Terminating/Rescinding Self-Insurance

Self-insurance is discontinued in two ways.  First, the employer can terminate his self-insurance and secondly the department can rescind self-insurance. The methods for termination and rescission are different. Just because an employer leaves the self-insurance program does not relieve them of the responsible for the payment of claims that occurred during their period of self-insurance and administrative assessment payments.

Employer Termination

An employer may terminate its exemption from the duty to insure by writing a letter to the Division that includes:

1) the reason for termination,
2) the date and time exemption is to be terminated,
3) the name of the carrier, policy number and effective date of any full coverage insurer assuming the risk after self-insurance termination, and
4) full identification of the purchaser of any self-insured operations sold, including the date and time the sale is effective.

Former self-insurers are responsible for any and all worker's compensation liability incurred during the period when the employer was self-insured. Administrative assessment payments are required of former self-insurers based upon any cases incurred during the entire period of self-insurance until the Department closes all cases.

Department Rescission

The Department holds the right not to renew an exemption from the duty to insure beyond the expiration date stated on the Order.

Also, after giving a self-insured employer ten days' notice in writing, the Department may hold a hearing on revocation of an exemption from the duty to insure. The Department may revoke an exemption from the duty to insure for financial reasons, for failure of the employer to fulfill its obligations according to the agreement and stipulations included in the application, and for failure of the employer to observe Wisconsin law and rules of the Department. If an exemption from the duty to insure is revoked, the employer must immediately fully insure its risk with a worker's compensation insurance carrier or be subject to fines and the possibility of having its Wisconsin operations enjoined to cease.

When the Department rescinds or does not renew an employer's exemption from the duty to insure, the Department will give the employer a 60 day written notice, requiring the employer to obtain a worker compensation insurance policy. The decision to rescind or not-renew is at the sole discretion of the Department. This decision is final.

Whether the exemption from the duty to insure is terminated or rescinded, the Department may require from the employer 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.

 

 

 

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