DWD 80.60(4)(a) (a) Employers other than those specified in sub. (3), but including those specified in sub. (3) (c), desiring self-insurance shall submit an application on a form available from the department. A non-refundable fee, determined by the department as described in par. (ag), per employer, shall accompany the initial application. If the application is approved, the department shall permit self-insurance by written order. Every 3 years, a self-insured employer shall submit an application to renew self-insurance at least 60 days before the expiration date specified in the department’s order. Each quarter, or more often if requested by the department, a self-insured employer shall submit the most current financial statements to the department. Each year, a self-insured employer shall report work-injury claims payments to the department and other information related to worker’s compensation liability requested by the department. A self-insured employer shall immediately report to the department in writing any change in organizational structure that differs from the information provided in the annual report submitted to the department, including mergers, acquisitions, company name changes, consolidation, sale, or divestiture of divisions or subsidiaries. After a change in organizational structure, the department may revoke or modify the exemption from the duty to insure by providing reasonable written notice to the self-insured employer. If these changes result in the creation of a new parent or subsidiary, the department may waive or modify the requirement in par. (b) 1. to submit 5 years of audited financial statements. A fee of $200, per employer, and the assessment surcharge described in par. (am) may be billed by the department at the same time as the annual assessment under s. 102.75 (1), Stats. Self-insurance shall expire on the day specified by the department in its order. Unless the context indicates otherwise, all information submitted to the department to comply with this section shall be submitted on the latest version of a department approved form.

DWD 80.60 Note Note: For information regarding forms contact the worker’s compensation division, bureau of insurance programs, 201 East Washington Avenue, P.O. Box 7901, Madison, Wisconsin 53707.

DWD 80.60(4)(ag) (ag) In addition to any fee-for-service costs under par. (ax), the department shall charge each initial applicant for self-insurance a flat fee which the department estimates is the average cost for department employees to review the application for self-insurance, including employee salary and fringe benefits, supplies services and administrative costs, and information technology charges. The department shall review and, if necessary, modify the fee at least every 2 years.

DWD 80.60(4)(am) (am) In addition to any fee-for-service costs under par. (ax), each year the department shall assess each self-insured employer except those specified in sub. (3), but including those specified in sub. (3) (c), a $200 fee and a proportionate share of the department’s remaining costs to administer the self-insurance program after deducting the total amount estimated to be collected from the $200 fees and the fees charged under par. (ag) for initial applications. The department shall determine the assessment amount under this paragraph in the same manner as costs and expenses are apportioned in s. 102.75 (1), Stats.

DWD 80.60(4)(ax) (ax) To assist the department in evaluating an initial application or a renewal application for self-insurance, the department may contract for financial, loss control or other fee-for-service expertise or it may direct the applicant to provide the necessary information. The department shall charge the applicant for self-insurance the full cost of any fee-for-service expenses which the department incurs in evaluating the application for self-insurance. If these charges are related to an application for renewal of self-insurance, the department may bill the employer at the same time as the annual assessment under s. 102.75 (1), Stats.

DWD 80.60(4)(b) (b) The minimum requirements necessary for initial consideration for self-insurance are set forth in this paragraph. References in this paragraph to “board of directors” and “stockholders of the corporation” apply only to corporations but an equivalent requirement as determined by the department shall be applied to sole proprietorships, partnerships and other forms of business ownership.

DWD 80.60(4)(b)1. 1. The applicant, when submitting an initial request for self-insurance, shall submit audited financial statements (which includes the opinion of a certified public accountant) for a minimum of the latest five. Except as authorized by the department, employers self-insured under this subsection shall submit to the department audited or unaudited financial statements each quarter and audited financial statements each year.

DWD 80.60(4)(b)2. 2. If the employer is a corporation or a partnership which is a majority or wholly owned subsidiary, it shall submit to the department a guaranty of payments by the ultimate or top parent company on a department form and a certified copy of the resolution adopted by the board of directors of the parent corporation.

DWD 80.60(4)(b)3. 3. If the employer is a corporation, it shall submit a certified copy of the resolution adopted by the board of directors authorizing the execution of the initial application:

DWD 80.60(4)(b)3.a. a. Applications by organizations other than corporations shall be signed by one or more persons possessing authority to execute such application.

DWD 80.60(4)(b)3.b. b. Partnerships must submit a consent by all the partners that all individuals executing the application have the authority to act for the applicant partnership.

DWD 80.60(4)(b)4. 4. Corporations, limited partnerships and limited liability companies shall be registered in the office of the department of financial institutions.

DWD 80.60(4)(b)5. 5. The employer shall submit a copy of its current safety and loss control plan.

DWD 80.60(4)(c) (c) The following criteria may be considered by the department in evaluating the qualifications of an applicant for the initial application or renewal of self-insurance status:

DWD 80.60(4)(c)1. 1. The financial strength and liquidity of the employer to include: profit and loss history; financial and performance ratios; characteristics and trends for the employer or the consolidated group of employers to which the employer belongs; characteristics and trends for other employers of the same or the most similar industry in which the employer or the employer’s consolidated group is involved;

DWD 80.60(4)(c)2. 2. The employer’s organizational structure, management background, kind of business, length of time in business, and any intended or newly implemented reorganization including but not limited to merger, consolidation, acquisition of new business, divesting or spinning off of assets or other changes;

DWD 80.60(4)(c)3. 3. The nature and extent of the employer’s business operations and assets in the state of Wisconsin;

DWD 80.60(4)(c)4. 4. The employer’s bond or other business ratings;

DWD 80.60(4)(c)5. 5. The number of employer’s employees, payroll and hours worked in Wisconsin;

DWD 80.60(4)(c)6. 6. The employer’s performance indicators under ch. 102, Stats., including, but not limited to, promptness or time taken in making first indemnity payments, promptness or time taken in submitting first reports, and injury and illness incidence and severity rates;

DWD 80.60(4)(c)7. 7. The existing or proposed claims administration, occupational health, safety, and loss control programs to be maintained by the employer. The department may require certification of the occupational safety and health program by state or independently qualified specialists;

DWD 80.60(4)(c)8. 8. The worker’s compensation loss history, experience modification factor, reported losses, loss reserves and worker’s compensation premium of the employer; and

DWD 80.60(4)(c)9. 9. Excess insurance, surety bond, cash deposit or pledges of the employer, guaranty by the parent company, or other guarantees or pledges acceptable to the department.

DWD 80.60(4)(d) (d) The required minimum bond, minimum amount of cash, letter of credit or securities deposits, minimum acceptable excess insurance upper limit, maximum excess insurance retention, or other security satisfactory to the department, shall be determined after the application has been reviewed and analyzed by the department. The employer and the employer’s surety or other agent providing security shall use the latest version of any forms required by the department. All surety bonds and excess policies shall be written on standard forms approved by the Wisconsin compensation rating bureau or the commissioner of insurance, or both. Any change in the language used in the approved standard form is not accepted unless the department approves it in writing. The following conditions shall also apply to self-insured employers:

DWD 80.60(4)(d)1. 1. Surety bonds shall be written by companies authorized to transact surety business in Wisconsin and acceptable to the department.

DWD 80.60(4)(d)2. 2. Cash or equivalent securities shall be deposited with banks or trust companies authorized to exercise trust powers in Wisconsin and acceptable to the department. These securities shall be negotiable and converted into cash at anytime by the depository at the request of the department.

DWD 80.60(4)(d)3. 3. If excess insurance is required by the department, it shall be procured from a licensed excess insurance carrier and written on the basis of rates and policy form filed with and approved by the state of Wisconsin commissioner of insurance. The policy for the required excess insurance shall be filed with and approved by the Wisconsin compensation rating bureau.

DWD 80.60(4)(d)4. 4. Each self-insured employer shall provide security of at least $500,000. The department may increase the minimum required security amount after considering the criteria in par. (c).

DWD 80.60(4)(d)5. 5. If the self-insured employer provides a surety bond, the surety company shall pay worker’s compensation liabilities of the employer up to the aggregate amount of the bond without deducting any of its costs for investigating, paying, defending against, or providing other services related to the worker’s compensation claims. If a self-insured employer has more than one surety bond, the surety company whose bond is in effect on the date of injury is liable for claims related to that injury.