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State of Alaska > DOLWD > Workers' Compensation  > Self Insurance

Renewing Status as a Self-Insured Employer in Alaska

Requirements
8 AAC 46.010, 8 AAC 46.040, and 8 AAC 46.080 provide that a company may maintain its Certificate of Self-Insurance in Alaska if it has:

(1) a safety/loss control program in effect;
(2) in combination with its parent company or subsidiary companies of the employer, a minimum of 100 employees either in Alaska or in another state or states;
(3) a net worth of at least $10,000,000;
(4) the financial ability to meet the self-insured’s financial obligations in Alaska;
(5) available claims facilities through its own staffed adjusting facilities located within the state or through independent, licensed, resident adjusters with power to effect settlement within the state. For purposes of this paragraph, insurance companies with a certificate of authority from the Department of Commerce and Economic Development’s Division of Insurance, and with staff adjusters in this state, are considered independent, licensed, resident adjusters;
(6) a security deposit in the amount of $600,000 or 125% of the total outstanding accrued self-insured workers’ compensation liabilities for the year immediately preceding the application, whichever amount is greater. The security deposit must be in a form of an irrevocable letter of credit from a financial institution authorized to conduct business in Alaska under AS 06.01.010-06.40.190, with the State of Alaska, Department of Labor and Workforce Development listed as the beneficiary; and
(7) performed an independent actuary’s review at least once every three years.

Filing Requirements
An application for Renewal of Certificate of Self-Insurance must be made on Form 07-6130.

An applicant that has multiple subsidiaries must list each subsidiary to be covered under the certificate of self-insurance, including the legal name, mailing address, federal identification number, and ownership information for each subsidiary.

When the applicant is a wholly owned subsidiary of another company, a Parent Company Guarantee must be included with the Renewal of Certificate of Self-Insurance.

If the applicant is a joint venture, the partner with the majority interest in the venture must be self-insured in Alaska, or qualified to be self-insured in this state. The joint venture application must include financial information for each partner in the venture, and the application must be accompanied by a copy of the joint venture’s operating agreement.

The application must be accompanied by the applicant's audited financial statements for the previous fiscal or calendar year immediately preceding the year in which the self-insured applies for renewal. The applicant may submit consolidated financial statements of its parent company if the applicant does not have its own audited financial statements and the employer is a majority or wholly-owned subsidiary. A public entity must submit audited comprehensive annual financial reports, including detailed schedules.

The applicant shall provide a summary of the employer’s or the employer’s parent company payroll and loss runs for the fiscal or calendar year immediately preceding the filing of the application. The summary must include the number of employees, amount of payroll, number of medical-only claims, number of indemnity claims, number of fatalities, the dollar amount of total incurred losses, the dollar amount of paid losses, the dollar amount of reserves for incurred but unpaid losses, the dollar amount of losses within the retention limit, the dollar amount of losses subject to reinsurance or excess recovery, and the dollar amount of losses subject to subrogation recovery.

The applicant shall submit a description of its proposed excess insurance coverage, including effective dates, type of coverage, conditions and exclusions, with specific and aggregate retentions and policy limits. Excess coverage must be written by a casualty insurance company or reinsurance company authorized to transact business in Alaska, and must be rated A- or higher with a stable outlook by a nationally recognized rating organization.

The application for self-insurance must be accompanied by a security deposit in the form of an irrevocable letter of credit from a financial institution authorized to conduct business in Alaska under AS 06.01.010-06.40.190, with the State of Alaska, Department of Labor and Workforce Development listed as the beneficiary. The amount of the security deposit must be in the amount of $600,000 or 125% of the total outstanding accrued self-insured workers’ compensation liabilities for the year immediately preceding the application, whichever amount is greater. If the employer has been self-insured in Alaska for five or more years, the employer may submit a written request for an exemption from posting a security deposit. The exemption request should state the reasons why the employer should not be required to post a security deposit.

Each self-insurance renewal applicant is required to submit an independent actuary’s report once every three years, accompanied by a letter signed by an officer of the company that reserves are adequate and have been accounted for in the company’s balance sheet.

The applicant shall submit with the application a detailed outline of its safety/loss control program.

The applicant shall submit a binder of its proposed excess insurance coverage.

The above material shall be mailed to the Division of Workers’ Compensation at least 60 days prior to the expiration of its Certificate of Self-Insurance.

 

 

 

 

 

 

 

 

Requirements

8 AAC 46.010 provides that a company may maintain its Certificate of Self-Insurance in Alaska if it has

  1. Maintained the financial ability to meet its obligations
  2. Maintained a claims facility through its own staffed adjusting facilities located within the state or through independent, licensed, resident adjusters with power to effect settlement within the state; for purposes of this paragraph, insurance companies with a certificate of authority from the division of insurance, Department of Commerce and Economic Development, and with staff adjusters in this state, are considered independent, licensed, resident adjusters
  3. Maintained a safety/loss control program
  4. In combination with its parent company or subsidiary companies of the employer, a minimum of 100 employees either in Alaska or in another state or states; and
  5. Maintained a net worth of at least $10,000,000.
  6. A security deposit in the amount of $600,000 or 125% of the total accrued workers’ compensation liability, whichever is greater. The security deposit must be in the form of a irrevocable letter of credit from a financial institution authorized to conduct business in Alaska
  7. Performed an independent actuarial review at least once every three years.

An employer who is a majority or wholly owned subsidiary must have its obligations under the Act guaranteed by its parent company.

Filing Requirements

Application for renewal of Certificate of Self-Insurance must be made on Form 07-6130.

A parent company that has multiple subsidiaries as Alaska employers must submit a list of those subsidiaries, including the legal name, address, and ownership information for each subsidiary.

When the applicant is a subsidiary of another company, a Parent Company Guarantee must be included with the Application for Certificate of Self-Insurance. The application also must be accompanied by the applicant's audited financial statements for the previous fiscal or calendar year immediately preceding the filing of the application. The applicant may submit consolidated financial statements of its parent company if the applicant does not have its own audited financial statements and the employer is a majority or wholly owned subsidiary. A public entity must submit audited comprehensive annual financial reports, including detailed schedules.

The applicant shall submit a binder of its proposed excess insurance coverage.

The above material shall be mailed to the Division of Workers’ Compensation at least 60 days prior to the expiration of its Certificate of Self-Insurance.

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Juneau, AK 99811-5512

 
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Page Updated August 1, 2018