California Code of Regulations › Title 8 - Industrial Relations › Division 1 - Department of Industrial Relations › Chapter 8 - Office of the Director › Subchapter 2 - Administration of Self-Insurance Plans › Article 13 - Group Self-Insurance › Section 15497 - Adjustments in the Amount of a Group Self-Insurer's Security Deposit

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) Each group
					 self-insurer's security deposit requirement pursuant to Labor Code Section
					 3701 shall be
					 reviewed by the Chief at least annually following receipt of the private
					 group's Self-Insurer's actuarial study and summary. If following the receipt of
					 the group self-insurer's actuarial study and summary an increase in security
					 deposit is required, the increase shall be calculated pursuant to Labor Code
					 Section
					 3701 and
					 Section 15496(a) of these
					 regulations and shall be posted no later than thirty (30) days from the date
					 the written notice of security deposit demand is made.
(b) In addition to any increase in the
					 security deposit pursuant to subsection (a), the Chief may require the group
					 self-insurer to post additional amounts pursuant to Section
					 15496 in the event that new
					 affiliate members have been added to the group self-insurer but have not yet
					 reported a full year of losses, in the event of audit increases pursuant to
					 Section 15301, or in the event of a change
					 in the deposit rate pursuant to Sections
					 15497 or
					 15497.1.
(c) No group self-insurer shall reduce its
					 security deposit based on calculations pursuant to Section
					 15496(a) without
					 prior written authorization from the Chief.
(d) For good cause, the Chief may require a
					 group self-insurer to increase its security deposit at any time. Good cause
					 includes, but is not limited to, impairment of financial condition of the
					 self-insurer as determined by the Chief, increases in group membership,
					 increases in losses as indicated in Self-Insurer's Annual Report, increases in
					 losses as indicated in the actuarial study and summary or by audit over losses
					 projected in actuarial reports, or failure of the group self-insurer to
					 maintain total assets greater than its total liabilities.
(e) In the event that a security deposit
					 increase is required and upon sending by the Chief to the group self-insurer a
					 letter demanding the increase, a perfected security interest in the group
					 self-insurer's and each affiliate group member's assets to the extent of any
					 unsecured portion of the group self-insurer's incurred liabilities shall be
					 created in favor of the Director pursuant to Labor Code Section
					 3701(k).
1. New
						section filed 3-2-2009; operative 3-2-2009 pursuant to Government Code section
						11343.4
						(Register 2009, No. 10).
2. Amendment filed 12-31-2012 as an
						emergency; operative 1-1-2013 pursuant to Government Code section
						11346.1(d)
						(Register 2013, No. 1). A Certificate of Compliance must be transmitted to OAL
						by 7-1-2013 or emergency language will be repealed by operation of law on the
						following day.
3. Certificate of Compliance as to 1-1-2013 order
						transmitted to OAL 7-1-2013 and filed 8-13-2013 (Register 2013, No.
						33).
4. Amendment of section heading and subsections (a) and (e)
						filed 12-14-2016; operative 1-1-2017 pursuant to Government Code section
						11343.4(b)(3)
						(Register 2016, No. 51).
Note: Authority cited: Sections
						  54,
						  55,
						  3701.8 and
						  3702.10, Labor
						  Code. Reference: Sections
						  59,
						  3700,
						  3701,
						  3701.5,
						  3701.7,
						  3701.8,
						  3702,
						  3702.3,
						  3702.6,
						  3702.10,
						  3740,
						  3741,
						  3742,
						  6319(f)
						  and
						  6401.7, Labor
						  Code.