The maximum amount of benefits a self-insurer pays without reimbursement from the excess insurer under an aggregate excess insurance policy or under a specific excess insurance policy which does not include an annual cash flow protection plan. The term also includes the maximum amount of benefits a self-insurer pays on each occurrence without reimbursement from the excess insurer, if any, under a specific excess insurance policy which includes an annual cash flow protection plan.

   Runoff self-insurer—An employer that had been a self-insurer but no longer maintains a current permit.

   Security—Surety bonds, letters of credit or cash or negotiable government securities held in trust to be used for the payment of a self-insurer’s workers’ compensation liability upon order of the Bureau if the self-insurer fails to pay its liability due to its financial inability or due to the self-insurer filing for bankruptcy or being declared bankrupt or insolvent.

   Security constant—The Statewide average weekly wage multiplied by 300.

   Self-insurance—The privilege granted to an employer which has been exempted by the Bureau from insuring its liability under section 305 of the act (77 P. S. §  501) and section 305 of the Occupational Disease Act (77 P. S. §  1405).

   Self-insurer—An employer which has been granted the privilege to self-insure its liability and to maintain direct responsibility for the payment of this liability under the act and the Occupational Disease Act. The term includes a parent company or affiliate which has assumed a subsidiary’s or an affiliate’s liability upon the termination of the parent-subsidiary or affiliate relationship.

   Specific excess insurance—Insurance which provides that the excess insurer pays on behalf of or reimburses a self-insurer for its payment of benefits on each occurrence in excess of the retention amount to the excess insurer’s limit of liability.

   Statewide average weekly wage—The amount calculated and reported by the Bureau under section 105.1 of the act (77 P. S. §  25.1).

   Subsidiary—An employer whose voting stock or board of directors appointments are controlled by a parent company.

   The provisions of this §  125.2 amended October 23, 1998, effective October 24, 1998, apply to applicants, self-insurers, runoff self-insurers, group self-insurance funds and run-off funds, 28 Pa.B. 5459. Immediately preceding text appears at serial pages (201138) to (201139).