Report on Self Insurance Groups
The report contains several general recommendations for legislation. Shown below are drafts of language that have been suggested to implement some of those recommendations. These drafts are intended as a basis for discussion and may not exactly reflect the recommendations of the Commission on Health and Safety and Workers’ Compensation.
Section 3702.11 is added to the Labor Code as follows:
3702.11. (a) Each group self-insurer shall annually file with the Director a certified, independently audited financial statement, prepared by an independent certified public accountant, and a written actuarial report prepared by an independent actuary, who is an Associate or Fellow of the Casualty Actuary Society or a Member of the American Academy of Actuaries, in the form prescribed by the Director. The audited financial statement and actuarial report shall conform with the requirements of regulations adopted pursuant to this part. All financial statements and actuarial reports filed with the Director shall concurrently be provided, in complete and un-redacted form, to the California Self-Insurers' Security Fund. Failure to timely fulfill the requirements of this section shall constitute good cause to revoke the group self-insurer's Certificate of Consent to Self-Insure.
Section 3745 of the Labor Code is amended to read as follows:
(a) The fund shall maintain cash, readily marketable securities, or
other assets, or a the payment of
compensation obligations of an insolvent self-insurer pending director may establish the minimum amount to be maintained the fund for this purpose.
assessment of the members. The by, or immediately available to,
(b) The fund may assess each of its members a pro rata share of the funding necessary to carry out the purposes of this article. However, no member shall be assessed at one time in excess of 1.5 percent of the benefits paid by the member for claims incurred during the previous calendar year as a self-insurer, and total annual assessments in any calendar year shall not exceed 2 percent of the benefits paid for claims incurred during the previous calendar year. Funds obtained by assessments pursuant to this subdivision may only be used for the purposes of this article.