Md. Code Regs. 14.09.13.03

Current through Register Vol. 51, No. 25, December 13, 2024

Section 14.09.13.03 - Revocation of Self-Insured Status

A. Approval for self-insurance privileges shall be continuous unless and until revoked or withdrawn.

B. Deterioration in the financial strength of the self-insurer, which may affect the ability of the self-insurer to pay current and future claims when due, may result in modification or revocation of self-insurance privileges.

C. Failure of a self-insurer to satisfy the Commission of its financial ability to secure compensation to pay current and future claims includes the following conditions:

(1) 3 straight years of losses or negative cash flow from operations;

(2) Negative tangible net worth;

(3) 8 straight quarters of losses;

(4) Noncompliance with lender covenants;

(5) Financial instability of surety, excess carrier, or letter of credit issuer;

(6) Public disclosure of accounting irregularities;

(7) Potential insolvency or bankruptcy; or

(8) Any other issue that shows financial instability.

D. An employer whose self-insurance privileges have been revoked shall continue to provide competent administration of disputed claims. If it is determined by the Commission that the claims are not being competently administered or reported, the Commission shall notify the employer. If the problem is not resolved to the satisfaction of the Commission within a reasonable period of time, the Commission may require the designation of a new claims administrator and the costs shall be borne by the employer.

E. Whenever an employer voluntarily withdraws or is terminated or revoked from the self-insurance program, the Commission shall require the employer to provide all available information regarding case reserves and incurred but not reported estimates of remaining liability while self-insured.

Md. Code Regs. 14.09.13.03