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

Answer: (A)

To qualify for a master certificate for self-insurance, California requires solid financials: a net worth of $5,000,000 and an average net income over the past five years of at least $500,000 per year. This five-year average shows sustained profitability, not just a single strong year.

The best choice matches these exact criteria: $5,000,000 in net worth and an average yearly net income of at least $500,000 over the last five years.

The other options don’t fit because they either use a lower net worth, or they rely on earnings from only the past year rather than a five-year average, or they mix thresholds in ways that don’t align with the required standard.