Application requirements for certificate of authority.

All applications for a certificate of authority for a commercial self-insurance fund shall be on a form adopted by the commission and furnished by the office and shall include or have attached the following:

(1) The name of the fund and the location of the fund’s principal office, which shall be maintained within this state.

(2) The kinds of insurance initially proposed to be transacted and a copy of each policy, endorsement, and application form it initially proposes to issue or use.

(3) A copy of the constitution, bylaws, or trust agreement which governs the operation of the fund. The constitution, bylaws, or trust agreement shall contain a provision prohibiting any distribution of surplus funds or profit except to members of the fund, as approved by the office pursuant to s. 624.473.

(4) The names and addresses of the trustees of the fund. The office shall not grant or continue approval as to any fund if the office determines any trustee to be incompetent or untrustworthy; that any trustee has been found guilty of, or has pled guilty or no contest to, a felony, a crime involving moral turpitude, or a crime punishable by imprisonment of 1 year or more under the law of any state, territory, or country, whether or not a judgment or conviction has been entered; or that any trustee has had any type of insurance license revoked in this or any other state.

(5) A copy of a properly executed indemnity agreement binding each fund member to individual, several, and proportionate liability as set forth in ss. 624.472 and 624.474.

(6) A plan of risk management which has established measures and procedures to minimize both the frequency and severity of losses.

(7) Proof of competent and trustworthy persons to administer or service the fund in the areas of claims adjusting, underwriting, risk management, and loss control.

(8) Membership applications and the name and address of each member applying for coverage and a current financial statement on each member applying for coverage showing the aggregate net worth of all members to be not less than $500,000, a combined ratio of current assets to current liabilities of more than 1 to 1, and a combined working capital of an amount establishing financial strength and liquidity of the businesses to promptly provide for payment of the normal property or casualty claims proposed to be self-insured.

(9)(a) An initial deposit of cash or securities of the type eligible for deposit by insurers under s. 625.52 in the amount of $100,000.

1. All income from deposits shall belong to the fund and shall be transmitted to the fund as it becomes available.

2. No judgment creditor or other claimant of the fund shall have the right to levy upon any of the assets or securities held as a deposit under this section.

(b) In lieu of the deposit of cash or securities, a fund may file with the office a surety bond in like amount. The bond shall be one issued by an authorized surety insurer, shall be for the same purpose as the deposit in lieu of which it is filed, and shall be subject to the office’s approval.

1. No bond shall be approved unless it covers liabilities arising from all policies and contracts issued and entered into during the time the bond is in effect and unless the office is satisfied that the bond provides the same degree of security as would be provided by a deposit of securities.

2. No bond shall be canceled or subject to cancellation unless at least 60 days’ advance notice thereof in writing is filed with the office.

(c) Deposits of securities or cash pursuant to this section shall be administered by the office and department in accordance with part III of chapter 625.

(10)(a) Copies of acceptable excess insurance policies written by an insurer or insurers authorized or approved to transact insurance in this state, which excess insurance provides specific and aggregate limits and retention levels satisfactory to the office in accordance with sound actuarial principles. The office may waive this requirement if the fund demonstrates to the satisfaction of the office that its operation is and will be actuarially sound without obtaining excess insurance.

(b) At least 10 days prior to the proposed effective date of the issuance of any policy, the trustees shall submit proof that the members have paid into a common claims fund in a designated depository cash premiums in an amount of not less than $50,000 or 10 percent of the estimated annual premium of the members at the inception, whichever is greater.

(11) A copy of a fidelity bond or insurance policy from an authorized insurer providing coverage in an amount equal to not less than 10 percent of the funds handled annually and issued in the name of the fund covering its trustees, employees, administrator, or other individuals managing or handling the funds or assets of the fund. In no case may such bond or policy be less than $1,000 or more than $500,000, except that the office may for good cause prescribe an amount in excess of $500,000, subject to the 10-percent limitation of the preceding sentence.

(12)(a) A plan of operation designed to provide sufficient revenues to pay current and future liabilities, as determined in accordance with sound actuarial principles.

(b) A statement prepared by an actuary who is a member of the American Academy of Actuaries or the Casualty Actuarial Society establishing that the fund has prepared a plan of operation which is based on sound actuarial principles. The office shall not approve the fund unless the office determines that the plan established by the fund is designed to provide sufficient revenues to pay current and future liabilities, as determined in accordance with sound actuarial principles.

(13) Such additional information as the commission or office reasonably requires.