You are applying for a master certificate after July 1, 1994. What is the amount of net worth and net income needed to qualify for self insurance?

• A. $2,220,000 and $220,000 earnings in the past year
• B. $5,000,000 net worth and $500,000 earnings in the past year
• C. $5,000,000 net worth and average net income for the past five years of at least $500,000
• D. $7,500,000 net worth and $700,000 net income in the past year

Answer: (C)

To qualify for a master certificate, you must demonstrate sustained financial strength to support self-insured obligations. After July 1, 1994, the standard is net worth of $5,000,000 and an average net income of at least $500,000 over the past five years. The five-year income average ensures the applicant has ongoing profitability, not just a single strong year, which is crucial for backing potential claims. Other options either cite different dollar amounts or rely on a single-year earnings figure, which does not meet the established threshold for a master certificate.