Chapter DWD 80

DWD 80.60(3)(c) (c) Self-insurance granted under par. (a) is subject to revocation under s. 102.28 (2) (c), Stats. Once the privilege of self-insurance is revoked, further self-insurance may be authorized only under the procedures set forth in sub. (4).

DWD 80.60(4) (4) Requirements for other employers.

DWD 80.60(4)(a) (a) Employers other than those specified in sub. (3), but including those specified in sub. (3) (c), desiring self-insurance shall submit an application on a form available from the department. A non-refundable fee, determined by the department as described in par. (ag), per employer, shall accompany the initial application. If the application is approved, the department shall permit self-insurance by written order. Every 3 years, a self-insured employer shall submit an application to renew self-insurance at least 60 days before the expiration date specified in the department’s order. Each quarter, or more often if requested by the department, a self-insured employer shall submit the most current financial statements to the department. Each year, a self-insured employer shall report work-injury claims payments to the department and other information related to worker’s compensation liability requested by the department. A self-insured employer shall immediately report to the department in writing any change in organizational structure that differs from the information provided in the annual report submitted to the department, including mergers, acquisitions, company name changes, consolidation, sale, or divestiture of divisions or subsidiaries. After a change in organizational structure, the department may revoke or modify the exemption from the duty to insure by providing reasonable written notice to the self-insured employer. If these changes result in the creation of a new parent or subsidiary, the department may waive or modify the requirement in par. (b) 1. to submit 5 years of audited financial statements. A fee of $200, per employer, and the assessment surcharge described in par. (am) may be billed by the department at the same time as the annual assessment under s. 102.75 (1), Stats. Self-insurance shall expire on the day specified by the department in its order. Unless the context indicates otherwise, all information submitted to the department to comply with this section shall be submitted on the latest version of a department approved form.

DWD 80.60 Note Note: For information regarding forms contact the worker’s compensation division, bureau of insurance programs, 201 East Washington Avenue, P.O. Box 7901, Madison, Wisconsin 53707.

DWD 80.60(4)(ag) (ag) In addition to any fee-for-service costs under par. (ax), the department shall charge each initial applicant for self-insurance a flat fee which the department estimates is the average cost for department employees to review the application for self-insurance, including employee salary and fringe benefits, supplies services and administrative costs, and information technology charges. The department shall review and, if necessary, modify the fee at least every 2 years.

DWD 80.60(4)(am) (am) In addition to any fee-for-service costs under par. (ax), each year the department shall assess each self-insured employer except those specified in sub. (3), but including those specified in sub. (3) (c), a $200 fee and a proportionate share of the department’s remaining costs to administer the self-insurance program after deducting the total amount estimated to be collected from the $200 fees and the fees charged under par. (ag) for initial applications. The department shall determine the assessment amount under this paragraph in the same manner as costs and expenses are apportioned in s. 102.75 (1), Stats.

DWD 80.60(4)(ax) (ax) To assist the department in evaluating an initial application or a renewal application for self-insurance, the department may contract for financial, loss control or other fee-for-service expertise or it may direct the applicant to provide the necessary information. The department shall charge the applicant for self-insurance the full cost of any fee-for-service expenses which the department incurs in evaluating the application for self-insurance. If these charges are related to an application for renewal of self-insurance, the department may bill the employer at the same time as the annual assessment under s. 102.75 (1), Stats.

DWD 80.60(4)(b) (b) The minimum requirements necessary for initial consideration for self-insurance are set forth in this paragraph. References in this paragraph to “board of directors” and “stockholders of the corporation” apply only to corporations but an equivalent requirement as determined by the department shall be applied to sole proprietorships, partnerships and other forms of business ownership.

DWD 80.60(4)(b)1. 1. The applicant, when submitting an initial request for self-insurance, shall submit audited financial statements (which includes the opinion of a certified public accountant) for a minimum of the latest five. Except as authorized by the department, employers self-insured under this subsection shall submit to the department audited or unaudited financial statements each quarter and audited financial statements each year.

DWD 80.60(4)(b)2. 2. If the employer is a corporation or a partnership which is a majority or wholly owned subsidiary, it shall submit to the department a guaranty of payments by the ultimate or top parent company on a department form and a certified copy of the resolution adopted by the board of directors of the parent corporation.

DWD 80.60(4)(b)3. 3. If the employer is a corporation, it shall submit a certified copy of the resolution adopted by the board of directors authorizing the execution of the initial application:

DWD 80.60(4)(b)3.a. a. Applications by organizations other than corporations shall be signed by one or more persons possessing authority to execute such application.

DWD 80.60(4)(b)3.b. b. Partnerships must submit a consent by all the partners that all individuals executing the application have the authority to act for the applicant partnership.

DWD 80.60(4)(b)4. 4. Corporations, limited partnerships and limited liability companies shall be registered in the office of the department of financial institutions.

DWD 80.60(4)(b)5. 5. The employer shall submit a copy of its current safety and loss control plan.

DWD 80.60(4)(c) (c) The following criteria may be considered by the department in evaluating the qualifications of an applicant for the initial application or renewal of self-insurance status:

DWD 80.60(4)(c)1. 1. The financial strength and liquidity of the employer to include: profit and loss history; financial and performance ratios; characteristics and trends for the employer or the consolidated group of employers to which the employer belongs; characteristics and trends for other employers of the same or the most similar industry in which the employer or the employer’s consolidated group is involved;

DWD 80.60(4)(c)2. 2. The employer’s organizational structure, management background, kind of business, length of time in business, and any intended or newly implemented reorganization including but not limited to merger, consolidation, acquisition of new business, divesting or spinning off of assets or other changes;

DWD 80.60(4)(c)3. 3. The nature and extent of the employer’s business operations and assets in the state of Wisconsin;

DWD 80.60(4)(c)4. 4. The employer’s bond or other business ratings;

DWD 80.60(4)(c)5. 5. The number of employer’s employees, payroll and hours worked in Wisconsin;

DWD 80.60(4)(c)6. 6. The employer’s performance indicators under ch. 102, Stats., including, but not limited to, promptness or time taken in making first indemnity payments, promptness or time taken in submitting first reports, and injury and illness incidence and severity rates;

DWD 80.60(4)(c)7. 7. The existing or proposed claims administration, occupational health, safety, and loss control programs to be maintained by the employer. The department may require certification of the occupational safety and health program by state or independently qualified specialists;

DWD 80.60(4)(c)8. 8. The worker’s compensation loss history, experience modification factor, reported losses, loss reserves and worker’s compensation premium of the employer; and

DWD 80.60(4)(c)9. 9. Excess insurance, surety bond, cash deposit or pledges of the employer, guaranty by the parent company, or other guarantees or pledges acceptable to the department.

DWD 80.60(4)(d) (d) The required minimum bond, minimum amount of cash, letter of credit or securities deposits, minimum acceptable excess insurance upper limit, maximum excess insurance retention, or other security satisfactory to the department, shall be determined after the application has been reviewed and analyzed by the department. The employer and the employer’s surety or other agent providing security shall use the latest version of any forms required by the department. All surety bonds and excess policies shall be written on standard forms approved by the Wisconsin compensation rating bureau or the commissioner of insurance, or both. Any change in the language used in the approved standard form is not accepted unless the department approves it in writing. The following conditions shall also apply to self-insured employers:

DWD 80.60(4)(d)1. 1. Surety bonds shall be written by companies authorized to transact surety business in Wisconsin and acceptable to the department.

DWD 80.60(4)(d)2. 2. Cash or equivalent securities shall be deposited with banks or trust companies authorized to exercise trust powers in Wisconsin and acceptable to the department. These securities shall be negotiable and converted into cash at anytime by the depository at the request of the department.

DWD 80.60(4)(d)3. 3. If excess insurance is required by the department, it shall be procured from a licensed excess insurance carrier and written on the basis of rates and policy form filed with and approved by the state of Wisconsin commissioner of insurance. The policy for the required excess insurance shall be filed with and approved by the Wisconsin compensation rating bureau.

DWD 80.60(4)(d)4. 4. Each self-insured employer shall provide security of at least $500,000. The department may increase the minimum required security amount after considering the criteria in par. (c).

DWD 80.60(4)(d)5. 5. If the self-insured employer provides a surety bond, the surety company shall pay worker’s compensation liabilities of the employer up to the aggregate amount of the bond without deducting any of its costs for investigating, paying, defending against, or providing other services related to the worker’s compensation claims. If a self-insured employer has more than one surety bond, the surety company whose bond is in effect on the date of injury is liable for claims related to that injury.

DWD 80.60(4)(d)6. 6. If the self-insured employer provides security in any form other than a surety bond, the department shall add 30 percent to the minimum amount in subd. 4.

DWD 80.60(4)(d)7. 7. Each employer self-insured under this subsection shall obtain a specific per occurrence excess insurance policy with retention and maximum limits approved by the department and in a form approved by the Wisconsin compensation rating bureau under ch. 626, Stats. In determining the limits the department shall consider, among other things, the criteria in par. (c).

DWD 80.60(4)(dm) (dm) The department may call and use any security provided by an employer under par. (d) to pay that employer’s worker’s compensation liabilities and to administer that employer’s worker’s compensation claims if the department has a reasonable basis to believe that the employer is not able or will not be able to timely pay the worker’s compensation liabilities incurred during the period for which that employer was authorized to be self-insured. The department may contract with a third-party administrator or other agent to administer payments. The employer is responsible for any unpaid liabilities. Within 2 working days of receiving written notice from the department, the employer whose security was called shall provide the department with the names and addresses of all present and former employees of the employer during the most recent 3 years in which the employer was self-insured. Within 30 days of receiving written notice from the department, the employer whose security was called shall provide the department with copies of any worker’s compensation, medical or employment files requested by the department or summary information related to those files in a format requested by the department.

DWD 80.60 Note Note: In addition to a demonstrated failure to make timely worker’s compensation payments, “a reasonable basis to believe that an employer...will not be able to timely pay worker’s compensation liabilities” is intended to include such things as proceedings before bankruptcy court which may have an adverse financial impact on the employer or credible reports that an employer is preparing to seek some form of shelter in bankruptcy or receivership.

DWD 80.60(4)(dx) (dx) A surety or bonding company shall provide the department with a written plan acceptable to the department for the review and payment of any worker’s compensation liability of the self-insured employer within 15 days after the department notifies the surety or bonding company that it is calling the bond. When the department approves the plan the surety or bonding company may contract with a third-party administrator or other agent to pay worker’s compensation benefits and other liabilities.

DWD 80.60(4)(e) (e) Whenever the department has reason to believe that an employer currently or previously granted self-insurance for its parent or subsidiary company is liquidating and distributing its assets to its owners, or is selling or is about to sell the tangible property it owns and maintains in Wisconsin and the employer or its parent or subsidiary company is moving or is about to move its operations out of Wisconsin, without providing for the payment under the terms of the agreement in the self-insurance application or guaranty form it has executed and submitted to the department, the department may, through the attorney general, cause a petition to be filed to enjoin and restrain the employer from engaging in such action until such time as all obligations of self-insurance meet the satisfaction of the department. Whenever an employer exits self-insurance status the department may require such employer to provide all available information regarding past or outstanding worker’s compensation claims or liability and may require securities sufficient to provide payment for those claims or liabilities.

DWD 80.60(4)(f) (f) The department may require a self-insured employer to update the information provided in pars. (b) to (e) at any time.

DWD 80.60 History History: Cr. Register, September, 1982, No. 321, eff. 10-1-82; am. (3), (4) (a), (b) (intro.) and (c) (intro.), cr. (4) (b) 11., Register, September, 1986, No. 369, eff. 10-1-86; emerg. r. (4) (b) 1., renum. (4) (b) 2. to 11. to be 1. to 10., eff. 3-22-88; am, (4) (b) (intro), r. (4) (b) 1., renum. (4) (b) 2. to 11. to be 1. to 10., Register, August, 1988, No. 392, eff. 9-1-88; am. (1), (2), (3) (b) and (4), Register, April, 1990, No. 412, eff. 5-1-90; am. (4) (a), cr. (4) (ag) to (ax), (f), Register, July, 1996, No. 487, eff. 8-1-96; am. (2), (3) (b), (4) (a), (am), (4) (b) 1. and 4., (4) (d) (intro.), cr. (4) (d) 4. to 7., (dm) and (dx), Register, November, 1998, No. 515, eff. 12-1-98.

DWD 80.61 DWD 80.61 Divided-insurance and partial-insurance requirements under s. 102.31 (1) and (6), for all employers, including contractors working on a wrap-up project.

DWD 80.61(1) (1) Definitions. In this section:

DWD 80.61(1)(a) (a) “Divided-insurance” means consent to the issuance of 2 or more policies, as provided in s. 102.31 (1), Stats.

DWD 80.61(1)(b) (b) “Partial-insurance” means self-insurance of a part of the liability and consent to the issuance of one or more policies on the remainder of the liability, as provided in ss. 102.28 (2) (b) and 102.31 (1), Stats.

DWD 80.61(2) (2) Requirements.

DWD 80.61(2)(a) (a) The requirements for partial-insurance and divided-insurance by 2 or more insurance companies are as follows:

DWD 80.61(2)(a)1. 1. Submission of an application on department forms available from the department. If the application is approved, the department shall permit partial-insurance or divided-insurance by written order. In the application, the employer shall agree to assume full responsibility to immediately make all payments of compensation and medical expense as the department may require, pending a final determination as to liability between the insurance carriers under divided-insurance or between the employer and the insurance carrier under partial-insurance, if a dispute should arise as to which insurance company or whether the employer or insurance company is responsible for a particular injury or illness sustained during the time the written order is in effect.

DWD 80.61(2)(a)2. 2. If the applicant is a political subdivision of the state, it shall submit a certified statement by an officer or the attorney for the political subdivision which cites the legal authority for executing the application and agreement when the initial application is submitted.

DWD 80.61(2)(a)3. 3. If the employer is a corporation, it shall submit a certified copy of the resolution adopted by the board of directors authorizing the execution of the initial application. Applications by organizations other than corporations shall be signed by person(s) possessing authority to execute such application. Partnerships must submit a consent by all the partners that the individual(s) executing the application has the authority to act for the applicant partnership.

DWD 80.61(2)(a)4. 4. Partial-insurance or divided insurance shall not be permitted when the portion of the entity to be insured is unable to obtain coverage under voluntary markets. Otherwise,

DWD 80.61(2)(a)4.a. a. The department shall permit divided-insurance to municipalities which have ownership of nursing homes in order that the nursing homes may be separately insured and develop a separate experience rate.

DWD 80.61(2)(a)4.b. b. Subdivision 4. a. does not apply after December 31, 1992.

DWD 80.61(2)(b) (b) Renewal applications shall be submitted to the department on a department form no later than 3 months prior to the expiration date of the department’s order. Partial-insurance and divided-insurance shall expire on the date specified in the order unless continued in force by further order, as the department deems necessary.

DWD 80.61 Note Note: To obtain a renewal application form, contact the Department of Workforce Development, Worker’s Compensation Division, 201 East Washington Avenue, P.O. Box 7901, Madison, Wisconsin 53707 or call [phone].

DWD 80.61(3) (3) Divided-insurance for designated carrier wrap-up construction projects.

DWD 80.61(3)(a) (a) Definitions. In this subsection:

DWD 80.61(3)(a)1. 1. “Bureau” means the Wisconsin compensation rating bureau.

DWD 80.61(3)(a)2. 2. “Designated wrap-up carrier” means the designated carrier or insurance company which insures the wrap-up project under ch. 102, Stats.

DWD 80.61(3)(a)3. 3. “Job site” means the premises and vicinity upon which the operations covered under the contract with the contractor or subcontractor are to be performed.

DWD 80.61(3)(a)4. 4. “Material supplier” means vendors, suppliers, material dealers, and others whose function is solely to supply or transport material, equipment, or parts to or from the construction site.

DWD 80.61(3)(a)5. 5. “Owner” means the person, firm, corporation or municipality having lawful possession of the construction project.

DWD 80.61(3)(a)6. 6. “Regular carrier” means the insurance company which insures all operations of a contractor or subcontractor under ch. 102, Stats., except for work done on the wrap-up project.

DWD 80.61(3)(a)7. 7. “Subcontractor” means a person who contracts with a contractor and also includes any subcontractor of a subcontractor.

DWD 80.61(3)(a)8. 8. “Wrap-up project” means a construction project wherein the owner selects a carrier, and this carrier issues a separate worker’s compensation policy to each contractor and subcontractor scheduled to work on the project for work which will be done on the project, and where the owner pays for each such policy.

DWD 80.61(3)(b) (b) Minimum wrap-up project requirements. Wrap-up projects shall comply with the following:

DWD 80.61(3)(b)1. 1. The estimated project cost of completion shall be equal to at least $25 million. The estimated project cost of completion shall be the estimate of the costs of the total construction contracts to be awarded by the owner on the wrap-up project.

DWD 80.61(3)(b)2. 2. The estimated standard worker’s compensation manual premium shall be equal to $250,000 or more.

DWD 80.61(3)(b)3. 3. The project shall be confined to a single location except that in connection with the building of a road, bridge, pipeline, tunnel, waterway, or 2 or more concurrent wrap-up projects involving the same owner and the same insurance carrier the entire job or the concurrent projects are considered as a single project location.

DWD 80.61(3)(b)4. 4. The project shall have a definite completion date involving work to be performed continuously until completion and may not be extended to include maintenance work following completion.

DWD 80.61(3)(b)5. 5. All contractors and subcontractors shall be included under the wrap-up program.

DWD 80.61(3)(b)6. 6. All material suppliers shall be included in the safety program on the job site while unloading and handling material and performing other work, but material suppliers shall be excluded from the rest of the wrap-up program.

DWD 80.61(3)(b)7. 7. The submission of all bids and the letting of all contracts shall be on an ex-insurance basis.

DWD 80.61(3)(c) (c) Minimum requirements for owner. The owner shall comply with the following requirements on a wrap-up project:

DWD 80.61(3)(c)1. 1. The wrap-up plan and application shall be submitted on a form provided by the department. If the application is approved, the department shall permit divided-insurance on the wrap-up project.

DWD 80.61 Note Note: To obtain the form under this paragraph, contact the Department of Workforce Development, Worker’s Compensation Division, 201 East Washington Avenue, P.O. Box 7901, Madison, Wisconsin 53707 or call [phone].

DWD 80.61(3)(c)2. 2. The owner shall comply with all conditions and agreements in the application, including, but not limited to:

DWD 80.61(3)(c)2.a. a. The reimbursement of the department’s costs incurred because of the wrap-up project.

DWD 80.61(3)(c)2.b. b. The selection of a licensed and qualified designated wrap-up carrier having a record of compliance with the requirements of ch. 102, Stats., which is acceptable to the department.

DWD 80.61(3)(c)2.c. c. Informing each contractor and subcontractor and each contractor’s and subcontractor’s insurance company either directly or through the bureau, at the bureau’s discretion, of each one’s responsibilities and the need for attaching a proper endorsement to the regular carrier’s policy to exclude coverage for the wrap-up job site.

DWD 80.61(3)(c)2.d. d. The submission of each contractor’s and subcontractor’s application, on a form provided by the department, to the department prior to the time the contractor or subcontractor begins work on the wrap-up project.

DWD 80.61 Note Note: To obtain the form under this paragraph, contact the Department of Workforce Development, Worker’s Compensation Division, 201 East Washington Avenue, P.O. Box 7901, Madison, Wisconsin 53707 or call [phone].

DWD 80.61(3)(c)2.e. e. The notification of department and bureau of any entity status change resulting from ensuing reorganization.

DWD 80.61(3)(c)2.f. f. The assumption of responsibility for immediately making direct compensation payments if a dispute arises over coverage.

DWD 80.61(3)(c)2.g. g. The payment of an employee’s attorney’s fees and lost wages resulting from a dispute.

DWD 80.61(3)(c)3. 3. If the owner is a corporation, it shall submit a certified copy of the resolution by the board of directors authorizing and directing the execution of the application and agreement.

DWD 80.61(3)(c)4. 4. If the owner is a subsidiary of a corporation, it shall submit a guaranty and agreement by the owner’s ultimate or top parent company agreeing to promptly satisfy all of the requirements and obligations assumed by the owner on the wrap-up project in case of default by the owner.

DWD 80.61(3)(d) (d) Minimum requirements for designated wrap-up carrier.

DWD 80.61(3)(d)1. 1. The designated wrap-up carrier shall submit an application on forms available from the department. If the application is approved, the department shall permit divided-insurance for each contractor and subcontractor scheduled to work on the wrap-up project.

DWD 80.61 Note Note: To obtain application forms, contact the Department of Workforce Development, Worker’s Compensation Division, 201 East Washington Avenue, P.O. Box 7901, Madison, Wisconsin 53707 or call [phone].

DWD 80.61(3)(d)2. 2. The designated wrap-up carrier shall comply with all conditions and agreements in the application, including, but not limited to: