Ariz. Admin. Code § R20-5-1501 - Definitions
In addition to the definitions provided in A.R.S. § 23-901, the following definitions apply to this Article:
1. "Act" means the Arizona Workers'
Compensation Act, A.R.S. §
23-901 et seq.
2. "Administrator" means an individual or
organization designated by a Self-Insurance Pool Board to manage the daily
operations of a Self-Insurance Pool.
3. "Agreement to Process and Pay" means a
written agreement that requires an entity to process and pay or guaranty the
payment of another entity's liabilities.
4. "Applicant" means an entity or pool
seeking initial or renewal authority to self-insure for workers' compensation,
a Self-Insurance Pool seeking to add a new member, or a Self-Insurer seeking to
Self-Administer.
5. "Authorization
Date" means the date designated by the Commission on which self-insurance
authority begins.
6. "Basic Premium
Factor" means a factor used in the Retrospective Rating Plan formula to
represent expenses of the Self-Insurer, such as acquisition, audit,
administration, and profit or contingencies, but not taxes.
7. "Cash Flow Ratio" means a numerical
relationship that reflects an entity's ability to meet current financial
obligations out of cash flow and is calculated as follows: (cash flow from
operations) divided by (current liabilities).
8. "Claim" or "claim" means a workers'
compensation claim.
9. "Deviation
Rate" means the rate applied to the Manual Premium to calculate a discount from
the Manual Premium.
10. "D-Ratio"
means a factor used in the Ex-Medical Plan that reflects the ratio of primary
expected losses and total expected losses.
11. "Division" means the self-insurance
office of the Commission.
12.
"Ex-Medical Plan" means a method of determining the premium upon which taxes
are calculated that provides for rate revisions based upon the Self-Insurer
operating a medical facility with a program for providing medical, surgical, or
hospital services to a majority of the Self-Insurer's employees that complies
with the requirements of A.R.S. §
23-1070.
13. "Experience Modification Rate" means a
ratio comparing actual losses to expected losses based on a formula determined
by an approved Rating Organization or the Commission.
14. "Fiscal Year" or "fiscal year" means a
12-month financial or accounting period.
15. "Fixed Premium Plan" means a method of
determining the premium upon which taxes are calculated in which neither losses
nor incurred loss reserves are used for the net taxable premium
calculation.
16. "Guaranteed Cost
Plan" means a method of determining the premium upon which taxes are calculated
that provides for a direct relationship, on an annual basis, of the premium for
tax purposes and the Experience Modification Rate developed to reflect the loss
payment and incurred loss experience of the Self-Insurer.
17. "Local Government Investment Pool" means
a pooled investment fund operated by the Arizona State Treasurer according to
A.R.S. §
35-326.
18. "Loss
Conversion Factor" means a factor used in the Retrospective Rating Plan formula
that is used to cover unallocated claims and the costs of the Self-Insurer's
claims services.
19. "Manual
Premium" means the aggregate payroll by individual Payroll Classification Code
multiplied by the Payroll Classification Rate.
20. "Member" or "member" means an employer
described in A.R.S. §§
11-952.01, 15-382 23-961.01, or 41-621.01 that
has joined with other employers to operate a Self-Insurance Pool.
21. "Parent Company" means a company that has
sufficient ownership in another entity (the Subsidiary) to have control,
directly or indirectly, of the Subsidiary.
22. "Payroll" or "payroll" means the total
wages and salaries paid by an employer.
23. "Payroll Classification Code" means a
four-digit numerical code assigned by a Rating Organization or the Commission
to differentiate between the various job duties or scope of work performed by
employees.
24. "Payroll
Classification Rate" means a rate assigned to an individual Payroll
Classification Code by a Rating Organization or the Commission.
25. "Public Entity" means an individual
employer that is a state, county, municipality, school district, or any other
entity with taxing authority.
26.
"Public Entity Pool" means a workers' compensation pool organized under A.R.S.
§§
11-952.01, 15-382, or 41-621.01.
27. "Public Entity Trust Fund" means an
internal service fund or sub-fund dedicated to workers' compensation or risk
management established by a Public Entity from which money is used to pay
workers' compensation claim liabilities and expenses.
28. "Rating Organization" means an entity
that meets the requirements of A.R.S. §
20-363 and is approved by the
Department of Insurance and Financial Institutions to establish rates, codes,
and formulas used to calculate workers' compensation premiums.
29. "Renewal Date" means the date designated
by the Commission by which a renewal application shall be filed with the
Division.
30. "Reserves" or
"reserves" means an amount of money that is set aside to satisfy the financial
and legal obligations associated with a workers' compensation claim or group of
claims.
31. "Resolution of
Authorization" means a document issued by the Commission that grants authority
to self-insure for purposes of workers' compensation.
32. "Retrospective Rating Plan" means a
method of determining the premium upon which taxes are calculated that provides
for a relationship between the premiums for tax purposes, the Experience
Modification Rate developed to reflect the loss payment and incurred loss
experience of the Self-Insurer, and the actual incurred losses for the tax
year.
33. "Security" or "security"
means any financial instrument authorized by R20-5-1521 through R20-5-1524, or
appropriate documents renewing, amending, or continuing any of these.
34. "Self-Administer" means the process under
which a Self-Insurer administers its own claims, once approved by the
Division.
35. "Self-Insurance Pool"
means a Public Entity Pool or Similar Industry Pool.
36. "Self-Insurance Pool Board" means a body
of individuals that directs a Self-Insurance Pool according to
R20-5-1527.
37. "Self-Insurer"
means an entity authorized by the Commission to self-insure for workers'
compensation and may include a Public Entity, an individual private employer
under A.R.S. §
23-961(A)(2), a Public Entity Pool, or a Similar Industry
Pool.
38. "Similar Industry Pool"
means a pool with members in similar industries as authorized by A.R.S. §
23-961.01.
39. "Subsidiary" means
an entity of which a Parent Company has sufficient ownership to have control,
directly or indirectly.
40.
"Third-Party Administrator" means an organization that processes workers'
compensation claims for a Self-Insurer.
41. "Workers' Compensation Pool Loss Account"
means an account or sub-account in the Workers' Compensation Pool Operations
Account established by a Self-Insurance Pool from which money is used to pay
workers' compensation claims, liabilities, and expenses.
42. "Workers' Compensation Pool Operations
Account" means an account or sub-account into which premiums, investment
proceeds, and other revenues are deposited for purposes of a Self-Insurance
Pool.
Notes
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