§ 125.133. Application.
(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.
Source The provisions of this § 125.133 amended October 23, 1998, effective October 24, 1998, apply to a group self-insurance fund for fund year commencing after final publication in the Pennsylvania Bulletin, 28 Pa.B. 5459; amended July 13, 2001, effective July 14, 2001, 31 Pa.B. 3841. Immediately preceding text appears at serial pages (250140) to (250142).
Cross References This section cited in 34 Pa. Code § 125.143 (relating to restriction on the use of assets).
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