California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 3 - Insurers › Article 9 - Workers' Compensation Insurance. Dividends (Refunds) to Policyholders. Regulations Governing Classification of Risks and Premium Rates, Policy and Endorsement Forms › Section 2503 - Participating Workers' Compensation Policies-Required Provisions

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) Every workers'
				  compensation policy issued on a participating basis shall include a
				  participating provision or endorsement indicating that it is a participating
				  policy. All workers' compensation policy forms, including any participating
				  provisions or endorsements, shall be filed with the Commissioner prior to
				  use.
(b) If a policy is issued on a
				  participating basis, the participating provision or endorsement shall be
				  designated "Participating Provision" and contain the following language:
"Under California Law it is unlawful for an insurer [us] to
					 promise the future payment of dividends under an unexpired workers'
					 compensation policy or to misrepresent the conditions for dividend payment.
					 Dividends are payable only pursuant to conditions determined by the [our] Board
					 of Directors or other governing board [of the Company] following policy
					 expiration. Forfeiture of a right to, reduction in the amount of, or delay in
					 the payment of a policyholder's dividend due to the policyholder's failure to
					 accept renewal of the policy or subsequent policies issued by the same insurer
					 is illegal and constitutes an unfair practice."
(c) A workers' compensation insurer may
				  advise a prospective policyholder, directly or through its agent or an
				  insurance broker or solicitor, of the provisions and factors, or the
				  arrangement thereof, that shall be set forth in the participating provision,
				  provided that such advice or provisions and factors shall not set forth or
				  imply, directly or indirectly, the amount of dividend or percentage of premium
				  which will be paid as dividend, or amount or percentage of premium to be
				  retained by the insurer after payment of dividend.
(d) A participatory provision shall set forth
				  any time schedule during which the insurer intends to consider, compute or pay
				  any dividend, if applicable.
1. Amendment
					 filed 12-30-83; operative 1-1-84 pursuant to Government Code section
					 11346.2(d)
					 (Register 84, No. 1).
2. Editorial correction implementing 12-30-83
					 amendments and adding HISTORY 1 (Register 98, No. 40).
3. Change
					 without regulatory effect amending section and NOTE filed 1-8-2015 pursuant to
					 section 100, title 1, California Code of
					 Regulations (Register 2015, No. 2).
4. Amendment of section heading,
					 repealer of first paragraph, amendment of subsections (a)-(b) and new
					 subsections (c)-(d) filed 5-31-2016; operative 7-1-2016 (Register 2016, No.
					 23).
Note: Authority cited: Sections
						790.10,
						10191 and
						11659,
						Insurance Code. Reference: Sections
						780,
						781,
						790,
						790.01,
						790.02,
						790.03,
						10191,
						11657,
						11658 and
						11659,
						Insurance Code.