Sec. 14.09.14.01-1. Application

A. Application for governmental group coverage for the express purpose of establishing a group self-insurers' fund, to be administered under the direction of an elected board of trustees, and to provide workers' compensation coverage for a group of public employers of the same type of unit, shall be made to the Workers' Compensation Commission.

B. The application shall be made on a prescribed form and shall contain answers to all questions and shall be accompanied by the application fee in the amount as may be approved by the Commission from time to time.

C. Additional Requirements. The application, as submitted by the initial board of trustees of self-insurers' fund, shall be accompanied by all of the following:

(1) A copy of the bylaws of the proposed group self-insurers' fund.

(2) An individual application of each member of the group applying for coverage in the fund.

(3) A current financial statement and a budget report that shows planned expenditures are funded.

(4) Evidence of the financial ability of the group to meet its obligations under the Workers' Compensation Law.

(5) A composite listing of the estimated standard premium to be developed by each member of the group individually and in total as a group.

(6) Proof of payment by each member of not less than 25 percent of the estimated annual standard premium into a designated depository. For governmental entities, a letter of intent signed by the responsible financial officer pledging payment within 10 days of the approval of the fund by the Commission may constitute proof of payment.

(7) A confirmation of excess insurance by an authorized carrier in an acceptable amount and which complies with the requirements in Regulation .08 of this chapter.

(8) Designation of a qualified employee or administrator of the association or group, or a qualified service company with a copy of the signed service agreement.

(9) Designation of the initial board of trustees.

(10) Proof of a fidelity bond and errors and omissions policy in a form and amount acceptable to the Commission.

(11) If required, a surety bond written by an authorized carrier in an amount acceptable or other acceptable security.

(12) A copy of a trust and indemnity agreement which shall be subject to approval by the Commission. The agreement shall contain a provision jointly and severally binding the group and each member of it to comply with the provision of the Workers' Compensation Law.

(13) A breakdown of all projected administrative expenses for the fund year in an amount and as a percentage of the annual standard premium collected.

(14) Proof, satisfactory to the Commission, that the annual gross premiums of the fund will not be less than $500,000. The premium collected from each member shall be computed by applying the appropriate manual rates per payroll code classification and multiplying the manual rate by an experience modification factor, if the modification factor is applicable.

(15) Proof that the fund has within its own organization ample facilities and competent personnel to service its own program with respect to underwriting matters and industrial safety engineering or shall contract with a qualified service company or employer adjusters to provide these services. A qualifiedservice company shall be used to handle claims adjusting and reporting of loss data.