Group Self-Insurer Applicants: Michigan statute allows two or more employers in the same industry with combined assets of $1,000,000 or more to enter into an agreement to pool their liabilities under the Michigan Worker's Disability Compensation Act of 1969, as amended, for the purpose of qualifying as self-insurers. Application for group self-insured authority is made on form WC-402G. Form WC-402G, the applicable statutory requirements and administrative rules are attached. All administrative rules and the statute should be reviewed to gain an understanding of the requirements for group self-insured authority in the state of Michigan. All requirements as set forth in Rule 13e must be met before authority will be granted. The initial board of trustees must develop a definition of the industry that will make up the group. The definition must be approved by the Workers Compensation Agency (Agency). An indemnity agreement (for nonpublic employer group self-insurers only), following the language of the sample attached, and the proposed by-laws of the group must be submitted with the application for Agency consideration. An application for membership in the group (and indemnity agreement for all nonpublic employers) must be completed for each member of the group applying for coverage on the inception date of the group. The form must be approved by the Agency (a sample is attached). The trustees of the group must provide proof satisfactory to the Agency that the annual gross premium of the starting group will not be less that $500,000 per year. Specific excess and aggregate excess insurance by an admitted carrier in an amount acceptable to the Agency will be required. The loss fund on the aggregate contract should be no more than 75 percent of collected premium. The minimum loss fund on the aggregate excess contract must be no more that 80 percent of the estimated loss fund. A signed service contract designating an approved service company to handle the administration of claims and loss control must be furnished. A blanket fidelity bond in an amount of at least $1,000,000 will be furnished to cover all individuals, including employees of the service company, who will be involved in the handling of monies of the group. A surety bond or financial security endorsement will also be required. The amount will be determined after the application and supporting documentation have been provided. WC-402G (Rev. 9/11) American LegalNet, Inc. www.FormsWorkFlow.com The decision for granting group self-insured authority is based on the individual financial condition of each member applying for membership on the inception date, together with the overall financial condition of the members taken as a whole. The group must demonstrate that it will collect sufficient premium to fully fund all administrative expenses and the loss fund (as estimated by the aggregate excess insurer). The approval process for group selfinsured authority normally requires two to three meetings and at least 45 days. Incomplete applications or the failure to provide any of the requirements set forth in Rule 13e will delay the process and decision. Nonpublic employers that are approved to form group self-insurance programs in the state will contribute to the Self-Insurers Security Fund, Second Injury Fund, Dust Disease Fund and Safety Education and Training Levy according to the statute. The group will make reports on behalf of the groups employer members to this Agency as any insurance company would. Current assessment amounts can be secured by contacting the Funds Administration, 2501 Woodlake Circle, Okemos, MI 48864 (517) 284-8888. After the initial group self-insured authority is granted, new employers will be admitted to the group only after completing the individual membership application and approval is granted for that member by the group and the Agency. The authority for the privilege of operating as a group self-insurer is renewed annually following the initial approval date. Form WC-402G shall be used in seeking renewal authority. If we can be of assistance in the completion of forms, or answer any questions about group self-insurers in Michigan, you may contact our offices at (517) 284-8939. Attachments WC-402G (Rev. 9/11) American LegalNet, Inc. www.FormsWorkFlow.com WORKERS DISABILITY COMPENSATION GROUP SELF-INSURER APPLICATION Michigan Department of Licensing and Regulatory Affairs Workers Compensation Agency Self-Insured Programs PO Box 30016 Lansing, Michigan 48909 New Renewal LARA is an equal opportunity employer/program. Auxiliary aids, services and other reasonable accommodations are available upon request to individuals with disabilities. Authority: Completion: Penalty: Workers Disability Compensation Act of 1969, as amended Mandatory Denial/Termination of Self-Insured Status 1. APPLICANT: Applicant Group: Address: City, State, Zip Code: FEIN No. 2. TRUSTEES: Business Address: Name: 3. ADMINISTRATOR: Telephone: Fax Number: Name: Address: 4. CLAIMS PROGRAM: Telephone: Fax Number: Service Company: Address: 5. SAFETY PROGRAM: Telephone: Fax Number: Name: Address: 6. 7. ON NEW APPLICATIONS: Attach an exhibit detailing the following by applicable code classification for the proposed year: code classification, payroll, rate per $100, manual premium, modified premium and discount, if applicable. ON RENEWAL APPLICATIONS: Attach an exhibit detailing the following by applicable code classification for the renewal year: code classification, payroll, rate per $100, manual premium, modified premium and discount, if applicable. Group Experience Modifier: Standard Premium: Discounts: Collectable Premium: Number of Employer Members: (Attach Membership List) Excess Carrier: Policy Number: Total Estimated Premium: RENEWAL APPLICANTS MUST ATTACH A CURRENT LOSS SUMMARY FOR ALL GROUP YEARS, AND A COPY OF THE CURRENT FINANCIAL REPORT. WC-402GR (Rev. 9/11) American LegalNet, Inc. www.FormsWorkFlow.com 8. EXCESS INSURANCE AND BOND INFORMATION: Aggregate Excess Policy Limit: Term: Loss Fund % of Collectable Premium: Amount: Bond Number: Carrier: Specific Excess Policy Limit: Retention: Term: Fidelity Policy: Estimated Loss Fund: Surety Bond: Amount: Bond Number: Carrier: Minimum Loss Fund: ALL EXCESS INSURANCE TERMS MUST BE CONFIRMED AND PROVIDED WITH THE APPLICATION, INCLUDING A COPY OF THE GROUPS FIDELITY POLICY WITH PROOF THAT THE FIDELITY POLICY IS CURRENT. THIS APPLICATION MUST BE RECEIVED BY THE AGENCY 30 DAYS PRIOR TO IT