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

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 net worth and $220,000 earnings in past year.
• B. $5,000,000 net worth and $500,000 earnings in past year.
• C. $5,000,000 net worth and average net income for the past 5 years of at least $500,000
• D. $7,500,000 net worth and $700.000 net income past year

Answer: (C)

California sets two financial thresholds to qualify for self-insurance: a net worth of at least 5,000,000 and an average net income of at least 500,000 per year over the past five years. The crucial point is the requirement is the five-year average income, not just earnings in the most recent year. That’s why the option with $5,000,000 net worth and an average annual net income of at least $500,000 over the last five years is the correct fit. The other options either use the wrong metric (annual income instead of a five-year average) or propose different thresholds that aren’t the stipulated minimums.

California sets two financial thresholds to qualify for self-insurance: a net worth of at least 5,000,000 and an average net income of at least 500,000 per year over the past five years. The crucial point is the requirement is the five-year average income, not just earnings in the most recent year. That’s why the option with $5,000,000 net worth and an average annual net income of at least $500,000 over the last five years is the correct fit. The other options either use the wrong metric (annual income instead of a five-year average) or propose different thresholds that aren’t the stipulated minimums.