A private self-insurer granted an initial individual certificate to self-insure Worker's Compensation liabilities that have not previously self-insured must contract with a ______ for the ______ full calendar years of self-insurance.

• A. Third party administrator; The first three
• B. Insurance broker; The first two
• C. Independent consultant; The first five
• D. Attorney; The first one

Answer: (A)

When a private self-insurer is granted an initial certificate to self-insure workers’ compensation liabilities that haven’t been self-insured before, the rules require hiring a third-party administrator to handle claims for the first three full calendar years. A third-party administrator (TPA) specializes in managing, reserving, and paying workers’ comp claims, providing medical management, subrogation, and compliance support. This setup gives the self-insurer professional, experienced claim handling during the early period when internal processes and resources may still be developing, helping ensure accurate and timely indemnity payments, medical care coordination, and regulatory reporting.

A broker focuses on obtaining insurance coverage rather than ongoing claims administration, so that choice isn’t aligned with the requirement. An independent consultant or an attorney isn’t designated to perform the day-to-day claims administration duties specified by the regulation. And the three-year duration is the specific period required; shorter or longer durations aren’t correct per the rule.