Contingency Reserve Funding Level Required by the Rules Governing Group Self-Insurers of Liability Under the Virginia Workers' Compensation Act (14 VAC 5-370-10 et seq., formerly Insurance Regulation No. 16), issued April 23, 1991

STEVEN T. FOSTER COMMISSIONER OF INSURANCE Box 1157 RICHMOND, VA 23209 TEL EPHONE: (804) 786-3741 TD D/VO ICE: (804) 225-3806 STATE CORPORATION COMMISSION BUREAU OF INSURANCE A p ril 23, 1991 ADMINISTRATIVE LETTER 1991-7 TO: ALL GROUP SELF-INSURANCE ASSOCIATIONS RE: CONTINGENCY RESERVE FUNDING LEVEL REQUIRED BY THE RULES GOVERNING GROUP SELF-IN SURERS OF L I A B IL IT Y UNDER THE VIRGINIA WORKERS' COMPENSATION ACT (INSURANCE REGULATION 16) The p u r p o s e o f t h i s l e t t e r i s t o s e t f o r t h th e p r o c e d u r e s under w h ic h a g r o u p s e l f - i n s u r a n c e a s s o c i a t i o n may a p p l y t o t h e C o m m is s io n f o r a p p r o v a l t o c e a s e a d d i t i o n a l f u n d i n g o f i t s c o n t i n g e n c y r e s e r v e a s e s t a b l i s h e d by S e c t i o n 12 o f t h e r e f e r e n c e d r e g u l a t i o n . Once an A s s o c i a t i o n ’ s co n tin g en cy r e s e r v e r e a c h e s an amount eq u al t o t w e l v e p e r c e n t o f i t s l a t e s t t h r e e y e a r s ' a v e r a g e a n n u a l p r e m i u m , a r e q u e s t may b e m ade t h a t t h e a n n u a l f u n d i n g r e q u i r e m e n t be s u s p e n d e d . The C o m m issio n w i l l r e v i e w e a c h r e q u e s t on an i n d i v i d u a l b a s i s to d e term in e th e fu n d in g adequacy and f u t u r e a d d i t i o n a l r e q u ir e m e n t s . Such re v ie w w i l l c o n s i d e r t h e l e v e l s o f s p e c i f i c and a g g r e g a t e e x c e s s c o v e r a g e and an A s s o c i a t i o n ' s c l a i m s ' h i s t o r y , and may o r may n o t r e s u l t in Commission a p p r o v a l t o suspend f u r t h e r c o n t r i b u t i o n s . A p p ro v a ls, i f g r a n t e d , w i l l be v a l i d f o r one y e a r o n ly . A p p l i c a t i o n sh o u ld be made in w r i t i n g t o : Paul W. H o lz g r e fe , C h ie f Examiner Bureau o f In su ra n ce P. O. Box 1157 Richmond, VA 23209 S i n c e r e l y Steven T. F o s t e r Commissioner o f I n su ra n c e STF: fah