Section 7-217. SELF-INSURANCE

 

217.1An employer who desires to be a self-insurer may apply for authorization in accordance with this section and in the manner prescribed by the Office.

 

217.2Under §35(a)(2) of the Act [§36-334(a)(2), D.C. Code, 1981 ed.], any employer who desires to be a self-insurer shall furnish satisfactory proof to the Office that he or she has met the following requirements:

 

(a)Secured or has sufficient financial resources to meet all obligations in regard to its potential liability under the Act;

 

(b)Obtained adequate excess or catastrophic loss insurance or has otherwise made adequate financial arrangements for the losses:

 

(c)Made adequate arrangements to provide promptly to its employees all necessary compensation and medical care required by the Act;

 

(d)Made a deposit of security (negotiable securities, surety bond or other financial bond) in the amount and form prescribed by the Office; and

 

(e)Agreed to carry out all requirements of the Act and this chapter.

 

217.3An employer who applies for the status of self-insurer shall secure the insurance coverage required by the Act until such time as authorization is issued by the Office.

 

217.4Application for self-insurance shall be made in a manner prescribed by the Office and shall contain at least the following information:

 

(a)A statement of the amount of the employer's payroll for the preceding twelve (12) month period;

 

(b)A statement of the average number of employees engaged in employment within the purview of the Act, or similar provisions of prior law, in the preceding twelve (12) month period;

 

(c)A statement of the number and kinds of injuries to employees resulting in disability of more than three (3) days' duration, or in death, during each of the preceding three (3) years;

 

(d)An itemized statement of the assets and liabilities of the employer;

 

(e)A statement describing the facilities maintained or the arrangements made for the medical and hospital care of injured employees;

 

(f)A statement describing the provisions and maximum amount of any excess or catastrophic insurance;

 

(g)Signature of the applicant over the typewritten name, and if the applicant is not an individual, signature of a duly authorized officer indicating official title;

 

(h)Sworn oath of the applicant and, where appropriate, the corporate seal of the applicant; and

 

(i)A statement pertaining to the proposed processing of claims. If claims are proposed to be processed "in house", a statement shall be submitted showing the qualifications of those individuals who will process claims. If a self-insured service organization is to be used, a profile of the organization shall be submitted showing its experience in the administration of claims in general and specifically under workers' compensation laws, both state and federal.

 

217.5The application shall be filed with the Office at the time and place and in the manner prescribed by the Office.

 

217.6In addition to the application requirements set forth in §217.4, the Office may require an applicant for self-insurance status to submit further financial or other information as it deems necessary.

 

217.7In evaluating the ability of an employer to be a self-insurer, including the amount and form of any security to be deposited with the Office, the Office shall consider the following:

 

(a)The financial standing of the employer;

 

(b)The nature of the work in which the employer is engaged;

 

(c)The degree of hazard to which employees are exposed;

 

(d)The amount of the employer's payroll;

 

(e)The provisions for excess insurance against catastrophic loss; and

 

(f)Any other data submitted by the applicant or required by the Office.

 

217.8Annually and at any other time as the Office may require or prescribe, each self-insurer shall submit each of the following reports:

 

(a)A sworn itemized statement of the self-insurer's assets and liabilities, or a balance sheet;

 

(b)A sworn statement showing by classifications the payroll of employees of the self-insurer who are engaged in employment within the purview of the Act or similar provisions of prior law; and

 

(c)A sworn statement covering the preceding twelve (12) month period, listing all death and injury cases which have occurred during the period, together with a report of the status of all outstanding claims.

 

217.9Whenever it is deemed necesary, the Office may, after reasonable notice, inspect or examine the books of account, records, and other papers of a self-insurer at the self-insurer's place of business for the purpose of verifying any financial statement submitted to the Office by the self-insurer or verifying any other information furnished to the Office in any report required by the Act or this chapter.

 

217.10.Each self-insurer shall permit the Office or its duly authorized representative to make an inspection or examination as the Office shall require. In lieu of this requirement the Office may, in its discretion, accept the report of a certified public accountant.

 

217.11Applicants for self-insurance, as a condition precedent to receiving authorization to be a self-insurer, shall give security for the payment of compensation and the discharge of all other obligations under the Act in the amount and form prescribed by the Office.

 

217.12The amount of security required by the Office shall be the amount that the Office deems reasonable, necessary, and sufficient to secure performance by the applicant of all obligations imposed upon an employer by the Act. Additions to the amount of security may be required at any time in the discretion of the Office.

 

217.13Only surety companies approved by the Treasurer of the District of Columbia may act as sureties on any security for obligations under the Act.

 

217.14Applications for self-insurance shall, as a condition precedent to receiving authorization to be a self-insurer, execute and file an undertaking in a manner prescribed by the Office.

 

217.15Applicants shall agree in the undertaking to do the following;

 

(a)To pay when due, as required by the Act, all compensation payable on account of injury or death of any of its employees injured within the purview of the Act;

 

(b)To furnish where necessary, medical, surgical, hospital and other attendance, treatment, care, and vocational rehabilitation as required by the Act;

 

(c)To give or deposit with the Office security in the amount and form required by the Office;

 

(d)To authorize the Office to proceed against, sell or otherwise collect from the security if the employer fails to meet its obligations under the Act;

 

(e)To timely pay the appropriate share of the cost of administration of the Act; and

 

(f)To maintain excess insurance coverage or other catastrophic loss security as the Office shall prescribe.

 

217.16No initial authorization as a self-insurer shall be granted for a period in excess of twelve (12) months and the expiration date thereof shall fall on the thirtieth (30th) day of September.

 

217.17A self-insurer who has made continuing deposit of security as prescribed by the Office and who has filed the appropriate financial and other reports as required by the Office, shall be deemed to have reapplied for self-insurance for the following twelve (12) month period if the employer does not inform the Office to the contrary in writing on or before August 1, preceding the September 30th expiration date.

 

217.18The Office may, for good cause shown, suspend or revoke the authorization of any self-insurer.

 

217.19The occurrence of any one of the following events shall constitute good cause to suspend or revoke the authorization of a self-insurer:

 

(a)Failure by a self-insurer to comply with any provision or requirement of the Act or of this chapter or with any lawful order or communication of the Office;

 

(b)Failure or insolvency of the surety on the indemnity bond; or

 

(c)Impairment of financial responsibility.

 

217.20A self-insurer who desires to terminate the status of a self-insurer and obtain a refund of the deposited security shall file with the Office a sworn statement indicating the following:

 

(a)All outstanding liabilities for compensation;

 

(b)All pending claims for compensation;

 

(c)All accidents that have occurred during the period up to three (3) years prior to the date of the statement; and

 

(d)Evidence of insurance coverage as required by the Act and §214 and §215 of this chapter.

 

217.21The Office shall return the deposited security (or the balance thereof) to the employer only after all claims and liabilities have been adjudicated and paid or the Office determines that adequate arrangements for the payment have been made.