Accounting Workers’ Compensation Liability Form Instructions

General Instructions:

  1. Attach per claim data to support the current authorization year and prior years summary information entered in columns “A,” “B,” and “C.”  
  2. For current year’s claims, a cut-off date may be used, but should be within 60 days of your anniversary date.  Only those claims actually open on the cut-off date should be shown.
  3. Form must be signed by either the Chief Financial Officer or Chief Executive Officer (R20-5-1103(B) (4)).
  4. Return this form with attach claim summary by your anniversary date.
  5. Remember, the required security deposit must be received by the Industrial Commission by your anniversary date.

After all renewal requirements have been met, you will be notified of your authorization to continue to self-insure workers’ compensation liabilities in Arizona.

Specific Instructions:

  1. Enter the self-insured company’s formal name.
  2. Employee Count
  3. Column A – Total Amount of Open Claims:  All open cases for the years of self-insurance authorization for both medical and compensation (lifetime liability).  See item #12 for further detail.
  4. Column B - Incurred Medical:  Total amount incurred for all open claims for each period indicated (see item #12 for further detail).
  5. Column C - Paid Medical:  Total amount paid on the reported open claims, through the latest reporting period, for period of self-insurance authority (see item #12 for further detail).
  6. Column D – Total Medical Owed:  Unpaid medical liability calculated by subtracting Column C from Column B.
  7. Column E – Incurred Compensation:  Total amount incurred for all open cases for the years of self-insurance authority.
  8. Column F – Paid Compensation:  Total amount paid on the reported open claims, through the latest reporting period, for the period of self-insurance authority.
  9. Column G – Total Compensation Owed:  Total of unpaid compensation calculated by subtracting column F from column E.
  10. Column H – Total All Claims: Add Columns D and G. (Total Medical Owed + Total Comp. Owed)
  11. Enter the total from Column H onto the “Total Owed” line.
  12. For information provided in columns A, B and C, supporting documentation on a per claim basis is required. This documentation should include, at a minimum, the following information:  name of claimant; claim number; date of injury; amount of total liability (DO NOT reduce the total liability by the amount of excess insurance to be received); amount paid on the claim; and amount owed on the claim.  Totals on the support documentation must equal the totals reported on the Workers Compensation Liability Form.
  13. Excess insurance ceded:  If a credit for excess insurance is taken to offset the amount of the “Total Owed” calculation, enter the total amount of excess reimbursement (statutory limits apply) at the time the Workers Compensation Liability form is completed.  This is the amount of remaining reserve that is over the self-insurance retention amount listed on the policy. In addition, if a credit for “Excess insurance ceded” is taken, then please provide proof of insurance for the years that the credit is taken (R20-5-1108(A)(5)).  Credits cannot be taken for Expenses, Legal and Administrative fees (ALAE or ULAE), because the reserves for ALAE and ULAE are not included in the statutory deposit calculation.  A credit for excess insurance cannot be taken if the self-insured company has an affiliate relationship with the self-insured (R20-5-1109(D)(5)).
  14. To support the amount of credit taken, the following information must be submitted:  the name of the claimant, date of injury, amount of credit taken which should equal the amount to be reimbursed by the excess insurance carrier, name of the insurance carrier(s), the policy years that the credit is being taken for and proof that the claim is reimbursable. This proof can be in the form of the notification sent to the carrier, a check stub, a receipt log, a request for reimbursement and an email request for reimbursement.   
  15. Net remaining liability:  Difference between “Excess insurance ceded” and “Total Owed.”
  16. Multiply the “Net Remaining Liability” by 125% to ascertain the minimum required security deposit.
  17. Enter your security deposit amount, which cannot be less than $100,000.00 for authorized individual self-insured employer and $200,000 for authorized self-insured pools.