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 3 - Security Deposit Requirements › Section 15212 - Surety Bonds

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a)
					 Surety bonds shall be accepted by the Manager only if written by an "admitted
					 surety insurer" as defined by California Code of Civil Procedure, Chapter 2,
					 Bonds and Undertaking, Section
					 995.120(a).
(b) A surety bond underwritten by an
					 organization owned and/or controlled by the self insurer, who is also the
					 principal on the surety bond, shall be rejected by the Manager unless the
					 surety company is financially independent of its parent.
(c) The Manager shall make available, upon
					 request of any self insurer, an appropriate quantity of surety bond forms (Form
					 A4-20 (Rev. 11/92)), increase riders (Form A4-21b (Rev. 4/92)) decrease riders
					 (Form A4-21a (Rev. 4/92)), name change riders (Form A4-22 (Rev. 4/92)), and
					 special form change riders (Form A4-23 (Rev. 4/92)), and Release of Surety
					 (Form A4-24 (11/92)), California Code of Regulations, Title 11, Chapter 2,
					 Section 25, which are hereby incorporated
					 by reference.
NOTE: The current surety bond forms and rider forms are
						contained in Plates F-1 through F-6 of the Appendix immediately following the
						last Article in these Subchapter 2 regulations.
(d) A surety bond accepted by the Manager as
					 security deposit shall be continuous in form. Surety bonds shall be exonerated
					 only by their terms and cancelled only according to the specific language in
					 the bond form. Exoneration of a surety bond by the Manager shall only be done
					 when the bond language includes a release provision and the self insurer has
					 substituted another acceptable security deposit or combination of acceptable
					 deposits that totals to the amount determined by the Director to be required as
					 a security deposit.
NOTE: Bond forms previously accepted as security deposit
						have differing terms and conditions from the current surety bond forms and some
						of the prior bond forms may not include a release provision in the bond
						language. Such bonds cannot be exonerated by the Manager unless the prior bond
						form is changed to the current terms and conditions by means of reinstatement
						of the surety bond, if cancelled, and execution of a Special Form Change
						Rider.
(e) The surety
					 company shall submit a Notice of Cancellation in writing to the Manager on any
					 surety bond according to the terms of the bond. The surety shall give the
					 Manager written notice at least (thirty) 30 days in advance of the effective
					 date of cancellation of an existing surety bond. After receipt of the written
					 cancellation notice and receipt of a replacement security deposit, as set forth
					 in subsection (d) and (g), in the amount required by the Director, the Manager
					 may issue a Release of Surety to the surety company for the cancelled
					 bond.
(f) Surety bonds and all
					 riders to the surety bonds shall be executed by the surety company's
					 Attorney-In-Fact and the Attorney-In-Fact's appointment or power of attorney
					 must accompany all copies of the bond or rider being submitted.
NOTE: The Attorney-In-Fact does not need to be a
						California Attorney- In-Fact.
(g) The self insurer shall substitute the
					 deposit represented by the penal sum of the cancelled surety bond with another
					 acceptable form of security deposit, in the full amount required by the
					 Director, within thirty (30) days of the receipt of bond cancellation notice to
					 the Manager.
EXCEPTIONS:
(1)
					 A surety bond issued prior to the effective date of these regulations where the
					 bond secures liabilities of a former self insurer.
(2) An active self insurer in the process of
					 revocation on the effective date of this regulation of its self insurance
					 authority and which has fully insured its workers' compensation liabilities
					 with a standard workers' compensation policy from an admitted carrier prior to
					 the effective date of this regulation.