8 AAC 46.030. Factors considered

(a) In determining an employer's financial ability to meet the obligations under the Act and in determining if a security deposit is required, the board will review the employer's audited financial statements and other information submitted in support of its application and will consider the

(1) ratio of tangible net worth to annual compensation premium;

(2) ratio of working capital to total assets;

(3) ratio of quick assets to current liabilities;

(4) ratio of tangible net worth to annual self-insurance retentions;

(5) ratio of current assets to current liabilities;

(6) ratio of debt to tangible net worth;

(7) ratio of cash flow to current liabilities;

(8) ratio of working capital to net sales;

(9) profit and loss history;

(10) form of business organization and relationship of parent company to subsidiary companies;

(11) compensation loss history, outstanding compensation claims liability, and proposed excess insurance coverage;

(12) number of employees;

(13) nature of business;

(14) safety program;

(15) obligations under all other self-insured programs including their self-insured retention levels;

(16) claims facilities and administration;

(17) financial trends of the employer for the last three years; and

(18) the economic outlook for the industry.

(b) The information considered in (a) of this section will be used along with an overall evaluation of the employer's financial condition based on generally accepted accounting principles to determine if the employer has the financial ability to pay current and future obligations under the Act. All financial ratios are defined according to their normal usage in analyzing financial statements. All financial ratios will be compared to the average ratios in the industry relative to the employer's type of business and for businesses of similar financial size.

History: Eff. 11/20/83, Register 88

Authority: AS 23.30.005

AS 23.30.075

AS 23.30.090

The Alaska Administrative Code was automatically converted to HTML from a plain text format. Every effort has been made to ensure its accuracy, but neither Touch N' Go Systems nor the Law Offices of James B. Gottstein can be held responsible for any possible errors. This version of the Alaska Administrative Code is current through June, 2006.

If it is critical that the precise terms of the Alaska Administrative Code be known, it is recommended that more formal sources be consulted. Recent editions of the Alaska Administrative Journal may be obtained from the Alaska Lieutenant Governor's Office on the world wide web. If any errors are found, please e-mail Touch N' Go systems at E-mail. We hope you find this information useful. Copyright 2006. Touch N' Go Systems, Inc. All Rights Reserved.