§ 125.6. Decision on application.

 (a)  The application of an applicant which meets the requirements of §  125.5 (relating to minimum requirements) will be approved if the Bureau determines that the applicant has demonstrated, with reasonable certainty, the ability to meet all obligations under the act and the Occupational Disease Act. The Bureau will include the following factors in assessing an applicant’s ability to meet those obligations:

   (1)  The audit opinion required under §  125.3(c)(3) (relating to application).

   (2)  The length of time that the applicant has been doing business under its present corporate identity.

   (3)  The applicant’s overall solvency, identified as its ability to meet its financial obligations as they come due.

   (4)  The applicant’s organizational structure and management background.

   (5)  The nature of the applicant’s operations and its industry.

   (6)  Financial analysis appropriate for the particular applicant, including for example, industry ratio and cash flow analyses.

   (7)  The applicant’s debt ratings from National financial rating agencies, if any.

   (8)  The applicant’s workers’ compensation loss history and insurance history.

   (9)  The applicant’s potential financial workers’ compensation obligations, including average expected claims and maximum possible loss as limited by the excess insurance coverage obtained by the applicant, if any.

   (10)  The applicant’s claims administration history and compliance with the act, the Occupational Disease Act and this part.

   (11)  The existence and adequacy of the applicant’s accident and illness prevention program required under section 1001(b) of the act (77 P. S. §  1038.1(b)) and regulations thereunder.

 (b)  If the Bureau’s assessment under subsection (a) is that the applicant can meet its obligations, it will send to the applicant a preliminary approval notice of the application and a list of conditions as set forth under subsection (d) that shall be met before the applicant will be issued a permit. The Bureau may issue a permit to a renewal applicant subject to the renewal applicant complying with the conditions set forth by the Bureau.

 (c)  An applicant has 60 days from the receipt of the preliminary approval notice to comply with the conditions set forth by the Bureau. The applicant may toll the 60-day compliance period by filing a request for a conference under subsection (f). An applicant may be granted a 30-day extension to meet the conditions if the applicant requests an extension in writing to the Bureau within the initial 60-day compliance period. The application of an applicant which does not meet the conditions within the compliance period will be deemed withdrawn.

 (d)  The applicant will be issued a permit which is effective no sooner than 15 days after the following has been filed with the Bureau:

   (1)  Security in an amount as set forth in §  125.9 (relating to security requirements) or funding as set forth in §  125.10 (relating to funding by public employers).

   (2)  A certificate providing evidence of excess insurance as required by the Bureau.

   (3)  A guarantee agreement executed by its parent company or an affiliate as set forth in §  125.4 (relating to application for affiliates and subsidiaries), if required.

   (4)  Documents relating to any other requirement set by the Bureau to protect the compensation rights of employes.

 (e)  If upon review of the pertinent data under subsection (a) the Bureau finds that the applicant has not demonstrated its ability to meet its obligations, it will send to the applicant a preliminary denial notice of the application. The notice will state the documents, evidence and other data received from the applicant or otherwise reviewed or considered by the Bureau in rendering its preliminary determination.

 (f)  The applicant may request a conference with the Bureau upon receipt of the Bureau’s preliminary approval notice or denial notice. A conference request shall be made in writing within 20 days after the receipt of the preliminary notice. At the conference, the applicant may present additional evidence or data to support its application or the alteration of the conditions required in the preliminary approval notice. The applicant may present that information to the Bureau in writing, or in person, or both.

 (g)  After a conference and the receipt of written submissions, the Chief of the Self-Insurance Division of the Bureau will promptly review the entire record of the application and will issue a reconsideration decision on the application.

 (h)  An applicant shall have the right to appeal a reconsideration decision issued under subsection (g) with the Bureau within 30 days of the receipt of the reconsideration decision. Untimely appeals will be dismissed without further action by the Bureau.

   (1)  The Director of the Bureau will assign the appeal to a hearing officer who will schedule a de novo hearing on the appeal from the initial decision. The applicant will receive reasonable notice of the hearing date, time and place.

   (2)  The hearing will be conducted in a manner to provide the applicant and the Bureau the opportunity to be heard. The hearing officer will not be bound by strict rules of evidence. Relevant evidence of reasonably probative value may be received into evidence. Reasonable examination and cross-examination of witnesses will be permitted.

   (3)  Testimony will be recorded and a full record kept of the proceedings. The Bureau and the applicant will be provided the opportunity to submit briefs addressing issues raised.

   (4)  Following the close of the record, the hearing officer will promptly issue a written decision and order. The decision will include relevant findings and conclusions, and state the rationale for the decision. The decision will be served upon the applicant, the Bureau and counsel of record. The decision will include a notification to the applicant and the Bureau of further appeal rights to Commonwealth Court.

   (5)  The applicant or the Bureau, aggrieved by a decision rendered on an appeal, may file a further appeal to Commonwealth Court.

     (i)   An applicant which has been denied self-insurance may reapply after an annual audit report is published subsequent to the latest one submitted with the denied application.

   This section cited in 34 Pa. Code §  125.3 (relating to application); and 34 Pa. Code §  125.8 (relating to denial of renewal application).