EMPLOYER SECURITIZATION REQUIREMENTS
Revised Code (ORC) 4123.35(B)
and 4123.351(E); Ohio
Administrative Code (OAC) 4123-17-15.5,
4123-19-03, and 4123-19-03.1
previous versions of this policy
Policy August 1, 2015
I. Policy Purpose
The Bureau of Workers’ Compensation (BWC) requires
security for any self-insuring employer that presents a default risk based on
This policy applies to self-insuring employers,
self-insured professional employer organizations, and the Self-Insured Department.
An assessment performed by a professional actuary that uses mathematical and
statistical methods to assess risk and determine the probable financial implications
of future events.
A document obtained by an employer from a bank for a predetermined dollar
amount that serves as a guarantee for required payments. For purposes of this
policy, an LOC is security posted by an employer to obtain or maintain its
self-insuring employer status. BWC is the beneficiary on the LOC, and the
amount of the LOC is determined by BWC.
The chart BWC uses to determine security requirements for an employer to obtain
or maintain the privilege of self-insurance. The security requirements
identify the potential risk that the employer may present to the Self-Insuring
employers’ Guaranty Fund (SIEGF) in the event of default.
SI-40: Required annual
report of paid compensation and case reserves.
An employer that BWC has granted the privilege of paying compensation and
Professional Employer Organization (SI-PEO): A professional employer organization
that BWC has granted the privilege to pay workers compensation and benefits
will Evaluate the amount of security required by an SI employer annually as
part of the self-insured renewal process and at any other time BWC determines
may require an SI employer to provide additional security based on a financial
analysis which may include an independent actuarial review.
BWC requires an SI employer to provide additional security, the minimum-security
amount required will be $150,000.00.
LOC’s security amount must be in U.S. dollars. No security in foreign currency
security must be provided in the form of an LOC. The SI Department will not
accept a surety bond.
issuer of the LOC;
be a financial institution with a physical location in the United States of
not be an entity affiliated with the SI employer; and
use the specified language in the LOC as provided by BWC.
PEOs are required to provide security:
security requirements for an SI PEO are evaluated quarterly and may be adjusted
at the time based on the SI PEO’s quarterly claims and client reports.
determines the SI PEO security amount required based on independent actuarial
reviews, which are required, at minimum, every two years.
Professional Employer Organization Client and Claims Reporting Requirements
Policy for additional requirements regarding SI PEOs.
another or parent corporation or entity owns fifty percent or more of the stock
of an SI employer, or employer applicant for self-insurance, BWC requires the
employer to furnish a contract of guaranty executed by the ultimate domestic
parent corporation or entity. SI employers that do not provide this parental guaranty,
which is through a properly submitted Contract of Guaranty SI-38, shall
provide additional security.
additional security must be provided in the form of an LOC as provided in
Section IV.A.3 through Section IV.A.6 above.
security amount required will be a minimum of 200% of the case reserves as
self-reported by the employer on the SI-40.
V. Resolution of
complaints or disputes related to this policy must be submitted in writing to
the SI Department, via mail or email, as detailed in the Self-Insured
Employer Dispute/Protest Policy.
Ohio Bureau of Workers’
30 W. Sprint St., 22nd
Columbus, Ohio 43215-2256
SI employer may file a written appeal of the SI Department’s decision to the
Self-Insured Review Panel (SIRP).