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 15210.1 - Adjustments in the Amount of Security Deposit

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) Pursuant to Labor Code Section
					 3701, the
					 security deposit requirement of each individual private self-insured employer
					 shall be reviewed by the Chief at least annually following receipt of the
					 private Self-Insurer's Annual Report and Actuarial Study and Summary.
(b) The individual private self-insurer shall
					 post any annual increase or decrease in security deposit required pursuant to
					 Labor Code Section
					 3701 indicated
					 in the annual actuarial study and summary as specified by these regulations or
					 as determined by the Chief due to an audit, change in the self-insured
					 employer's program or based on a change in required deposit made by the Chief
					 under these regulations. This deposit posting is due no later than 30 days from
					 the date the written notice of security deposit demand is made.
(c) No reduction or decrease in security
					 deposit shall be made without prior written authorization of the Chief. The
					 Chief shall review each individual private certificate holder's annual report
					 and the certificate holder's file no less frequently than annually to determine
					 the extent to which a decrease in deposit, if any, may be authorized.
(d) For good cause, the Chief may require the
					 individual private self-insurer to post and maintain additional security
					 deposit or adjust the required security deposit for a specific private
					 self-insurer above the actuarially determined expected losses also commonly
					 known as the actuarial central estimate, including incurred but not reported
					 (IBNR) liabilities, Allocated loss adjustment expense (ALAE), and Unallocated
					 loss adjustment expense (ULAE) as set forth in Labor Code Sections
					 3701,
					 3701.7, and
					 3701.8. Good
					 cause includes, but is not limited to, understated future liability of claims
					 on the Self-Insurer's Annual Report; the lack of, or an inadequate or
					 unacceptable, actuarial study or summary; a pattern of understated liabilities
					 in claim files audited in an audit; failure to report all claims; poor
					 administration of claims or payment of benefits due injured workers found in
					 the audit results of the Division of Workers' Compensation Audit Unit or audits
					 by the Office of Self-Insurance Plans; lack of an effective safety and health
					 program as indicated by final citations issued by the Division of Occupational
					 Safety and Health showing repeat or willful violation of safety and health
					 regulations; impairment of financial condition of the self-insurer as
					 determined by the Chief; failure to provide and maintain current and complete
					 parental Guaranty of Workers' Compensation Liabilities or board of director's
					 resolutions; the result of evaluation of an application to self-insure; or to
					 cover a period of unlawful self-insurance; or being required to post a security
					 deposit in whole or part pursuant to Section
					 3701.8 of the
					 Labor Code and Article 3.1 (commencing with Section
					 15220) of this subchapter
					 2.
(e) Whenever the Chief
					 determines that a deposit increase is required, the Chief shall send written
					 notice to the individual private self-insurer pursuant to Labor Code Section
					 3701(b) and
					 (j). Notice of the amount of deposit due
					 shall create a perfected security interest for the self-insurer's Security
					 Fund.
(f) Any increase in the
					 security deposit requirement for an individual private self-insurer following
					 the Chief's determination that estimated future liabilities had been
					 understated on the private employer's Self-Insurer's Annual Report, shall be
					 reported to the Security Fund. The Security Fund shall be authorized to adjust
					 the deposit assessment for the alternative composite deposit.
1. New
						section filed 12-22-92; operative 1-21-93 (Register 93, No. 2).
2.
						Change without regulatory effect amending subsection (e) filed 8-27-98 pursuant
						to section 100, title 1, California Code of
						Regulations (Register 98, No. 35).
3. Amendment of section and NOTE
						filed 5-30-2003 as an emergency; operative 5-30-2003 (Register 2003, No. 22). A
						Certificate of Compliance must be transmitted to OAL by 9-29-2003 or emergency
						language will be repealed by operation of law on the following
						day.
4. Certificate of Compliance as to 5-30-2003 order transmitted
						to OAL 9-29-2003 and filed 11-12-2003 (Register 2003, No. 46).
5.
						Amendment filed 3-2-2009; operative 3-2-2009 pursuant to Government Code
						section
						11343.4
						(Register 2009, No. 10).
6. 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.
7. Certificate of Compliance as to 1-1-2013 order
						transmitted to OAL 7-1-2013 and filed 8-13-2013 (Register 2013, No.
						33).
8. Amendment of subsections (a) and (d) 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),
						  6401.7, Labor
						  Code.