.08 Application for Certificate of Authority.

A. A person or entity may not act as a workers' compensation self-insurance group except as so authorized by the Commissioner.

B. Application for a certificate of authority shall be made to the Commissioner on a form prescribed by him and shall include a $25 nonrefundable filing fee.

C. The application form shall be accompanied by the following:

(1) A list of the names of the members of the group, to include each memberís:

(a) Corporate name;

(b) Main business address;

(c) State of domicile; and

(d) Date upon which the memberís fiscal year ends;

(2) Proof of compliance with the requirements of these regulations;

(3) A copy of the group's articles of association, if any;

(4) A copy of agreements with the administrator and with any service company;

(5) A copy of the group's bylaws, which shall contain, at a minimum:

(a) A copy of or written description of the underwriting standards for acceptance and continuance in the group;

(b) A copy of or written description of the method for selecting the board of trustees and administrator of the group;

(c) A list of the members of the board of trustees and the term of office of the board of trustees; and

(d) A copy of or written description of the method for amending the group's bylaws;

(6) A copy of regulations adopted by the trustees, which shall be binding on the administrator and service company and which shall contain, at a minimum:

(a) A description of the manner in which excess funds and claim reserves shall be invested;

(b) A description of the frequency and extent of loss control and safety engineering services provided to members of the group;

(c) The size of the common claim fund;

(d) A schedule for the collection of premiums, including a definition of "delinquent premium";

(e) A copy of or written description of the membership, admission, and expulsion procedures;

(f) A copy of or written description of the delineation of authority granted to the administrator, board of trustees, and service company; and

(g) A copy of the procedures for handling disputes regarding premium payments by members;

(7) A copy of the agreement between the group and each member securing the payment of workers' compensation benefits;

(8) A list of the initial board of trustees and administrator of the group;

(9) The address in this State where the books and records of the group will be maintained at all times;

(10) A financial statement on a form acceptable to the Commissioner showing the financial ability of the group to pay the workers' compensation obligations of its members;

(11) Proof of payment to the group by each member of not less than 25 percent of that member's first year estimated annual net premium on a date prescribed by the Commissioner;

(12) A statement outlining the guidelines used to determine the types of businesses eligible for membership in the group;

(13) Copies of executed agreements with each member assuming joint and several liability for obligations of the group in the event of insolvency of the Self-Insurers' Guaranty Fund;

(14) A description of the arrangements whether in-house or under contract, for handling claims; and

(15) A report on the financial condition of each member in a format acceptable to the Commissioner, based on each memberís most recent fiscal year-end data, which shall include the following information for each member:

(a) Total assets;

(b) Total liabilities and net worth;

(c) Total sales or revenues;

(d) Net profit;

(e) The memberís fiscal year-end date; and

(f) The basis for reporting the financial information, including whether the report was prepared by a certified public accountant and presented in conformity with generally accepted accounting principles.

D. At the request of the Commissioner, the group shall submit additional financial information or financial statements for any or all members of the group.

E. To obtain and maintain its certificate of authority, a group shall comply with the following requirements, as well as with any other requirements established by law or regulation:

(1) Provide notice to the Commissioner as soon as practicable of any change in the information required to be filed under §B or C of this regulation; and

(2) Maintain combined net assets of all members of at least $1,000,000 as shown by the most recent annual financial report of one or more members, each of which is prepared by an independent certified public accountant and in conformity with generally accepted accounting principles, and submitted on behalf of the group as a whole.