DEPARTMENT OF REVENUE
Division of Motor Vehicles
FINAL REGULATION MOTOR VEHICLE SELF-INSURANCE
1 CCR 204-18
Section 1.	Authority and basis
Authority for this regulation derives from the director's powers under C.R.S. sections 10-4-704 and 42-7-201 of the Acts and article 4 of title 24 C.R.S. Both C.R.S. sections 10-4-716 and 42-7-501 give the director discretionary authority to issue certificates of self-insurance to an applicant in whose name more than 25 motor vehicles are registered.
Section 2.	Purpose.
The purpose of this regulation is to set forth the criteria and procedures applicable to the granting, denying and cancellation of certificates of self-insurance pursuant to the Acts.
Section 3.	Definitions.
a.	Each term used herein has the same meaning given the term by the Acts.
b.	In addition, as used herein:
(1)	“Acts” means the “Colorado Auto Accident Reparations Act,” C.R.S. part 7, article 4, title 10, as hereafter amended or reenacted, or the “Motor Vehicle Financial Responsibility Act,” C.R.S. article 7, title 42, as hereafter amended or reenacted, or both;
(2)	“applicant” means a person subject to the Acts in whose name more than 25 motor vehicles are registered who files an application with the department for certificates of self-insurance;
(3)	“application” means a request, on a fully completed form prescribed by the department, that certificates of self-insurance be issued;
(4)	“application date” means the due date established by the department for a particular application, or the date the department comes into actual possession of a fully completed application and all required documents and all information necessary to evaluate the application whichever occurs later;
(5)	“business days” means calendar days exclusive of Saturdays, Sundays and legal holidays provided for by C.R.S. section 2-4-104;
(6)	“certificate of self-insurance” or “certificate” means the document or writing issued by the department evidencing the director's discretionary authorization for the applicant to operate motor vehicles registered in Colorado in its name for the period specified by the certificate without having in effect the insurance coverage required by the Acts;
(7)	“claimants' trust account” means a banking institution account created by applicant as provided herein for the primary benefit of persons entitled to payment of self-insurance obligations of the applicant;
(8)	“department” means the Department of the Revenue of the State of Colorado;
(9)	“dominant entity” means the corporation or other legal entity with equity greater than the equity of any other entity within a group of related entities with consolidated financial statements;
(10)	“experienced liability costs” means the annualized amounts paid plus amounts agreed to be paid in the future by or on behalf of applicant related to motor vehicle liability claims and direct benefit claims made against applicant during the three years ending with the calendar month immediately preceding the application date divided by the daily-average number of motor vehicles registered in applicants' name during that period;
(11)	“following certificate” means a certificate that will become effective when a current certificate expires on its stated date;
(12)	“GAAP net worth” means the owner equity shown by certified audited financial statements based upon application of generally accepted accounting principles;
(13)	“interentity guaranty” means a written, unconditional agreement, limited to self-insurance, by a parent entity of an applicant or by brother-sister corporations or other legal entities filing consolidated financial statements with the applicant, in a form acceptable to the department, to pay in a timely manner, all unpaid uninsured obligations of the applicant related to operation of motor vehicles registered in the applicant's name;
(14)	“parent entity” means the corporation or other legal entity owning more than 50 percent of each of the other corporations and/or other legal entities within a group of related entities filing consolidated financial statements;
(15)	“program administrator” means a supervising employee of the department with direct responsibility for the administration of the issuance and cancellation of certificates of self-insurance;
(16)	“self-insurance obligations” means all uninsured obligations of the applicant arising from operation of motor vehicles registered in the applicant's name during any self-insurance period including payment of direct benefits as required under C.R.S. section 10-4-706 as amended or reenacted;
(17)	“self-insurance period” means a continuous period of time covered by one or more currently effective certificates of self-insurance issued to an applicant;
(18)	“self-insured amount” means $500,000 less the portion of the first $500,000 of the applicant's liability arising from any single motor vehicle incident that would be paid by an insurance company authorized to issue such insurance in Colorado, i.e. the retention amount if applicant has excess insurance coverage with a limit of no less than five hundred thousand dollars per specific occurrence;
(19)	“self-insured amount factor” means the dollar amount shown below for each of the various levels of self-insured amounts:
Amount	Factor	
$25,000 or less	$1,750	
More than $25,000 but not more than $65,000	$2,200	
More than $65,000 but not more than $100,000	$2,400	
More than $100,000 but not more than $250,000	$2,900	
More than $250,000	$3,200	
(20)	“self-insurer” or “certificate holder” means a person with a certificate of self-insurance that has not expired or been revoked;
(21)	“solvent” means a financial condition such that the total book value or fair market value, whichever is less, of the applicant's/self-insurer's assets equals or exceeds its total liabilities AND its current assets equal or exceed its current liabilities, and for this purpose, unless credible evidence shows otherwise, the fair market value of an applicant's/self-insurer's assets shall be assumed to be greater than the book value of its assets;
(22)	“taxable income” means reported net income that would give rise to the payment of a federal income tax if loss carryovers, loss carrybacks and applicable federal tax credits are disregarded;
(23)	“tax loss” means a reported net loss for federal income tax purposes;
(24)	“third-party guaranty” means a written, unconditional, irrevocable commercial agreement, by a person unrelated to the applicant, that is authorized to conduct such business in Colorado, in a form acceptable to the department, to pay in a timely manner up to a specified amount the unpaid obligations of the applicant related to the operation of motor vehicles registered in the applicant's name incurred by applicant during a specified period as a self-insurer pursuant to the Acts.
Section 4.	Scope of self-insurance.
a.	Self-insurance is an exception to the statutory requirement that no owner of a motor vehicle required to be registered in the State of Colorado shall operate the vehicle or permit it to be operated on Colorado public highways without a complying policy of insurance in full force and effect.
b.	A certificate of self-insurance applies only to the person in whose name the certificate is issued and only to that person's legal liabilities arising from the operation of motor vehicles registered in that person's name.
c.	Self-insurance does not include uninsured or underinsured motorists' coverages.
d.	A person that elects to become a self-insurer pursuant to the exceptions to the Acts provided by C.R.S. sections 10-4-716 and 42-7-501 assumes all the obligations of an insurance company issuing a complying policy pursuant to the Acts. A self-insured must pay all of its self-insurance obligations in a timely manner.
Section 5.	Certification by department.
a.	Certificates of self-insurance are licenses within the purview of C.R.S. section 24-4-104 of determinate duration which expire automatically. Proceedings related to the granting or denial of applications and to cancellation of current certificates of self-insurance will be set and conducted in accordance with C.R.S. sections 10-4-716(2) and 42-7-501(2) and article 4 of title 24. Due regard will be given at all times to the rights and privileges of all interested persons.
b.	All certificates of self-insurance are effective on a date certain and expire on a date certain as stated in the certificates. Certificates are not subject to renewal.
c.	Any person subject to the Acts in whose name more than 25 motor vehicles are registered may make application to the department for a certificate of self-insurance. A certificate will be issued only upon the filing of an application containing a full disclosure of all pertinent financial information and vehicle ownership and operation information. Applications must be signed under oath attesting to the verity of the stated information by applicant's owner, president or managing partner. Persons with a currently effective certificate must apply anew for a following certificate.
d.	The Acts do not favor self-insurance of obligations arising from the operation of motor vehicles. For that reason, an applicant for either an initial certificate of self-insurance or a following certificate has the burden of proving that the applicant is possessed and will continue to be possessed, until all self-insurance obligations it may incur have been paid, of the ability to pay direct benefits as required under section 10-4-706 and to pay any and all judgments which may be obtained against the applicant.
e.	If financial information of a corporation or other legal entity is consolidated with that of other related entities, and the entity applying for a certificate is not the parent entity for the group, a certificate of self-insurance will not be issued to the applicant unless the application includes a currently effective interentity guaranty of all self-insurance obligations that have been or may be incurred by the applicant.
f.	Certificates of self-insurance will not be issued unless applicant expressly agrees to make benefit payments as provided by C.R.S. section 10-4-708(1).
g.	A certificate of self-insurance will be in a form approved by the department and will show, at a minimum, registrant's name and address; the beginning and ending dates of the self-insurance period; and, a statement of the procedure for a member of the public to make a claim against the applicant as a self-insurer including the title, telephone number and address of the claims administrator(s).
h.	A certificate of self-insurance will be issued to a public entity that is a motor carrier which chooses the self-insurance option under C.R.S. section 40-16-104 provided the public entity's governing body certifies that the public entity is self-insuring all or part of its general liability as authorized by C.R.S. sections 24-10-115 or 24-10-115.5.
Section 6.	Criteria summary.
a.	A certificate of self-insurance will be issued to any person subject to the acts who files an application with the department as provided in this regulation who:
(1)	is subject to the compulsory insurance requirements of C.R.S. section 42-4-1409;
(2)	is a person in whose name more than 25 motor vehicles are registered;
(3)	has been in full compliance with the Acts during the 2 years preceding the application date, or so long as the applicant has operated motor vehicles in Colorado, whichever is shorter;
(4)	has demonstrated that it presently has the ability to pay all obligations as they become due out of the operation of motor vehicles registered in the person's name; and,
(5)	has demonstrated that it will have in the future the ability to pay all of the person's self-insurance obligations as and when they become due.
Section 7.	Present Ability.
a.	The applicant's present ability to pay all self-insurance obligations that may be or may have been incurred by the applicant is of critical importance to the department's decision on an application. This requirement may be satisfied by credible evidence that the applicant presently is solvent and that applicant meets one of the following alternate tests.
b.	Alternate test No. 1. The applicant, individually or in conjunction with a group of related entities that has executed an interentity guaranty as provided by this regulation, either(1) has a current GAAP net worth of not less than $20 million, or (2) has unencumbered current assets that exceed current liabilities by the greater of $1,500,000 or ten times the applicant's proposed self-insurance amount. The evidence presented to the department must include audited financial statements attested to by a certified public accountant covering not less than three full years of operations by the applicant; however, financial statements covering an appropriate lesser continuous period will be acceptable for an applicant who has not been in business a full three years if consolidated financial statements are not presented or if none of the entities included in consolidated financial statements submitted have been in business a full three years.
c.	Alternate test No. 2. The applicant has procured a satisfactory third-party guaranty for the payment of unpaid claims and reasonable attorney fees of persons entitled to payment of direct benefits by the applicant as required under C.R.S. section 10-4-706, as amended, and for the payment of any unpaid motor vehicle operation related judgments which may be obtained against the applicant in an aggregate amount that is (a) not less than $100,000 and (b) not less than three times the applicant's self-insured amount and (c) not less than the applicant's self-insurance amount factor multiplied by the number of motor vehicles to be self-insured by the applicant.
d.	Alternate test No. 3. The applicant has established a CLAIMANTS' TRUST ACCOUNT which applicant intends to use in whole or in part to make all payments required of it as a self-insurer. The following requirements are applicable to all claimants' trust accounts:
(1)	The applicant has established a trust account at a banking institution of its choice within Colorado.
(2)	The account balance is an asset of a trust created for the benefit of persons entitled to payment of self-insurance obligations owed by applicant.
(3)	The account balance is not and never will be considered an asset of the applicant and will not be subject to the claims of the applicant's creditors.
(4)	The trust will have been created by an appropriate document or documents stating the terms and nature of the trust and be acknowledged by both the bank and the applicant.
(5)	The trust will be irrevocable and will not terminate prior to three years following termination of the last self-insurance period to which the trust is applicable unless the entire corpus has been paid out sooner to primary beneficiaries.
(6)	Applicant may be a secondary beneficiary entitled to payment of the balance remaining in the account after all of applicant's self-insurance obligations have been paid in full.
(7)	Applicant may be the trustee with full power to administer the trust for the benefit of the primary beneficiaries.
(8)	The account shall have an initial and BENCHMARK BALANCE that is (a) not less than $30,000, (b) not less than 1.5 times the applicant's self-insured amount, and (c) is not less than the smaller of (I) 60% of applicant's self-insured amount factor multiplied by the number of motor vehicles to be self-insured by the applicant or (ii) 40% of the applicant's experienced annual liability costs multiplied by the number of motor vehicles to be self-insured by the applicant.
(9)	During any self-insurance period, payments may be made by the trustee from the account in fulfillment of applicant's self-insurance obligations provided the actual account balance never is reduced to less than 75% of the benchmark balance and is always equal to or greater than the benchmark balance on 5th and 20th days of every calendar month. The self-insurer's deposits into the account will become irrevocable additions to the trust corpus made in the ordinary course of the self-insurer's business.
(10)	The applicant shall have authorized the banking institution to provide department representatives full and complete information about the claimants' trust account and individual account transactions.
(11)	Appellant shall provide the department a copy of each claimants' trust account monthly bank statement not less than 10 days following the statement closing date.
(12)	Any interest earned from the balance of funds held in the trust shall accrue to the benefit of the trust beneficiaries when the balance of funds held in trust is less than the specified BENCHMARK BALANCE and shall accrue to the benefit of the applicant and may be paid to the applicant as determined by the applicant when the balance of funds held in trust is not less than 100.0 % of the BENCHMARK BALANCE specified by paragraph (8) of this subsection 7.d.
(13)	The BENCHMARK BALANCE required as of the first day of each quarter beginning with the second calendar quarter of 1997 through the first calendar quarter of 1999 shall be lowered to the following percentages of the BENCHMARK BALANCE otherwise required pursuant to paragraph (8) of this subsection 7.d.:
------------BENCHMARK BALANCE------------
Quarter	Percentage	
2nd quarter 1997	20.0 %	
3rd quarter 1997	30.0 %	
4th quarter 1997	40.0 %	
1st quarter 1998	50.0 %	
2nd quarter 1998	60.0 %	
3rd quarter 1998	70.0 %	
4th quarter 1998	80.0 %	
1st quarter 1999	90.0%	
on and after April 1, 1999	100.0 %	
Section 8.	Future ability.
a.	Certificates of self-insurance will be issued only to an applicant that has a high potential for future financial strength. An applicant must demonstrate that it will have the ability to pay, during and after any self-insurance period, direct benefits and judgments against it related to operation of motor vehicles registered in its name during any self-insurance period. Evidence is required that the applicant reasonably can be expected to continue to be solvent and continue to meet one of the following alternative tests at all times for at least two years following the date its proposed certificate would become effective.
b.	Alternate test No. 1. The applicant, individually or in conjunction with a group of related entities that has executed an interentity guaranty as provided by this regulation, either (1) will have a current GAAP net worth of not less than $20 million, or (2) will have unencumbered current assets that exceed current liabilities by the greater of $1,500,000 or ten times the applicant's proposed self-insurance amount. Complete audited financial statements, prepared and certified by a certified public accountant, covering not less than three immediately prior annual periods will be required to support the application. If the application is for a following certificate, applicant will not need to present financial statements that duplicate documents previously provided to the department in connection with a prior application for a certificate of self-insurance. Profitability and cash flow trends and contingent liabilities will be considered by the department.
c.	Alternate test No. 2. Applicant's business operations probably will be profitable and adequately financed:
(1)	Business operations which have not been profitable in the past will not be deemed likely to be profitable in the future unless failure of the applicant's business operations to produce some taxable income is attributable solely to extraordinary income losses or extraordinary expenses that are unlikely to recur. Except as noted hereafter, the minimum required for a finding that an applicant's business operations will be profitable is evidence that the applicant filed within 12 months of the date of its application a full-year federal income tax return reporting taxable income from business operations. If the applicant's most recent full-year federal income tax return did not report any taxable income from its business operations, the applicant may present the department with evidence that applicant's prior federal income tax returns including its most recent return shows that overall applicant's reported taxable income from business operations exceeded its reported tax loss from business operations during a continuous period of two, three, four or five years. If the applicant has not filed a full-year federal income tax return within 12 months of the date of its application, other evidence that applicant's next filed full-year tax return will report taxable income from business operations will be given appropriate consideration.
(2)	An adequately financed business has enough working capital and cash flow to pay all of its obligations as they come due. Balance sheets, profit and loss statements and cash flow statements for three immediately prior annual periods of the applicant's business operations are required to support an application: however, financial statements covering an appropriate lesser continuous period will be acceptable for an applicant who has not been in business a full three years if consolidated financial statements are not presented or if none of the entities included in consolidated financial statements submitted have been in business a full three years. A poor credit rating is an indication of inadequate financing. The same evaluation factors that would be considered by a lender concerned about the applicant's credit worthiness will also be considered by the department when deciding whether applicant's business operations are and will be adequately financed.
d.	The significance of an applicant's fulfillment of either or both of the alternate tests may be negated by other circumstances of greater import. One example would be a product or service producing much of the applicant's business income that has become obsolete and will not be salable in the future because of known technological or market changes.
Section 9.	Application.
a.	An application for a certificate of self-insurance must be made in the form prescribed by the department and delivered to the Driver Support Services section of the Motor Vehicle Division of the department.
b.	An application will not be considered received until it has been signed under oath and it along with all required documents and information has been physically received at the Driver Support Services section.
c.	With one exception, the same application form with the same information and documents must be submitted whether the applicant is authorized to be a self-insurer by a currently effective certificate of self-insurance or whether the applicant is not a self-insured. A self-insurer's application will not need to include duplicate copies of documents which were part of the application for the applicant's currently effective certificate.
d.	Except when a document duplicates a document submitted to the department as part of a prior application, the following documentation is required:
(1)	Each application must include comparative balance sheets, comparative statements of profit and loss, and cash flow summaries for the applicant's three most recently completed annual periods. The financial statements must be certified either by an independent public accounting firm that audited applicant's books and records and prepared statements or by applicant's owner, president, or managing partner. If the applicant has had less than three full years of business operation, the statements must cover the entire period of applicant's business operations through the calendar month immediately prior to the application date.
(2)	Every application must include statements of applicant's motor vehicle claims history for the three years ending with the calendar month immediately preceding the application date. The statements must show each claim paid during the period, each claim filed during the period and each claim pending at the end of the period. As applicable to each claim, the statements must also show the incident date, claim filing date, amount of claim, reserve amount established for claim, date claim closed, date of payment, amount of payment, any dispute about claim, how dispute was resolved, and the estimated date each pending claim will be paid or otherwise resolved.
(3)	Each application must include a reasonably detailed summary statement of the applicant's plan of operation for its self-insurance program.
(4)	Each application must include a list of the registration number, make, model, year and date first registered in applicant's name in Colorado of each motor vehicle to be covered by the requested certificate of self-insurance.
(5)	Each application must include a properly prepared (proposed) certificate of self-insurance.
(6)	Each application must include a properly executed agreement that, if the application is granted, applicant will make payments of all of its past and future self-insurance obligations as provided by C.R.S. section 10-4-708(1).
(7)	Each applicant who will purchase insurance, i.e. excess coverage, for some portion of the first $500,000 of its potential liability arising from any one motor vehicle incident shall include copies of binders for claims liabilities arising from incidents occurring during a period beginning one year prior to the anticipated self-insurance effective date and ending one year after such date. Evidence of the insurance carrier's authorization to do business in Colorado is also required.
(8)	An applicant electing to use a claimants' trust account for payment of its self-insurance obligations must include copies of all documents pertaining to creation of the trust evidencing compliance with all requirements set forth by section 8 of this regulation and that the trust has been adequately funded.
(9)	An applicant that does not demonstrate a GAAP net worth of $20 million must include additional documents evidencing that it will be profitable in the future and is adequately financed.
(10)	If the applicant is part of a group of corporations for which consolidated financial statements are submitted, an interentity guaranty is required.
(11)	An applicant that is not currently an authorized self-insured must include copies of all motor vehicle liability insurance binders issued to applicant effective during the two years prior to the date proposed certificate of self-insurance would become effective.
Section 10.	Action upon applications.
a.	The issuance of a certificate of self-insurance is a discretionary act based upon the purposes of the Acts, the circumstances of each applicant and the general and specific criteria set forth herein. Each applicant with respect to each application has the burden of presenting evidence sufficient to satisfy a reasonably prudent administrator charged with protection of the public interest that the applicant is possessed, and will continue to be possessed during and beyond the contemplated self-insurance period, of ability to timely pay the applicant's self-insurance obligations.
b.	Applications by a non-self-insurer. Within 15 business days after receipt of a completed application by a person who is not currently a self-insurer, the department shall either issue the applicant's initial certificate of self-insurance or issue a notice of application denial. The notice of denial shall be issued in writing and shall state the grounds for the denial. The notice also shall give notice that the applicant may request within 60 days after the notice mailing date a hearing before the department as provided in C.R.S. section 24-4-105. The notice of denial shall be sent by first class, registered, return-receipt-requested U. S. mail to the address of the applicant as shown on the application. The applicant will have the burden of proof at a requested hearing.
c.	Applications by current self-insurers. Within 10 business days after the application date of an application by a person who is currently a self-insurer, the department shall either issue the applicant a new certificate of self-insurance that will be effective when applicant's current certificate expires or notify the applicant that it has concerns about the applicant's future ability to pay its self-insurance obligations. Written notice of the department's concerns will be communicated to the applicant by facsimile transmission, if possible, and by U. S. mail. The applicant shall have a supplementary period of 7 business days from the department's first notice of concerns to provide the department additional information and/or to meet with the program administrator. The supplemental period may be extended by mutual consent of the applicant and the department. Within 4 business days after the end of the supplementary period, the department shall take final agency action on the application by either issuing a new certificate or issuing a notice of application denial. The notice of denial shall be issued in writing and shall state the grounds for the denial. In addition, the applicant shall be notified that its privilege to operate motor vehicles as a self-insurer will terminate 5 business days after the notice mailing date or on the date stated by its current certificate of self-insurance whichever comes later. The department also shall give notice that the applicant may request within 60 days after the notice mailing date a hearing before the department as provided in C.R.S. section 24-4-105. The notice of denial shall be sent by first class, registered, return-receipt-requested U. S. mail to the address of the applicant as shown on the application. The applicant will have the burden of proof at a requested hearing.
Section 11.	Cancellation of certificate.
a.	When a self-insurer's circumstances and/or actions are such that the director should not be satisfied that the self-insurer is possessed or will continue to be possessed of the requisite ability, the self-insuror's privilege of self-insuring its liabilities arising from the operation of motor vehicles in this state must be terminated to restore to the public the protections the Acts are intended to provide.
b.	Each of the following shall be sufficient basis for the cancellation of a certificate of self-insurance:
(1)	failure of self-insurer to pay any benefits under C.R.S. section 10-4-706 in a timely manner;
(2)	failure of self-insurer to pay or otherwise satisfy, within 30 days after such judgment shall have become final, any judgment related to the operation of a motor vehicle;
(3)	provision of false information concerning a material fact in a current or prior application;
(4)	failure of self-insurer to comply with the Acts and this regulation;
(5)	self-insurer is not solvent;
(6)	a breach of trust by the self-insurer related to a claimants' trust account;
(7)	failure of self-insurer to accept binding arbitration of any action for breach of duty as provided by C.R.S. section 10-4-708(1.5);
(8)	failure of self-insurer to maintain excess insurance coverage that entered into a calculation of a self-insured amount;
(9)	lapse of a third-party guaranty during a self-insurance period;
(10)	a precipitous and material decline in self-insurer's working capital, its ability to pay current general obligations as they come due, or its cash flows;
(11)	any set of circumstances that would cause a prudent lender to decline the extension of credit to the self-insurer; or,
(12)	the totality of self-insurer's circumstances and/or actions is such that the director should not be satisfied that the self-insurer is possessed or will continue to be possessed of the requisite ability to pay all its self-insurance obligations in a timely manner.
c.	When the program administrator has reason to believe a ground for cancellation of a certificate of insurance exists and that cancellation of a certificate of self-insurance may be necessary to protect the public, the program administrator will give the self-insured written notice of the facts or conduct that may warrant cancellation of its certificate of self-insurance. The notice will be sent by facsimile transmission, if possible, and by first class, registered, return-receipt-requested U.S. mail to the last address furnished the department by the self-insurer. Except where the department has reasonable grounds to believe and finds that the self-insurer has been guilty of deliberate and willful violation or that the public health, safety, or welfare imperatively requires emergency action, the self-insurer shall be afforded 6 business days after the notice is sent to submit in writing data, views and arguments with respect to such facts or conduct and to bring itself into compliance with all lawful requirements. The 6-day period may be extended by mutual consent of the self-insurer and the program administrator.
d.	Within 5 working days after the end of the 6-day period and any extension of the period as provided herein by subsection 11. c., the self-insurer will be given written notice that the department will take no further action in the matter or will be given written notice of a hearing as provided in C.R.S. section 24-4-105. A notice of hearing shall set forth the facts and/or acts giving rise to the recommendation of the program administrator that the self-insurer's certificate of self-insurance be canceled prior to their stated expiration date. Such notice shall be served by hand delivery or by facsimile transmission or by first class, registered, return-receipt-requested U.S. mail to the last address furnished the department by the self-insurer. The notice of hearing must be delivered by one of those three means to the self-insurer's address not less than the 5th day prior to the scheduled hearing date. First class mail will be presumed to have been delivered the third working day after it is placed in the U.S. mail.
e.	Where the department has reasonable grounds to believe and finds that a self-insurer has been guilty of deliberate and willful violation or that the public health, safety, or welfare imperatively requires emergency action and incorporates such findings in its order, the director of the Motor Vehicle Division of the department shall issue a department order summarily canceling the self-insurer's certificate of self-insurance. The order shall be served by hand delivery or by facsimile transmission or by first class, registered, return-receipt-requested U.S. mail to the last address furnished the department by the self-insurer. The ordered cancellation of a certificate of self-insurance shall be effective immediately upon delivery to the self-insurer's address. Within 30 days after the date notice was delivered to the self-insurer, the self-insurer may request in writing that the department reinstate its certificate of self-insurance or forthwith hold a hearing thereon. If a request is received by the department within that 30 day period, the department shall either rescind its order or promptly institute a hearing and determine the issue as provided in C.R.S. section 24-4-105.
f.	The director, the assistant executive director or the director's designee shall preside at any hearing on the cancellation of a certificate of self-insurance. His or her decision shall include a statement of findings and conclusions upon all material issues of fact, law, or discretion presented by the record, and an order which shall constitute the department's final agency action with regard to the cancellation of the self-insurer's certificate of self-insurance. The notice of the final agency action shall be sent by first class, registered, return-receipt-requested U.S. mail to the last address furnished the department by the self-insurer. The program administrator shall have the burden of proof at the hearing.
Section 12.	Severability.
If any section of this regulation, or the applicability of any section to any person or circumstance is for any reason held invalid by a court, the remainder of the regulation, or the applicability of such provision to other persons or circumstances, shall not be affected.
Section 13.	Effective date.
This regulation shall become effective on March 11, 1997.