N.J. Admin. Code § 11:6-2.15 - Financial requirements for WCMCO

(a) In order to obtain initial approval, the WCMCO shall meet the following financial requirements:

1. A WCMCO applicant shall submit for approval an audited financial report for itself and all subcontracted entities for the year immediately preceding the application, completed on a generally accepted accounting principles (GAAP) basis, certified by an independent certified public accountant in accordance with N.J.A.C. 11:2-26.

2. If the financial affairs of the WCMCO'S parent company are audited on either a GAAP or statutory basis by an independent certified public accountant, but those of the WCMCO are not, then a copy of the audited financial statements of the parent company for the year immediately preceding the application may be submitted in lieu of the WCMCO filing audited financial statements.

3. The applicant shall submit for approval the following information with the audited financial report:

i. Disclosure of the source of all initial funding;

ii. Quarterly financial projections for the first three years of operations, which shall include a projected balance sheet, statement of revenue and expense, and statement of cash flows; and

iii. A description of the assumptions used in the financial projections which explain every major line item specifically and reasonably.

(b) The Commissioner may, upon reasonable notice, conduct a financial examination of a WCMCO as often as necessary in order to protect the interests of the residents of this state. The reasonable expenses of the examination shall be borne by the WCMCO being examined.

(c) For the purpose of conducting a financial examination of the WCMCO, the Commissioner may retain and employ such persons to conduct, or to assist in conducting the examination, as necessary.

(d) The WCMCO shall submit no later than June 1 of each year, audited annual financial reports for the immediately preceding calendar year on a GAAP basis certified by an independent certified public accountant in accordance with N.J.A.C. 11:2-26.

(e) If the financial affairs of the WCMCO'S parent company are audited on either a GAAP or statutory basis, by an independent certified public accountant, but those of the WCMCO are not, then a copy of the audited financial statements of the parent company for the immediately preceding year can be submitted in lieu of the WCMCO filing its audited financial statements.

(f) A copy of the audited annual reports shall be submitted to the following address:

Office of Solvency Regulation

New Jersey Department of Banking and Insurance

20 West State Street

PO Box 325

Trenton, New Jersey 08625-0325

domesticannual@dobi.nj.gov

Notes

N.J. Admin. Code § 11:6-2.15

New Rule, R.2004 d.41, effective 1/20/2004.
See: 35 N.J.R. 3541(a), 36 N.J.R. 520(a).
Amended by R.2009 d.191, effective 6/15/2009.
See: 40 N.J.R. 5950(a), 41 N.J.R. 2490(a).
In the introductory paragraph of (f), substituted "A copy" for "Two copies". Amended by 55 N.J.R. 2267(b), effective 11/6/2023