California Labor Code

§ 3701

LAB § 3701 Effective Jan 1, 2013Div. 4 · Part 1 · Ch. 4 · Art. 1

Statute text

(a)Each year every private self-insuring employer shall secure incurred liabilities for the payment of compensation and the performance of the obligations of employers imposed under this chapter by renewing the prior year’s security deposit or by making a new deposit of security. If a new deposit is made, it shall be posted within 60 days of the filing of the self-insured employer’s annual report with the director, but in no event later than May 1.

(b)The solvency risk and security deposit amount for each private and group self-insurer shall be acceptable to the Self-Insurers’ Security Fund.

(c)Unless otherwise permitted by regulation, the deposit shall be an amount equal to the self-insurer’s projected losses, net of specific excess insurance coverage, if any, and inclusive of incurred but not reported (IBNR) liabilities, allocated loss adjustment expense, and unallocated loss adjustment expense, calculated as of December 31 of each year. The calculation of projected losses and expenses shall be reflected in a written actuarial report that projects ultimate liabilities of the private self-insured employer at the expected actuarial confidence level, to ensure that all claims and associated costs are recognized. The written actuarial report shall be prepared by an actuary meeting the qualifications prescribed by the director in regulation.

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Legislative history

Amended by Stats. 2012, Ch. 363, Sec. 11. (SB 863) Effective January 1, 2013.