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Workers' Compensation

Security and Compliance


Workers' compensation insurance coverage and compliance issues are addressed within the Security and Compliance Division. The main focus of this division is to ensure that nonexempt employers maintain workers’ compensation coverage for their employees.

This division is comprised of two branches:

  • The Security Branch reviews the individual self-insured employers’ claim files, monitors their financial strength and determines the security requirements necessary to secure benefits for the self-insured employers’ workforce.
  • The Compliance Branch consists of two sections: Administrative Processing Section and the Enforcement Section.
    • The Administrative Processing Section is responsible for certifying coverage, preparing Civil citations, processing penalty payments, and recording of Rejection Notices.
    • The Enforcement Section investigates the status of insurance coverage through on-site visits to Kentucky employers. This ensures that workers within the Commonwealth are protected in the event of a workplace injury.

Security Branch

The Security Branch reviews the individual self-insured employers’ claim files, monitors their financial strength and determines the security requirements necessary to secure benefits for the self-insured employers’ workforce.


Mike Watts, Branch Manager
Phone: 502-782-4510
Fax: 502-564-0916

Requirements for Becoming Self-Insured

First: The applicant or guarantor must have assets in excess of all liabilities of at least $10 million. If this initial requirement is met, the employer may obtain a Self-Insurance Package [PDF, 388KB]. This package includes an application (Form SI-02).

Second: Two months prior to the planned date for self-insured status, the employer must submit the completed Form SI-02 along with certified, audited financial statements for the prior three years of operation. DWC will then review the application and statements and will inform the employer of initial approval or denial.

Third: If the application and statements are initially approved, the employer must submit loss data for the past five years. The employer will then be informed of the security requirement.

Fourth: The employer must submit the following information as applicable:

  • Security: Prior to being certified as a self-insured employer and continuing thereafter, primary security adequate to secure the employer's workers' compensation liabilities shall be posted pursuant to the provisions found in KRS 342.340 and 803 KAR 25:021 Section 5. The initial security amount will be based upon the average of indemnity and medical losses during the three highest years of the preceding five years or a minimum of $500,000.
  • Guarantee Agreement: A parent company must submit a Guarantee Agreement for all subsidiaries that it intends to include under its self-insured program, including the names and addresses of each subsidiary and location. A subsidiary that has separate financial statements may qualify on its own to be self-insured.
  • Resolution of Board: A corporation must submit its board of directors' resolution, authorizing and directing the corporation to undertake to become self-insured.
  • Coverage limit: Specific excess insurance must have a minimum coverage limit of $10 million per occurrence.
  • T.P.A. Service Agreements: If a service organization is used, a statement from the service organization and self-insured employer stating that the contract between the two parties meets the requirements pertaining to claims adjustment.

Starting in 2006, the individual self-insurance certificates will remain in effect until revoked or modified by the Commissioner of the DWC. In the past, certificates were issued annually.

Reporting Requirements for Individual Self-Insurers

The files listed below will assist in meeting the reporting requirements for the 2017 simulated premium calculation and the 2017 security review.

  • Data Reporting Instructions [PDF, 421KB]
    Data reporting requirements for loss report and simulated premium calculation report.
  • Certification of Submitted Loss Data [PDF, 72KB]
    This certificate must be submitted annually to certify the loss information is accurately reported.
  • Loss Report Enclosure A [XLSX, 27KB]
    This is an example of how the loss report should look.
  • Loss Report [XLSX, 33KB]
    This is an example of how the loss report should look. This version will assist in assuring that the claims in litigation status on 12/31/17 are meeting the Department of Workers' Claims (DWC) minimum indemnity reserve requirements.
  • Simulated Premium Calculation [XLS, 45KB]
    This file will calculate the simulated premium by entering yearly loss and payroll totals in the proper cells.
  • Payroll Enclosure E [XLSX, 27KB]
    This sheet must include quarterly payroll information for each self-insured entity.

Guaranty Funds

House Bill 1 (December 1996) established three nonprofit, unincorporated guaranty associations to protect disabled workers and dependents in the event of a self-insured individual's insolvency. Separate guaranty funds now exist for individual self-insureds, group self-insureds, and coal employer self-insureds. Membership in a guaranty fund is mandatory. These funds are listed below.

P.O. Box 910623
Lexington, KY 40591-0623
c/o Dickinson Wright PLLC
300 West Vine Street, Suite 1700
Lexington, KY 40507-1621
Phone: 859-899-8700
Fax: 844-670-6009
Chairperson: Al Cates

Groups are now regulated by the Department of Insurance please call 502-564-3630 for more information.

Compliance Branch

The Compliance Branch plays an important role in the Department of Workers' Claims. The goal of the branch is to ensure that employers subject to the Workers' Compensation Act comply with statutory requirements. The branch also encourages timely compliance through educational initiatives. Compliance is confirmed by regular inspections of employers to verify compliance with the act. The branch consists of two sections: Administrative Processing and Enforcement.


Branch Manager
Phone: 1-800-731-5241
Fax: 502-564-0916

Administrative Processing Section

The Administrative Processing Section consists of a section supervisor and support staff.

Responsibilities of the section:

  • Certifying proof of coverage,
  • Process civil citations that are approved by the commissioner and issued to non-compliant employers,
  • Process payments of penalties collected to forward to Kentucky Workers' Compensation Funding Commission,
  • Process and record Rejection Notices.

Administrative Processing Forms

To Order Blank Rejection Notice (Form 4), please submit a request to:

Please include the following information when requesting forms:

  • Business Name
  • Contact Person
  • Mailing Address
  • Phone Number
  • Form Type
  • Quantity Requested

Only Original Form 4s are accepted for processing, no photocopies.


Amy Roe, Section Supervisor
Phone: 502-782-4485
Fax: 502-564-0916

Enforcement Section

This section consists of a section supervisor and a staff of 10 workers' compensation coverage and compliance investigators located in various field offices across the state. The section investigates Uninsured Employer Fund (UEF) claims, leads generated in-house, and complaints reported through various sources. When necessary, testimony and evidence are presented in official proceedings.


Will McGinnis, Section Supervisor
Phone: 502-782-4450
Fax: 502-564-0916