North Carolina General Statutes 97-170. License applications; required information
(a) No employer shall self-insure its workers’ compensation liabilities under the Act unless it is licensed by the Commissioner under this Article. This subsection does not apply to an employer authorized to self-insure its workers’ compensation liabilities under the Act prior to December 1, 1997, whose authority to self-insure its workers’ compensation liabilities under the Act has not terminated after that date.
(b) An applicant for a license as a self-insurer shall file with the Commissioner the information required by subsection (d) of this section on a form prescribed by the Commissioner at least 90 days before the proposed licensing date. No application is complete until the Commissioner has received all required information. A copy of the application shall also be filed with the North Carolina Self-Insurance Security Association at the same time the application is filed with the Commissioner.
(c) Only an applicant whose total fixed assets amount to five hundred thousand dollars ($500,000) or more may apply for a license. In judging the applicant’s financial strength and liquidity relative to its ability to comply with the Act, the Commissioner shall consider all of the following relative to the applicant:
(1) Organizational structure and management.
Terms Used In North Carolina General Statutes 97-170
- Act: means the Workers' Compensation Act established in Article 1 of this Chapter. See North Carolina General Statutes 97-165
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Association Aggregate Security System: means the security system established pursuant to N. See North Carolina General Statutes 97-165
- Commissioner: means the Commissioner of Insurance. See North Carolina General Statutes 97-165
- Corporate surety: means an insurance company authorized by the Commissioner to write surety business in this State. See North Carolina General Statutes 97-165
- CPA: means a CPA who is in good standing with the American Institute of Certified Public Accountants and in all states in which the CPA is licensed to practice. See North Carolina General Statutes 97-165
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Financial statement: means a financial statement as defined by accounting principles generally accepted in the United States or a financial statement prepared in accordance with International Financial Reporting Standards. See North Carolina General Statutes 97-165
- following: when used by way of reference to any section of a statute, shall be construed to mean the section next preceding or next following that in which such reference is made; unless when some other section is expressly designated in such reference. See North Carolina General Statutes 12-3
- Foreign registered public accounting firm: means a public accounting firm that is organized and operates under the laws of a non-United States jurisdiction, government, or political subdivision and is registered and in good standing with the Public Company Accounting Oversight Board and authorized by the Board to prepare or issue any audit report with respect to any issuer. See North Carolina General Statutes 97-165
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Management: means those persons who are authorized to direct or control the operations of a self-insurer. See North Carolina General Statutes 97-165
- Person: means an individual, corporation, partnership, limited liability company, association, joint stock company, trust, unincorporated organization, or any similar entity or any combination of the foregoing acting in concert. See North Carolina General Statutes 97-165
- Self-insurer: means an individual self-insurer as defined by N. See North Carolina General Statutes 97-165
- state: when applied to the different parts of the United States, shall be construed to extend to and include the District of Columbia and the several territories, so called; and the words "United States" shall be construed to include the said district and territories and all dependencies. See North Carolina General Statutes 12-3
(2) Financial strength.
(3) Source and reliability of financial information.
(4) Risks to be retained.
(5) Workers’ compensation loss history.
(6) Number of employees.
(7) Claims administration.
(8) Excess insurance.
(9) Access to excess insurance.
(d) The license application shall be comprised of the following information:
(1) Applicant name; organizational structure of the applicant, including any controlling entity, subsidiaries, or affiliates; location of principal office; contact person; organization date; type of operations within this State; management background; and addresses of all plants or offices in this State.
(2) Certified audited financial statements prepared by a CPA or submitted by a foreign registered public accounting firm for the two most recent years. The financial statement presentation shall facilitate application of ratio and trend analysis.
(3) Evidence of the insurance required by N.C. Gen. Stat. § 97-190
(4) Repealed by Session Laws 1999-132, s. 13.7, effective June 4, 1999.
(5) For applicants with 20 or more full-time employees, a certificate or other evidence of safety inspection, satisfactory to the Commissioner, that certifies that all safety requirements of the Department of Labor have been met.
(6) Summary of workers’ compensation benefits paid for the last three calendar years and the total liability for all open claims within 30 days or some other period acceptable to the Commissioner not to exceed 90 days, before the filing of the application.
(7) Summary, by risk classification, of annual payroll and number of employees within the State.
(8) Repealed by Session Laws 2005-400, s. 10, effective January 1, 2006.
(9) Proof of compliance with the claims administration provisions of Article 47 of Chapter 58 of the N.C. Gen. Stat..
(10) A letter of approval for membership by the North Carolina Self-Insurance Security Association.
(e) Every applicant shall execute and file with the Commissioner an agreement, as part of the application, in which the applicant agrees to participate in the Association Aggregate Security System, or if excluded from the Association Aggregate Security System, to deposit with the Commissioner pursuant to N.C. Gen. Stat. § 97-185 cash, acceptable securities, an irrevocable letter of credit in a form acceptable to the Commissioner issued by a bank acceptable to the Commissioner, or a surety bond issued by a corporate surety, or a combination thereof, that will guarantee the applicant’s compliance with this Article and the Act. (1997-362, s. 4; 1999-132, ss. 13.6, 13.7; 2003-212, s. 25; 2005-400, s. 10; 2009-172, s. 6; 2019-179, s. 10.)