The employer must submit audited financial statements using the
Generally Accepted Accounting Principles (GAAP) to satisfy the following requirements:
(1) The employer must satisfy financial standards demonstrating strength and
stability. In reviewing the financial requirements of the employer, the bureau
shall consider, but is not limited to, the following criteria, as applicable:
(a) The employer's trend of operating profit for a minimum of three years.
(b) The employer's trend of net income for a minimum of five years.
(c) The employer's consistent return on equity, of ten per cent or better.
(d) Significant asset size of the employer in the state of Ohio.
(e) A total liabilities/equity ratio of no greater than four to one.
(f) The employer's debt structure, including current versus long term debt,
recent drastic changes in debt, etc.
(g) The employer's retained earnings trend.
(h) Whether the employer has significant fluctuations in specific balance
sheet numbers from one year to the next.
(i) The employer's bond rating.
(2) The employer shall demonstrate that if it sustains a catastrophic or
severe workers' compensation loss, it has the ability to maintain its
financial viability and to cover all costs of the retrospective rating plan
through closure.
(3) The employer shall maintain a safety program approved by the bureau's
division of safety and hygiene.
(4) The employer cannot have entered into a part-pay agreement for payment of
assessments due the state insurance fund for the past three rating years
preceding the beginning date of the retrospective policy year.
|