1. (a) Employers shall make an application by filing a completed and signed Form TWCC-160 and required attachments:

   1. (1) if required to file a Form 10-K by the Security and Exchange Commission (SEC), the applicant's Form 10-K for the preceding three fiscal years; and
   2. (2) the applicant's independently audited financial statements with the accompanying footnotes and the auditor's opinion for the preceding three fiscal years. The independent auditor must be a certified public accountant (CPA) who is not an employee of the applicant.
2. (b) Incomplete applications may be returned to the applicant.
3. (c) The sworn affidavit required on the TWCC-160 also applies to all attachments.
4. (d) If the report under subsection (a)(2) of this section is dated more than six months prior to the date of the application, an interim report may be required.

5. (e) Applicants will be evaluated for stability and financial strength. In addition to the factors specified in Texas Civil Statutes, Article 8308-3.56, the applicant must submit a credit or debt rating analysis, and the director shall consider:

   1. (1) liquidity ratio;
   2. (2) ratio of tangible net worth to annual self-insurance retention;
   3. (3) ratio of current assets to current liabilities;
   4. (4) ratio of tangible net worth to long-term debt;
   5. (5) ratio of tangible net worth to annual standard compensation premium;
   6. (6) ratio of tangible net worth to sales;
   7. (7) ratio of tangible net worth to total liabilities;
   8. (8) cash flow;
   9. (9) working capital;
   10. (10) profitability; and
   11. (11) Dun and Bradstreet or other recognized credit reporting agency's ratings; or
   12. (12) debt ratings from Standard and Poor's or Moody's.

Source Note:The provisions of this §114.3 adopted to be effective January 1, 1993, 17 TexReg 7896.