Current through Register Vol. 54, No. 45, November 9, 2024
Section 223.4 - Approval requirements(a) No person shall be approved as a self-insurer unless it posts certain minimum collateral with the Department to meet the duties of a self-insurer under the act. This subsection may not apply to government agencies or authorities.(b) The minimum required security that must be furnished to the Department is, for one secured vehicle, $50,000, and for each additional vehicle, $10,000, up to a maximum of $1,000,000.(c) Only the following shall be accepted as valid collateral for self-insurance purposes: (1) United-States currency, including United States Treasury bills, United States Treasury notes or other negotiable obligations of the United States Government. United States Savings Bonds are not negotiable.(2) Evidence of escrow deposits in Federal or State banks, credit unions, or savings and loan associations if federally insured. Escrow deposits shall be established for the sole purpose of providing security to meet the duties of a self-insurer.(3) Irrevocable letters of credit issued by a bank in this Commonwealth or another bank as approved by the Department.(4) Surety bonds issued by insurers authorized or eligible to do business in this Commonwealth.(5) Bonds or other negotiable obligations issued by a state, subdivision or instrumentality of a state in the United States, if not in default as to principal or interest.(6) Corporate bonds, issued by an entity other than the proposed self-insurer, rated A or better by Moody's Bond Record, Moody's Investors Service, Inc.(7) Other security approved upon petition to the Department.(d) The Department will hold the collateral furnished for the benefit of the persons to whom the self-insurer is obligated.(1) The self-insurer shall pay for all obligations incurred under the act by assets readily reduced to liquid assets, such as demand deposits, time deposits, negotiable instruments and other assets which may be readily reduced to liquid form.(2) If the self-insurer is not able to discharge its obligations, the self-insurer may petition the Department to release the collateral posted as is necessary to satisfy the obligations of the self-insurer.(3) If withdrawals from collateral are required, the self-insurer must replace the security within 72 hours from the date of withdrawal, in order to retain its certificate as a self-insurer.(e) Each self-insurer shall annually furnish to the Department a report of all claims incurred during the preceding calendar year. The report shall be included on the Renewal Application for Self-Insurance.(f) If, based on the number of claims incurred by the self-insurer, the Department determines the collateral furnished is inadequate, it may require additional security and more frequent report of claims incurred.