R 408.43c Financial, loss experience and liability exposure analysis; notice of denial or termination.

Rule 13c. (1) The agency may decline to approve an application for, or may terminate the self-insured authority, if an employer is unable to demonstrate a position of reasonable solvency and the ability to pay benefits as prescribed in the act. The agency analysis of each nonpublic employer application shall include a review of the employer’s financial position and operating results. Standard financial ratio analysis and comparison to similar industry statistical data will be considered in the financial position analysis. Other information relevant to the applicant’s financial ability, including, but not limited to, the following, will be considered: (a) The historical operating results. (b) Evaluation of financial trends. (c) Banking relations. (d) Contingent liabilities. (e) Pending litigation. (f) Corporate guaranties. (g) Management team continuity and experience. (h) General and specific industry economic conditions. (i) Legal structure. (2) The agency’s analysis of the employer’s loss experience and liability exposure shall include, but is not limited to, the following: (a) Claims for not less than 3 policy years broken down by paid, reserve, and total incurred amounts. (b) Number of employees. (c) Payroll code classifications. (d) Excess liability insurance policy terms. (3) The agency shall mail notice of a denial or termination of self-insured authority to the employer. The notice must include the grounds for denial or termination. The employer may request a hearing in accordance with section 611(5) of the act, MCL 418.611, and R 408.43n.