An employer who wishes to self-insure for workers' compensation can become an individual self-insurer. Political subdivisions must also provide workers' compensation coverage to their employees, and they may elect to self-insure those benefits.

Individual Employers Self-Insurance - Workers' Compensation

Eligibility

An employer who wishes to self-insure on an individual basis for workers' compensation benefit must meet the following criteria to apply:

• Three years in business in a legally authorized business form (e.g., corporation, partnership, proprietorship, non-profit);
• Proof of current worker's compensation coverage;
• No outstanding procedural or compliance penalties;
• A Moody's rating of A3, S&P rating of A- or greater at time of application. If a published rating is not available, an equivalent rating using credit risk assessment tools such as Moody's RiskCalc may be used;
• Tangible net worth must exceed seven times the greater of three-year average gross claims payments or annual premium paid;
• Three years of certified, independently audited financial statements with auditor's opinion absent of negative qualifications; and
• Safety program maintained by the employer for the prevention of accidents.

Application Process

To apply, submit the following electronically:

• SI-1 Application for Self-Insurance - Workers' Compensation Law for each entity applying, regardless of affiliation;
• All documents noted above proving eligibility.

The Office of Self-Insurance will notify an applicant of approval when conditional approval is granted and then applicant must submit the following:

• Signed and notarized SI-3 Agreement and Undertaking of Employer to Pay Compensation as a self-insured;
• SI-21 Certificate of Excess Insurance Contract for Self-Insurers ;
• Security deposit in a form prescribed by the Chair; and
• Other documentation as necessary.

The initial amount of the security deposit will be based upon the information provided in the application, as well as rates developed by the Compensation Insurance Rating Board (CIRB).

The minimum-security deposit effective July 1, 2020 is $1,508,000.

Annual Reporting

While actively self-insured, each employer must submit the following annually:

• Certified, independently audited financial statements 90 days after fiscal year end;
• SI-6 Self-Insurers Report of Payroll for All Operations due by April 1st;
• Actuarial report due by April 1st, prepared in accordance with guidance promulgated by the Board; and
• SI-21 Certificate of Excess Insurance Contract for Self-Insurer prior to the expiration of the current policy.

Failure to meet any of the reporting or security deposit requirements may result in termination of the employer's status as a self-insurer.

A self-insurer who has discontinued business in New York State, or has arranged for the payment of compensation by alternate methods (State Insurance Fund or carrier coverage), may terminate their status as a self-insurer at any time. The Board will maintain a security deposit for the inactive self-insured employer until all claims have been finally adjudicated and fully paid, all expenses and assessments have been paid, and until such time as the Board determines there is no future liability.