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The DIR Office of Self Insured Plans proposes to amend sections 15201, 15210, 15210.1, 15475, 15477, 15481, 15484, 15496 and 15497 and to adopt new section 15209 of Subchapter 2, Chapter 8, Division 1, Title 8, California Code of Regulations to implement amendments to the California Labor Code regarding the administration of Self Insurance Plans pursuant to SB 863 These regulations were amended and adopted on an emergency basis effective January 1, 2013, and are currently in effect in a substantially similar form to these final proposed regulations.

Labor Code section 3700 requires every employer in California, except the State, to secure the payment of workers’ compensation either by being insured against liability to pay compensation by one or more insurers duly authorized to write workers’ compensation insurance in this state, or by securing from the Department of Industrial Relations a certificate of consent to self-insure.

Among other things, SB 863, which took effect on January 1, 2013, amended Labor Code section 3701 to change the manner in which security deposits are calculated. Section 3701, subdivision (c), as amended, requires that the calculation of a self-insurer’s projected losses and expenses upon which the security deposit is based “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.”

The regulations proposed in this rulemaking action would permanently: define the content of the annual actuarial reports required by Labor Code section 3701, subdivision (c); prescribe the qualifications for the actuaries who may prepare those required annual actuarial reports; and bring the requirements for self-insurers’ security deposits into conformity with Labor Code section 3701, subdivision (c) as amended by SB 863.

Any interested person may submit written comments relevant to the proposed regulatory action to the Department. Submit comments to Jon Wroten, Chief
Office of Self Insurance Plans, 2265 Watt Avenue, Suite 1, Sacramento, CA 95825. The written comment period closes at 5:00 p.m. on Monday, June 10, 2013.