N.J. Admin. Code § 11:2-33.3 - Exemption from insuring compensation liability; filing requirements

(a) Any employer which applies for an exemption from insuring all or part of its compensation liability shall submit the following to the Commissioner:

1. A copy of its most recent annual financial statement certified by an independent certified public accountant to present fairly, in accordance with generally accepted accounting principles, and statutory accounting principles where applicable, the financial condition of the applicant;

2. A copy of its Form 10K filing;

3. A brief description of the following, inclusive of all operations in New Jersey, for every separate applicant seeking an exemption:

i. The nature and location of the applicant's business operations;

ii. The applicant's number of employees; and

iii. The estimated average annual payroll; and

4. For corporate applicants domiciled in a state other than this State, a copy of the applicant's registration with the New Jersey Secretary of State.

(b) Upon the Commissioner's review and acceptance of the information submitted pursuant to (a) above, the applicant shall submit the following information to the Commissioner:

1. A completed application form in the format of Exhibit A in the Appendix incorporated herein by reference;

2. Evidence that excess insurance will be obtained in a form and amount acceptable to the Commissioner including the amount of liability that the applicant intends to retain;

3. A loss history on open and closed claims for the applicant's workers' compensation and employers' liability for the three years immediately preceding the date of the application; and

4. The application filing fee as set forth in N.J.A.C. 11:1-32.4(b)13.

(c) If the applicant is a corporation, the applicant may request that the Commissioner include the name of any subsidiary corporation under the control of that corporation in the certificate conditioned upon the applicant's compliance with the requirements of (a) and (b) above for each subsidiary corporation.

1. The Commissioner shall not include the name of any subsidiary in the certificate unless the ultimate parent corporation guarantees that it will discharge the subsidiary's liability as evidenced by filing an indemnity agreement in the format of Exhibit B in the Appendix incorporated herein by reference, or in such other form which is acceptable to the Commissioner. The applicant shall also file a certification of the resolution of the board of directors, in the format of Exhibit C in the Appendix incorporated herein by reference, or in such other form which is acceptable to the Commissioner.

2. If the name of the subsidiary is included in the certificate of the ultimate parent corporation and ownership of the ultimate parent or subsidiary corporation changes, the ultimate parent or subsidiary shall reapply for the certificate within 30 days of the ownership change. The Commissioner may revoke the existing certificate if the ultimate parent or subsidiary fails to reapply for the certificate as set forth above.

(d) An applicant with a substantial number of subsidiaries in New Jersey may request permission to file a consolidated application on behalf of itself and its subsidiaries which shall be in a form acceptable to the Commissioner. The applicant shall demonstrate that the relationship between the parent company and the subsidiaries is clearly evident to covered employees.

1. Upon granting any such request, the Commissioner shall require such information as he or she deems necessary to ensure that the applicant and its subsidiary corporations will satisfy the requirements for the issuance of a certificate pursuant to N.J.S.A. 34:15-77 and this subchapter, including, but not limited to, a listing of all subsidiary corporations to be included in the certificate(s).

2. If the application is approved pursuant to this subsection, the certificate holder shall notify the Commissioner of any additions or deletions to the list of subsidiaries covered under the certificate(s) within 15 days of such change. Coverage for a subsidiary under the parent corporation's certificate(s) shall not terminate until notice has been filed with the Commissioner.

3. The Commissioner may subsequently require an applicant or certificate holder permitted to file consolidated information pursuant to this subsection to file information for each subsidiary corporation based upon any changes in the relationship between the parent and its subsidiaries occurring after permission was granted.

(e) If the applicant is a subsidiary, and the subsidiary's ultimate parent does not apply for a certificate, the subsidiary shall obtain a guarantee from the ultimate parent that it will discharge the subsidiary's liability as evidenced by the filing of an indemnity agreement and certification of the resolution of the board of directors as set forth in (c) above.

(f) In addition to the filing fee set forth in (b)4 above, the applicant shall be assessed and shall pay upon demand the amount necessary to reimburse the Department for expenses incurred in obtaining a risk assessment report on the applicant from a rating agency as determined by the Commissioner.

(g) If an application is approved, the applicant shall submit a surety bond in a form and amount determined by the Commissioner, with a minimum penal sum of $ 500,000 and an executed contract of excess insurance in an amount acceptable to the Commissioner. Upon receipt of the required surety bond and executed contract of excess insurance, the Commissioner shall issue a "Certificate of Order Granting Exemption from Insuring Liability for Compensation" to the applicant.

(h) All certificates shall be valid from the date of issuance until June 30 immediately following and may be renewed thereafter, pursuant to N.J.A.C. 11:2-33.4, for a one-year period beginning July 1 and ending June 30 the following year.

(i) Information or notifications required by this subchapter or other information reasonably deemed necessary by the Commissioner or otherwise required by law shall be sent to:

New Jersey Department of Banking and Insurance

Office of Financial Examinations

Attention: Workers' Compensation Self Insurance

20 West State Street

PO Box 325

Trenton, New Jersey 08625-0325

Notes

N.J. Admin. Code § 11:2-33.3

Amended by R.2001 d.6, effective 1/2/2001.
See: 32 New Jersey Register 3530(a), 33 New Jersey Register 85(a).