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Security Branch





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Security Branch
The Security Branch audits the individual self-insured employers’ claim files, monitors their financial strength and determines the surety requirements necessary to secure benefits for the self-insured employers’ workforce.

To request copies of Self-Insurance files or information, please use the form(s) below.
Requirements for Becoming Self-Insured
The Security Branch, Division of Security and Compliance, often receives inquiries from employers about the requirements for becoming individually self-insured. This web page has been created to disseminate that information more conveniently.

The applicant or guarantor must have assets in excess of all liabilities of at least $10 million. If this initial requirement is met, the employer may obtain a Self-Insurance Package. This package includes an application (Form SI-02).

Two months prior to the planned date for self-insured status, the employer must submit the completed Form SI-02 along with certified, audited financial statements for the prior three years of operation. DWC will then review the application and statements and will inform the employer of initial approval or denial.

If the application and statements are initially approved, the employer must submit loss data for the past five years. The employer will then be informed of the security requirement.

The employer must submit the following information as applicable:
  • Security: Prior to being certified as a self-insured employer and continuing thereafter, primary security adequate to secure the employer's workers' compensation liabilities shall be posted pursuant to the provisions found in KRS 342.340 and 803 KAR 25:021 Section 5. The initial security amount will be based upon the average of indemnity and medical losses during the three highest years of the preceding five years, or a minimum of $500,000.
  • Guarantee Agreement: A parent company must submit a Guarantee Agreement for all subsidiaries that it intends to include under its self-insured program, including the names and addresses of each subsidiary and location. A subsidiary that has separate financial statements may qualify on its own to be self-insured.
  • Resolution of Board: A corporation must submit its board of directors' resolution, authorizing and directing the corporation to undertake to become self-insured.
  • Coverage limit: Specific excess insurance must have a minimum coverage limit of $10 million per occurrence.
  • T.P.A. Service Agreements: If a service organization is used, a statement from the service organization and self-insured employer stating that the contract between the two parties meets the requirements pertaining to claims adjustment.
Starting in 2006, the individual self-insurance certificates will remain in effect until revoked or modified by the Commissioner of the DWC. In the past, certificates were issued annually.

Reporting Requirements for Individual Self-Insurers
The files listed below will assist in meeting the reporting requirements for the 2016 simulated premium calculation and the 2016 security review.
Guaranty Funds
House Bill 1 (December 1996) established three nonprofit, unincorporated guaranty associations to protect disabled workers and dependents in the event of a self-insured's insolvency. Separate guaranty funds now exist for individual self-insureds, group self-insureds, and coal employer self-insureds. Membership in a guaranty fund is mandatory. These funds are listed below.
P.O. Box 910623
Lexington, KY 40591-0623

5932 Timber Ridge Drive
Suite 101
Prospect, KY 40059
Phone: 502-223-5322
Fax: 502-223-4937
Chairperson: Al Cates
Secretary: Tom Underwood
Board Roster
Board By Laws

Groups are now regulated by the Department of Insurance please call 502-564-3630 for more information.

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Contact Info

Department of Workers' Claims
657 Chamberlin Avenue
Frankfort KY  40601
Phone: (502) 564-5550

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Approval Status Approved
Content Type: Article Page
Version: 31.0
Created at 3/9/2011 10:50 AM by System Account
Last modified at 6/20/2016 8:47 AM by System Account