For master certificate qualification after July 1, 1994, which of the following is a required figure?

For master certificate qualification after July 1, 1994, which of the following is a required figure?

• A. Net worth of $5 million and average annual earnings of $500k over 5 years
• B. Net worth of $2 million and $200k earnings
• C. Net worth of $3 million and $1 million earnings
• D. Net worth of $10 million and $2 million earnings

Answer: (A)

The key idea is the minimum financial standards required to qualify for a master certificate after July 1, 1994. To be eligible, an entity must demonstrate both sufficient net worth and a solid earnings history: a net worth of five million dollars and average annual earnings of five hundred thousand dollars over the prior five years. This combination shows the financial stability and ongoing capacity to support a self‑insured program. The option that lists these exact minimums—net worth of five million and average annual earnings of five hundred thousand over five years—is the correct one because it matches the required thresholds. The other options fail to meet these two minimum criteria (one metric is too low in some cases, or both are not aligned with the stated minimums), so they do not satisfy the qualification standard.

The key idea is the minimum financial standards required to qualify for a master certificate after July 1, 1994. To be eligible, an entity must demonstrate both sufficient net worth and a solid earnings history: a net worth of five million dollars and average annual earnings of five hundred thousand dollars over the prior five years. This combination shows the financial stability and ongoing capacity to support a self‑insured program.

The option that lists these exact minimums—net worth of five million and average annual earnings of five hundred thousand over five years—is the correct one because it matches the required thresholds. The other options fail to meet these two minimum criteria (one metric is too low in some cases, or both are not aligned with the stated minimums), so they do not satisfy the qualification standard.