text:
Each member of an organization insured under a group policy shall be treated as a single and separate entity as respects rates, classifications and rating plans.

Two or more policies whose experience is combined for any purpose whatsoever, shall be considered group insurance and subject to the provisions of this article unless employers insured by such policies are engaged in operations having a common pay roll or where any rating plan or rating system and the rules applicable to them approved by the commissioner under the provisions of Article 2, Chapter 3, Part 3, Division 2, require or permit the insurance of more than one employer in a single policy.

history: (History: Added by Stats. 1953, Ch. 889.)

article: 2. Policy Provisions


kind: section

code: INS

text: Nothing in Section 11656.6 or 11656.7 shall be construed to supersede, modify, or otherwise affect in any way the provisions of Section 11656.5.

division: 2. CLASSES OF INSURANCE

chapter: 2. Workers’ Compensation Policies

article: 2. Policy Provisions

path: 2. CLASSES OF INSURANCE > 3. LIABILITY, WORKERS' COMPENSATION, AND COMMON CARRIER LIABILITY INSURANCE > 2. Workers’ Compensation Policies > 2. Policy Provisions


text: To encourage and facilitate the participation of agencies, entities or institutions, public or private, in economic opportunity programs authorized under Public Law 88-452, insurers may insure the workers’ compensation liability to enrollees of sponsoring agencies pursuant to Chapter 9 (commencing with Section 4201) of Part 1 of Division 4 of the Labor Code under a master policy, subject to the approval of the Insurance Commissioner.

history: (History: Amended by Stats. 1981, Ch. 714, Sec. 277.)

part: 3. LIABILITY, WORKERS' COMPENSATION, AND COMMON CARRIER LIABILITY INSURANCE

article: 2. Policy Provisions


text: Subject to the provisions of Sections 11659 and 11660, limited workers’ compensation policies may be issued insuring either the whole or any part of the liability of any employer for compensation, provided that the policy is previously approved, as to substance and form, by the commissioner. Subject to those provisions, the policy may restrict or limit the insurance in any manner whatsoever.

history: (History: Amended by Stats. 1995, Ch. 582, Sec. 1. Effective January 1, 1996.)

article: 2. Policy Provisions


text:
(a) A workers’ compensation insurance policy or endorsement shall not be issued by an insurer to any person in this state unless the insurer files a copy of the form or endorsement with the rating organization pursuant to subdivision (e) of Section 11750.3 and 30 days have expired from the date the form or endorsement is received by the commissioner from the rating organization without notice from the commissioner, unless the commissioner gives written approval of the form or endorsement prior to that time.

(b) If the commissioner notifies the insurer that the filed form or endorsement does not comply with the requirements of law, specifying the reasons for his or her opinion, it is unlawful for the insurer to issue any policy or endorsement in that form.

(c) The withdrawal of a policy form or endorsement by the commissioner pursuant to this section shall not affect the status of the policyholder as having secured payment for compensation or affect the substitution of the insurer for the policyholder in workers’ compensation proceedings as set forth in the provisions of Chapter 4 (commencing with Section 3700) of Part 1 of Division 4 of the Labor Code during the period of time in which the policy form or endorsement was in effect.

(d) This section shall not apply to limited policies submitted for approval to the commissioner pursuant to Section 11657.

history: (History: Repealed and added by Stats. 1995, Ch. 582, Sec. 3. Effective January 1, 1996.)

article: 2. Policy Provisions


text:
(a) (1) An insurer that intends to use a dispute resolution or arbitration agreement to resolve disputes arising in California out of a workers’ compensation insurance policy or endorsement issued to a California employer shall disclose to the employer, contemporaneously with any written quote that offers to provide insurance coverage, that choice of law and choice of venue or forum may be a jurisdiction other than California and that these terms are negotiable between the insurer and the employer. The disclosure shall be signed by the employer as evidence of receipt where the employer accepts the offer of coverage from that insurer.

(2) After compliance with paragraph (1), a dispute resolution or arbitration agreement may be negotiated by the insurer and the employer before any dispute arises.

(b) Nothing in this section is intended to interfere with any authority granted to the Insurance Commissioner under current law.

(c) Failure by the insurer to observe the requirements of subdivision (a) shall result in a default to California as the choice of law and forum for resolution of disputes arising in California.

(d) For purposes of this section, a “California employer” means an employer whose principal place of business is in California and whose California payroll constitutes the majority of the employer’s payroll for purposes of determining premium under the policy.

(e) This section shall apply to workers’ compensation policies issued or renewed on or after July 1, 2012.

history: (History: Added by Stats. 2011, Ch. 566, Sec. 2. (SB 684) Effective January 1, 2012.)

article: 2. Policy Provisions


text: Such approved form of policy, limited pursuant to Section 11657, shall not be otherwise limited except by indorsement thereon in accordance with a form prescribed by the commissioner or in accordance with rules adopted by the commissioner. Such indorsement form shall not be subject to Section 11658. Before prescribing such indorsement form or adopting such rule, the commissioner shall consult concerning it with the Workers’ Compensation Appeals Board.

history: (History: Amended by Stats. 1980, Ch. 575, Sec. 1.)

article: 2. Policy Provisions


text: Failure to observe the requirements of Sections 11657 and 11659 shall render a policy issued under Section 11657, and not complying therewith, unlimited.

history: (History: Amended by Stats. 1995, Ch. 582, Sec. 4. Effective January 1, 1996.)

article: 2. Policy Provisions


text: An insurer shall not insure against the liability of the employer for the additional compensation recoverable for serious and willful misconduct of the employer or his agent. An insurer may, however, provide insurance against the expense of defending any suit for serious and willful misconduct against an employer or his agent.

history: (History: Amended by Stats. 1969, Ch. 1062.)

article: 2. Policy Provisions


text: An insurer shall not insure an employer against his liability for additional compensation arising out of injuries to illegally employed persons under 16 years of age, as provided for by Part 4 (commencing with Section 1171) of Division 2 of the Labor Code.

history: (History: Amended by Stats. 1967, Ch. 689.)

article: 2. Policy Provisions


text:
(a) An insurer shall not insure an employer against his or her obligation to reimburse the insurer for the amount of increase in indemnity payment as provided for by subdivision (e) of Section 4650 of the Labor Code. Every contract insuring against liability for compensation and every compensation policy shall provide that the insured employer is obligated to reimburse the insurer for the amount of increase in indemnity payment required by Section 4650 of the Labor Code, if the late indemnity payment which gives rise to the increase in the amount of payment is due less than seven days after the insurer receives the completed claim form from the employer.

(b) An insurer shall not report the amount of any increase in indemnity required by Section 4650 of the Labor Code as incurred indemnity to the Insurance Commissioner’s designated statistical agent.

history: (History: Added by Stats. 1990, Ch. 1550, Sec. 1.)

article: 2. Policy Provisions


text:
Whenever any employer is insured against liability for compensation with any insurer, such insurer is subrogated to the rights of the employer to recover losses arising out of any of the following acts by the insurer:

(a) Assuming the liability of the employer for compensation in the manner provided by the law relating thereto.

(b) Payment of any compensation for which the employer is liable.

Such insurer may enforce any such subrogated rights in its own name.

history: (History: Enacted by Stats. 1935, Ch. 145.)

article: 2. Policy Provisions


text: As between insurers of general and special employers, one which insures the liability of the general employer is liable for the entire cost of compensation payable on account of injury occurring in the course of and arising out of general and special employments unless the special employer had the employee on his or her payroll at the time of injury, in which case the insurer of the special employer is solely liable. For the purposes of this section, a self-insured or lawfully uninsured employer is deemed and treated as an insurer of his or her workers’ compensation liability.

history: (History: Amended by Stats. 1981, Ch. 714, Sec. 279.)

article: 2. Policy Provisions


text:
(a) Upon receiving a written request from an insured or the agent or broker of record where authorized by the insured, an insurer shall provide a premium and loss history report to the requesting party for the account’s tenure or the three-year period ending with the inception of the current policy period, whichever is shorter, plus loss experience during the current policy period that is in force if any of the following occur.

(1) The policy is canceled or nonrenewed.

(2) The policyholder requests the information within 60 days prior to the renewal date of an existing policy.

(3) The policyholder’s current insurer’s rating is downrated by a nationally recognized insurance rating service to a financial rating below secure or good or to a rating that would negatively impact the ability of the policyholder to conduct its business operations.

(4) The policyholder’s current insurer is conserved by the department under Section 1011, or is ordered to cease writing business under Sections 1065.1 and 1065.2.

The premium and loss history report, and the loss experience information for the current policy period, shall be provided within 10 business days of receiving the request.

(b) This section applies only to workers’ compensation insurance.

(c) This section shall not apply to a policyholder who, through automated or other means, is provided direct, ongoing access to claims information by the insurer.

(d) For purposes of this section, a loss history report includes, but is not limited to, a list of individual claims detailed by date of claim and total incurred and paid losses.

history: (History: Added by Stats. 2001, Ch. 102, Sec. 3. Effective January 1, 2002.)

article: 2. Policy Provisions


text:
(a) This section applies only to policies of workers’ compensation insurance.

(b) A notice of nonrenewal shall be in writing and shall be delivered or mailed to the producer of record and to the named insured at the mailing address shown on the policy. The time periods and procedures in subdivision (a) of Section 1013 of the Code of Civil Procedure shall be applicable if the notice is mailed.

(c) An insurer, at least 30 days, but not more than 120 days, in advance of the end of the policy period, shall give notice of nonrenewal, and the reasons for the nonrenewal, if the insurer intends not to renew the policy.

(d) If an insurer fails to give timely notice required by subdivision (c), the policy of insurance shall be continued, with no change in its premium rate, for a period of 60 days after the insurer gives the notice.

(e) A notice of nonrenewal shall not be required in any of the following situations.

(1) The transfer of, or renewal of, a policy without a change in its terms or conditions or the rate on which the premium is based between insurers that are members of the same insurance group.

(2) The policy has been extended for 90 days or less, if the notice required in subdivision (c) has been given prior to the extension.

(3) The named insured has obtained replacement coverage or has agreed, in writing, within 60 days of the termination of the policy, to obtain that coverage.

(4) The policy is for a period of no more than 60 days and the insured is notified at the time of issuance that it may not be renewed.

(5) The named insured requests a change in the terms or conditions or risks covered by the policy within 60 days prior to the end of the policy period.

(6) The insurer has made a written offer to the insured to renew the policy at a premium rate increase of less than 25 percent.

(A) If the premium rate in the governing classification for the insured is to be increased 25 percent or greater and the insurer intends to renew the policy, the insurer shall provide a written notice of a renewal offer not less than 30 days prior to the policy renewal date. The governing classification shall be determined by the rules and regulations established in accordance with subdivision (c) of Section 11750.3.

(B) For purposes of this section, “premium rate” means the cost of insurance per unit of exposure prior to the application of individual risk variations based on loss or expense considerations such as scheduled rating and experience rating.

history: (History: Amended by Stats. 2022, Ch. 424, Sec. 28. (SB 1242) Effective January 1, 2023.)

article: 2. Policy Provisions


text:
(a) An insurer who issues a workers’ compensation insurance policy to a roofing contractor holding a C-39 license from the Contractors’ State License Board shall perform an annual payroll audit for the contractor. This audit shall include an in-person visit to the place of business of the roofing contractor to verify whether the number of employees reported by the contractor is accurate. The insurer may impose a surcharge on each policyholder audited under this subdivision in an amount necessary to recoup the reasonable costs of conducting the annual payroll audits.

(b) The commissioner shall direct the rating organization designated as his or her statistical agent to compile pertinent statistical data on those holding C-39 licenses, as reported by the appropriate state entity, on an annual basis and provide a report to him or her each year. The data shall track the total annual payroll and loss data reported on those holding C-39 licenses in accordance with the standard workers’ compensation insurance classifications applicable to roofing operations. The data shall include the number of employers, total payroll, total losses, and the losses per one hundred dollars ($100) of payroll by the employers’ annual payroll intervals as follows:

1 to4,9995,000 to9,99910,000 to14,99915,000 to19,99920,000 to24,99925,000 to29,99930,000 to39,99940,000 to49,99950,000 to74,99975,000 to99,999100,000 to199,999200,000 to299,999300,000 to399,999400,000 to499,999500,000 to599,999600,000 to699,999700,000 to799,999800,000 to899,999900,000 to999,9991,000,000 to1,099,9991,100,000 to1,199,9991,200,000 to1,299,9991,300,000 to1,399,9991,400,000 to1,499,9991,500,000 or more

The report shall also be provided to the Legislature by the commissioner, in compliance with Section 9795 of the Government Code.

history: (History: Amended by Stats. 2013, Ch. 76, Sec. 140. (AB 383) Effective January 1, 2014.)

article: 2. Policy Provisions


text:
For purposes of this article:

(a) “Compensable workers’ compensation claim” means a claim where the claimant is entitled to benefits under the workers’ compensation law of the state.

(b) “Delinquency proceeding” means any proceeding commenced against an insurer for the purpose of liquidating, rehabilitating, reorganizing, or conserving that insurer, where there has not been a court order finding the insurer insolvent.

(c) “Receiver” means liquidator, rehabilitator, or conservator, as appropriate.

history: (History: Repealed and added by Stats. 2002, Ch. 899, Sec. 2. Effective January 1, 2003.)

path: 2. CLASSES OF INSURANCE > 3. LIABILITY, WORKERS' COMPENSATION, AND COMMON CARRIER LIABILITY INSURANCE > 3. Regulation of Business of Workers’ Compensation Insurance > 1. Deposits by Workers’ Compensation Insurers


text:
(a) (1) In order to provide protection to the workers of this state in the event that the insurers issuing workers’ compensation insurance to employers fail to pay compensable workers’ compensation claims when due, except in the case of the State Compensation Insurance Fund, every insurer desiring admission to transact workers’ compensation insurance, or workers’ compensation reinsurance business, or desiring to reinsure the injury, disablement, or death portions of policies of workers’ compensation insurance under the class of disability insurance shall, as a prerequisite to admission, or ability to reinsure the injury, disablement, or death portion of policies of workers’ compensation insurance under the class of disability insurance, deposit cash instruments or approved interest-bearing securities or approved stocks readily convertible into cash, investment certificates, or share accounts issued by a savings and loan association doing business in this state and insured by the Federal Deposit Insurance Corporation, certificates of deposit, or savings deposits in a bank licensed to do business in this state, or approved letters of credit that perform in material respects as any other security allowable as a form of deposit for purposes of a workers’ compensation deposit and that meet the standard set forth in Section 922.5, or approved securities registered with a qualified depository located in a reciprocal state as defined in Section 1104.9, with that deposit to be in an amount and subject to any exceptions as set forth in this article. The deposit shall be made from time to time as demanded by the commissioner and may be made with the Treasurer, or a bank or savings and loan association authorized to engage in the trust business pursuant to Division 1 (commencing with Section 99) or Division 2 (commencing with Section 5000) of the Financial Code, or a trust company. A deposit of securities registered with a qualified depository located in a reciprocal state as defined in Section 1104.9 may only be made in a bank or savings and loan association authorized to engage in the trust business pursuant to Division 1 (commencing with Section 99) or Division 2 (commencing with Section 5000) of the Financial Code, or a trust company, licensed to do business and located in this state that is either domiciled in and has a principal place of business in this state, or is a national bank association with a trust office located in this state, that is a qualified custodian as defined in paragraph (1) of subdivision (a) of Section 1104.9, and that maintains deposits of at least seven hundred fifty million dollars ($750,000,000). The deposit shall be made subject to the approval of the commissioner under those rules and regulations that he or she shall promulgate. The deposit shall be maintained at a deposit value specified by the commissioner, but in any event no less than one hundred thousand dollars ($100,000), nor less than the reserves required of the insurer to be maintained under any of the provisions of Article 1 (commencing with Section 11550) of Chapter 1, relating to loss reserves on workers’ compensation business of the insurer in this state, nor less than the sum of the amounts specified in subdivision (a) of Section 11693, whichever is greater. The deposit shall be for the purpose of paying compensable workers’ compensation claims under policies issued by the insurer or reinsured by the admitted reinsurer and expenses as provided in Section 11698.02, in the event the insurer or reinsurer fails to pay those claims when they come due. If the insurer providing the deposit is domiciled in a state where a state statute, regulation, or court decision provides that, with respect to covered claims within the deductible amount that are paid by a guarantee association after the entry of an order of liquidation under large deductible workers’ compensation policies, any part of the reimbursement proceeds, other than the reasonable expenses of the receiver related to treatment of deductible policy arrangements of insurance companies in liquidation, owed by insureds on those deductible amounts, whether paid directly or through a draw of collateral, are general assets of the estate, then the amount of the insurer’s deposit pursuant to this article shall be calculated based on the gross amount of that insurer’s liabilities for loss and loss adjustment expenses under those policies without regard to the deductible, and those reserves shall not be reduced by any collateral or reimbursement obligations insureds were required to provide under those policies.

(2) This section does not require that the deposit be calculated based on gross amounts of liabilities described above if the domiciliary state does not have an existing statute, regulation, or court decision providing that the reimbursement proceeds described above are general assets of the estate.

(b) Each insurer or reinsurer desiring to have the ability to reinsure the injury, disablement, or death portions of policies of workers’ compensation under the class of disability insurance shall provide prior notice to the commissioner, in the manner and form prescribed by the commissioner of its intent to reinsure that insurance. In the event of late notice, a late filing fee shall be imposed on the reinsurer pursuant to Section 924 for failure to notify the commissioner of its intent to reinsure workers’ compensation insurance.

(c) If the deposit required by this section is not made with the Treasurer, then the depositor shall execute a trust agreement in a form approved by the commissioner between the insurer, the institution in which the deposit is made or, where applicable, the qualified custodian of the deposit, and the commissioner, that grants to the commissioner the authority to withdraw the deposit as set forth in Sections 11691.2, 11696, 11698, and 11698.3. The insurer shall also execute and deliver in duplicate to the commissioner a power of attorney in favor of the commissioner for the purposes specified herein, supported by a resolution of the depositor’s board of directors. The power of attorney and director’s resolution shall be on forms approved by the commissioner, shall provide that the power of attorney cannot be revoked or withdrawn without the consent of the commissioner, and shall be acknowledged as required by law.

(d) (1) The commissioner shall require payment, in advance, of a fee of two hundred eighty-three dollars ($283) for the initial filing of a trust agreement with a bank, savings and loan association, or trust company on deposits made pursuant to subdivision (a); for each amendment, supplement, or other change to the deposit agreement; for receiving and processing deposit schedules pursuant to this section; and for each withdrawal, substitution, or any other change in the deposit.

(2) The commissioner shall require payment, in advance, of a fee of four hundred twenty-four dollars ($424) for the initial filing of each letter of credit utilized pursuant to subdivision (a). In addition, the commissioner shall require payment, in advance, of a fee of two hundred eighty-three dollars ($283) annually for each amendment of a letter of credit.

(e) Any workers’ compensation insurer that deposits cash or cash equivalents pursuant to this section shall be entitled to a prompt refund of those deposits in excess of the amount determined by the commissioner pursuant to subdivision (a). The commissioner shall cause to be refunded any deposits determined by the commissioner to be in excess of the amount required by subdivision (a) within 30 days of that determination. In the alternative, an insurer may use any excess deposit funds to offset a demand by the commissioner to increase its deposit due to the failure of a reinsurer to make a deposit pursuant to this section.

(f) (1) An admitted insurer reinsuring business covered in this article (hereafter referred to as reinsurer) shall identify to the commissioner, in a form prescribed by the commissioner, amounts deposited for credit in the name of each ceding insurer.

(2) All reinsurance agreements covering claims and obligations under business covered by this article, and allowable for purposes of granting a ceding carrier a deposit credit, shall include a provision granting the commissioner, in the event of a delinquency proceeding, receivership, or insolvency of a ceding insurer, any sums from a reinsurer’s deposit that are necessary for the commissioner to pay those reinsured claims and obligations, or to ensure their payment by the California Insurance Guarantee Association, deemed by the commissioner due under the reinsurance agreement, upon failure of the reinsurer for any reason to make payments under the policy of reinsurance. The commissioner shall give 30 days’ notice prior to drawing upon these funds of an intent to do so. Notwithstanding the commissioner’s right to draw on these funds, the reinsurer shall otherwise retain its right to determine the validity of those claims and obligations and to contest their payment under the reinsurance agreement. Prior to a reinsurer’s deposit being drawn upon, in whole or in part, by the department, the department shall provide a reinsurer with an explanation of procedures that a reinsurer may use to explain to the department why the use of the reinsurer’s deposit may not be appropriate under the reinsurance agreement.

(3) A reinsurer entering into a contract identified in paragraph (2), beginning on or after January 1, 2005, may not cede claims or obligations assumed from a ceding insurer unless the deposit securing the ceded claims or obligations is governed by paragraph (2) or, upon approval of the commissioner, would secure the ceded claims or obligations in all material respects and in the same manner as a deposit identified in paragraph (2) above.

(4) All sums received from the reinsurer by the commissioner for those claims paid by the California Insurance Guarantee Association shall be held separate and apart from and not included in the general assets of the insolvent insurer, and shall be transferred to the California Insurance Guarantee Association upon receipt by the commissioner. In the event of a final judgment or settlement adverse to the drawing of funds by the commissioner pursuant to paragraph (2) or (3), the California Insurance Guarantee Association shall repay funds it obtained to pay covered claims and shall, if necessary, either levy a surcharge as needed or seek legislative approval to levy the surcharge if the California Insurance Guarantee Association is already levying the maximum surcharge permissible under law.

(g) If a reinsurer has not maintained deposits as required by subdivision (a) in amounts equal to the amounts of deposit credits claimed by its ceding insurers, the commissioner, after notifying the reinsurer and its ceding insurers of the deposit shortfall and allowing 15 days from the date of the notice for the deposit shortfall to be corrected, may disallow all or a portion of the reserve credits claimed by the ceding insurers. A ceding insurer disallowed a reserve credit pursuant to this provision shall immediately make the deposit required by this section.

(h) For interest-bearing securities that are debt securities and include principal payment features prior to maturity that are utilized pursuant to subdivision (a), all principal payments received shall be retained as part of the deposit.

(i) Withdrawal of any amount of the deposit required under subdivision (a) that results in a reduction of the required amount of the deposit may only occur with the prior written consent of the commissioner.

history: (History: Amended by Stats. 2017, Ch. 534, Sec. 70. (AB 1699) Effective January 1, 2018.)

chapter: 3. Regulation of Business of Workers’ Compensation Insurance

article: 1. Deposits by Workers’ Compensation Insurers


text:
The fees for filing a schedule of securities with the Treasurer, and making a deposit of the same, and for each withdrawal, substitution, or any other change in the securities comprising this deposit with the Treasurer, shall be paid to the commissioner for the costs of review and approval of deposits, and shall be the same as are prescribed by Article 11 (commencing with Section 939) of Chapter 1 of Part 2 of Division 1.

All other reasonable charges made by the Treasurer for servicing securities deposited with him or her shall be paid to the Treasurer by the insurer that has deposited the security, and shall not be charged to the commissioner.

history: (History: Added by Stats. 2002, Ch. 899, Sec. 2. Effective January 1, 2003.)


text: The deposit required pursuant to Section 11691 shall be security for the payment of the insurer’s obligations on worker’s compensation insurance transacted in this state. The deposit shall not be withdrawn except upon the written order of the commissioner to use the proceeds thereof in payment of compensable worker’s compensation claims and expenses as provided in Section 11698.02, or as otherwise provided in this article, but shall be forthwith payable to the commissioner or at the direction of the commissioner by the Treasurer or the bank, savings and loan association, or trust company approved by the commissioner upon that order. No deposit so placed with a bank, savings and loan association, or trust company shall be subject to any lien or claim asserted by it or be subject to any disposition obligation, demand, liability, cause of action, judgment, or other claim, or cost or expense attendant thereon, other than as is permitted by the commissioner. Notwithstanding any other provisions of this code, the deposit shall be retained by the Treasurer or the bank, savings and loan association, or trust company approved by the commissioner and only released in accordance with the provisions of this article or pursuant to regulations or a written order of the commissioner.


text: The commissioner shall establish a list of all insurers or reinsurers authorized to reinsure the injury, disablement, or death portions of policies of workers’ compensation insurance under the class of disability insurance. An insurer or reinsurer shall be authorized to reinsure the injury, disablement, or death portions of policies of workers’ compensation insurance under the class of disability insurance if it has complied with Section 11691. The commissioner shall publish a master list of those insurers or reinsurers at least semiannually. Any insurer or reinsurer providing the notification and deposit required by Section 11691, shall be added by addendum to the list at the time of approval, and shall be incorporated into the master list at the next date of publication. The list and addenda required by this section shall be published so that they are readily accessible to insurers and producers. The list and addenda required by this section shall also contain a notice that if an insurer enters into a contract of reinsurance with an insurer or reinsurer reinsuring the injury, disablement, or death portions of policies of workers’ compensation insurance under the class of disability insurance that is not authorized pursuant to this section, the ceding insurer may not be able to claim that reinsurance for reserve credit.


text: A certificate of authority to transact workers’ compensation insurance in this state shall not be issued nor renewed to any insurer until the deposit required pursuant to Section 11691 is approved by the commissioner.

history: (History: Amended by Stats. 2005, Ch. 415, Sec. 7. Effective January 1, 2006.)


text:
On and after the effective date of this article, the commissioner shall collect a late filing fee from any admitted insurer or reinsurer that fails to deposit the securities when required by this code in the following amount:

(a) If the deposit shortfall is outstanding for less than 31 days, 0.5 percent of the deposit shortfall, but in no event not less than six hundred dollars ($600).

(b) If the deposit shortfall is outstanding for more than 30 days but less than 61 days, an additional late filing fee in the amount of 1 percent of the deposit shortfall, but in no event not less than one thousand two hundred dollars ($1,200) shall be due.

(c) If the deposit shortfall is outstanding for 61 days or greater, an additional late filing fee of 1.5 percent of the deposit shortfall for every 30-day period thereafter, or fraction thereof, but in no event shall this portion of the late filing fee for each additional 30-day period or fraction thereof be less than three thousand dollars ($3,000). The late filing fees provided herein are in addition to all other rights and remedies granted the commissioner by this article.

history: (History: Amended by Stats. 2005, Ch. 415, Sec. 8. Effective January 1, 2006.)


text:
The deposit required pursuant to Section 11691 shall be adjusted on or prior to March 31 of each year in an amount as follows:

(a) Not less than the sum of the following amounts computed, less credits and deductions allowable with respect to reinsurance in admitted insurers, as provided under Section 11691, as of the close of the last preceding December 31 or as of any calendar quarter end as directed by the commissioner pursuant to Section 11694 in respect to workers’ compensation insurance written subject to the workers’ compensation laws of this state:

(1) The aggregate of the present values at 6 percent interest, or at the rate of the company’s investment yield as determined by the NAIC Insurance Regulatory Information System Ratio Number 5 for Property and Casualty Companies, whichever is lower, of the determined and estimated future payments upon compensation claims not included in paragraph (2), including in those claims both benefits and loss expenses.

(2) The aggregate of the amounts computed as follows:

For each of the preceding three years, 65 percent of the earned compensation premiums for that year less all loss and loss expense payments made upon claims incurred in the corresponding year from that 65 percent; except that the amount for each year shall not be less than the present value at 6 percent interest of the determined and the estimated unpaid claims incurred in that year, including both benefits and loss expenses.

(b) Not less than one hundred thousand dollars ($100,000).

(c) If the aggregate amount computed under subdivision (a) exceeds fifty thousand dollars ($50,000), not more than double the aggregate amount.

(d) The commissioner may utilize securities valuation software programs or services to validate the value of securities held in workers’ compensation deposits of insurers authorized to transact workers’ compensation insurance in California as direct writers or reinsurers, or reinsurers of workers’ compensation under the class of disability.

history: (History: Amended by Stats. 2005, Ch. 415, Sec. 9. Effective January 1, 2006.)


text: After the first annual statement to the commissioner covering business of the insurer for a full year in this state, the deposit required pursuant to Section 11691 shall be computed from the figures shown in the last preceding report of business as of December 31, filed with the commissioner, and shall be reported to the commissioner on or before March 1 of each year in a form and manner prescribed by the commissioner. Notwithstanding anything to the contrary in this article, should the commissioner determine that there has been a material change in the insurer’s ultimate liability for future payments upon compensable workers’ compensation claims in this state, at the commissioner’s discretion, the amount of the deposit shall then be fixed by the commissioner at the amount that he or she deems sufficient to secure the payment of the insurer’s ultimate obligations on its workers’ compensation insurance transacted in this state, and upon notification from the commissioner the insurer shall immediately, but in no event less than 30 days after notification, increase the deposit as directed.

history: (History: Amended by Stats. 2005, Ch. 415, Sec. 10. Effective January 1, 2006.)


text: On or before March 1 and May 15 of each year, the insurers or reinsurers subject to Section 11694 shall file a report in the form and manner prescribed by the commissioner that valuates and details the deposit as of December 31 of the preceding year and March 31 of the current year. The commissioner may require additional reporting by any insurer or reinsurer when it is deemed necessary.

history: (History: Added by Stats. 2005, Ch. 415, Sec. 11. Effective January 1, 2006.)


text: Where an admitted insurer has voluntarily ceased to do in this state the business for which a deposit is required pursuant to Section 11691, the deposit shall be fixed by the commissioner at the amount that he or she deems sufficient for the protection of the beneficiaries of the policies of that insurer.


text: In the event an insurer not in a delinquency proceeding fails to pay any compensable workers’ compensation claim against it, or fails to pay, to the extent of its liability as a reinsurer, any compensable workers’ compensation claim covered by a policy wholly or partly reinsured by it, the commissioner shall use the proceeds of the deposit required pursuant to Section 11691 to pay all those compensable workers’ compensation claims and related expenses as described in Section 11698.02.


text: The payment of a workers’ compensation claim by the commissioner shall constitute a satisfaction of the claim to the extent of the payment made. In the event any judgment is entered on the claim, the commissioner shall file a proportionate satisfaction thereof in the office of the clerk of the court wherein the judgment is entered.


text:
(a) In the event any one of the eventualities described in paragraph (1), (2), (3), or (4), transpires, the commissioner shall immediately take control or possession of the deposit required pursuant to Section 11691 and may use the deposit to pay or procure the payment of those compensable workers’ compensation claims against the insurer, and those expenses described in Section 11698.02. The proceeds of the deposit shall in that event inure to the commissioner as a trust to be held separate and apart from all other assets of the insurer held by the commissioner. They shall be used only for the purposes set forth and in accordance with the procedures established in this article. Once it is determined that there are no remaining undischarged liabilities for compensable workers’ compensation claims or it is actuarially demonstrated that the deposit exceeds those liabilities, the commissioner shall transfer the remaining amount of the deposit to the general assets of the estate.

(1) If the commissioner is named conservator of that insurer pursuant to Article 14 (commencing with Section 1011) of Chapter 1 of Part 2 of Division 1.

(2) The proper court has appointed the commissioner ancillary receiver of the insurer or reinsurer.

(3) A delinquency proceeding has been instituted by the proper court against the insurer or reinsurer.

(4) If it appears to the commissioner that any of the conditions set forth in Section 1011 exist or that irreparable loss and injury to the property and business of the insurer or reinsurer has occurred or may occur unless the commissioner acts immediately without notice and before applying to the court for any order.

(b) If the commissioner has proceeded under subdivision (a) or Section 11696 or 11698.3 and a deposit of securities registered with a qualified depository located in a reciprocal state and in the custody of a qualified custodian pursuant to Section 1104.9 cannot be released to the commissioner according to the terms of the agreement entered into pursuant to Section 11691 or the requirements of Section 11691.2 because of a delinquency proceeding initiated in the reciprocal state in which the qualified depository is located, or, if the deposit of securities registered with a qualified depository has been executed upon at any time by any creditor of an insurer and that execution has been affirmed by a written opinion of a court of competent federal appellate jurisdiction, the commissioner may, after a public hearing and upon a finding that deposits of securities registered with that depository do not allow the commissioner to discharge his or her responsibilities as set forth in this chapter, require workers’ compensation insurers authorized to transact insurance in this state to cease and desist making any further deposits authorized by Section 11691 in approved securities registered with that depository. For the purposes of this subdivision, the term “delinquency proceeding” shall have the same meaning as contained in subdivision (b) of Section 1064.1.


text:
When the commissioner is authorized to proceed under Section 11698 he or she may do either of the following:

(a) Subject to Sections 11698.2, 11698.21, and 11698.22, enter into reinsurance and assumption agreements with one or more admitted solvent workers’ compensation insurers by the terms of which liability for all those obligations is reinsured and assumed by such insurer.

(b) Use the deposit required pursuant to Section 11691 to pay or procure payment of the insurer’s compensable workers’ compensation claims and those expenses authorized in Section 11698.02.


text:
From time to time and in any event at or prior to the time of the filing of his or her petition for discharge as receiver, the commissioner shall do the following:

(a) File with the Workers’ Compensation Appeals Board an accounting of all trust funds received and used from the proceeds of the deposit required pursuant to Section 11691.

(b) File with the court an accounting of all funds received and used as expenses from the general funds of the insurer.


text: The proceeds of the deposit required pursuant to Section 11691 shall be used solely to pay compensable workers’ compensation claims under the insured or reinsured policies, allocated claims expense necessary to pay those claims, and the expenses connected with all proceedings or actions permitted or required by this article in furtherance of the payment of those claims, or should the commissioner pursuant to subdivision (a) of Section 11698.01 enter into reinsurance and assumption agreements with one or more reinsurers, the proceeds of the deposit shall be used to reimburse those reinsurers.


text:
If the commissioner enters into a reinsurance and assumption agreement as provided in subdivision (a) of Section 11698.01, that agreement shall provide for all of the following:

(a) The reinsurance and assumption of all those obligations by the reinsuring and assuming insurers.

(b) If there is more than one reinsurer the proportion of all those obligations assumed by each reinsurer and a method for the actual processing and payment of those obligations by the reinsurers or their representatives.

(c) The reimbursement of the reinsuring and assuming insurers from the deposit of the insurer in the delinquency proceeding. The provision shall conform with Section 11698.21 and shall not be effective unless approved by the Workers’ Compensation Appeals Board.

(d) The amounts, if any, to be paid the reinsurers from the general funds of the insurer. If the agreement provides that amounts from the general funds of the insurer are to be paid to the reinsurers, those payments shall be approved by the court where the delinquency proceedings are pending.

(e) Any other matters as are necessary and proper to achieve the purposes of the reinsurance and assumption agreement.


text:
(a) If the insurer is a member insurer of the California Insurance Guarantee Association (the association) and has been the subject of an order of liquidation or receivership with a finding of insolvency which has been entered by a court of competent jurisdiction the association then becomes obligated to pay compensable workers’ compensation claims arising under the insurer’s policies, which are otherwise “covered claims” as defined in Article 14.2 (commencing with Section 1063) of Chapter 1 of Part 2 of Division 2. The commissioner shall immediately take control or possession of the deposit required pursuant to Section 11691 and shall transfer the deposit to the association.

(b) The association shall use the proceeds of the deposit and any interest earned thereon, for the payment of compensable workers’ compensation claims arising under the insolvent insurer’s policies and which are otherwise covered claims, as defined in Article 14.2 (commencing with Section 1063) of Chapter 1 of Part 2 of Division 2, and all expenses related thereto.

(c) The association shall make a full report and accounting of the disposition of the deposit on or in the form and at the times as the commissioner shall request, including a report of all interest income earned on the deposit.

(d) At the time all of the insolvent insurer’s California workers’ compensation claims liabilities are discharged, or at the time it is actuarially determined that the remaining proceeds, and any interest earned thereon, exceed those liabilities, the association shall return the surplus to the insolvent insurer’s estate.


text:
(a) The reimbursement provision referred to in subdivision (c) of Section 11698.2 shall provide for the transfer of the securities in the deposit to the deposits of the reinsurers. Thereafter, except as provided in subdivision (b), the deposit of the reinsuring and assuming insurers shall be security for the payment of all of those obligations assumed by the agreement as well as those obligations on workers’ compensation insurance transacted in this state by the reinsurer, provided, however, that in determining the amount which shall remain on deposit as security for those obligations that are reinsured and assumed, the method prescribed by paragraph (1) of subdivision (a) of Section 11693 shall be used without any limitation as to time. In providing for the transfer of the securities the agreement may provide for their direct transfer to the deposit account of the reinsurers, or, if the securities deposited are in denominations or units as to make the equitable transfer to more than one reinsurer impossible, it may provide either for a formula under which the transfers may be made and differences in value reconciled by payments or credits among the reinsurers or for the sale of those securities by the commissioner and the reinvestment of the proceeds in other securities in amounts that can be so equitably transferred.

(b) The agreement shall provide that if it appears that the market value of the securities on deposit will exceed the obligations assumed by the reinsurers, the commissioner may withhold the transfer of a portion of the deposit and may after a two-year period enter into a final settlement with the reinsurers with respect thereto at which time any excess in that deposit shall be transferred to the general assets of the insurer in the delinquency proceeding.


text: The commissioner shall not enter into an agreement with an insurer if its reinsurance and assumption of liability will impair its solvency or render its further transaction of business hazardous under subdivision (d) of Section 1011.


text: Unless the deposit required pursuant to Section 11691 is withdrawn by the commissioner pursuant to the authority granted him or her by this article, it, or any remainder thereof, may be repaid to the insurer either upon satisfactory showing to the commissioner that every liability to pay compensable workers’ compensation claims has been assumed and reinsured with a solvent admitted insurer or fully paid and discharged. In the event the insurer remains admitted for workers’ compensation insurance, or desires to reinsure the injury, disablement, or death portions of policies of workers’ compensation under the class of disability insurance, then it must maintain at least the minimum deposit required by Section 11691.


text: The deposit required pursuant to Section 11691, unless withdrawn by the commissioner, shall be used only for the payment of compensable workers’ compensation claims and expenses as provided in Section 11698.02 as long as there remains unpaid any claim or any part thereof.


text: The commissioner may revoke the certificate of authority to transact workers’ compensation insurance or to reinsure the injury, disablement, or death portions of policies of workers’ compensation under the class of disability insurance in this state of any insurer failing to comply with the requirements of this article. The power vested in the commissioner by this section is additional to any and all other powers and remedies vested in the commissioner by law. Failure to make the deposit required by this article within the required time shall be deemed to constitute a condition of hazard as set forth in Section 1011.


text: The provisions of this article shall not apply to workers’ compensation insurance covering those persons defined as employees by subdivision (d) of Section 3351 of the Labor Code.


text: An insurer desiring to write workers’ compensation insurance shall maintain or provide occupational safety and health loss control consultation services pursuant to Section 6354.5 of the Labor Code.

history: (History: Amended by Stats. 2003, Ch. 13, Sec. 3. Effective May 28, 2003.)


text:
The following definitions govern the construction and meaning of the terms used in this article:

(a) “Classification system” or “classification” means a plan, system, or arrangement for recognizing differences in exposure to hazards among industries, occupations, or operations of insurance policyholders.

(b) “Expenses” means that portion of any rate attributable to acquisition, field supervision, collection expenses, general expenses, taxes, licenses, and fees.

(c) “Experience rating” means a rating procedure utilizing past insurance experience of the individual policyholder to forecast future losses by measuring the policyholder’s loss experience against the loss experience of policyholders in the same classification to produce a prospective premium credit, debit, or unity modification.

(d) “Loss trending” means any procedure for projecting developed losses to the average date of loss for the period during which the policies are to be effective.

(e) “Market” means the interaction between buyers and sellers of workers’ compensation insurance within this state pursuant to the provisions of this article.

(f) “Pure premium rate” means that portion of the rate which represents the loss cost per unit of exposure, including loss adjustment expense.

(g) “Rate” means the cost of insurance per exposure base unit, prior to any application of individual risk variations based on loss or expenses considerations and does not include minimum premiums.

(h) “Rating organization” means an entity licensed by the commissioner pursuant to Section 11751.1.

(i) “Statistical plan” means the plan, system, or arrangement used in collecting data.

(j) “Supplementary rate information” means any manual or plan of rates, classification system, rating schedule, minimum premium, policy fee, rating rule, rating plan, and any other similar information needed to determine the applicable premium for an insured.

(k) “Supporting information” means the experience and judgment of the filer and the experience or data of other insurers or organizations relied on by the filer, the interpretation of any statistical data relied on by the filer, descriptions of methods used in making the rates, and any other similar information required to be filed by the commissioner.

history: (History: Amended (as added by Stats. 1993, Ch. 228) by Stats. 1993, Ch. 1242, Sec. 3. Effective January 1, 1994. Addition and amendment operative January 1, 1995, pursuant to Stats. 1993, Ch. 228, Sec. 7, as amended by Sec. 43 of Ch. 1242.)

article: 2. State Rate Supervision

path: 2. CLASSES OF INSURANCE > 3. LIABILITY, WORKERS' COMPENSATION, AND COMMON CARRIER LIABILITY INSURANCE > 3. Regulation of Business of Workers’ Compensation Insurance > 2. State Rate Supervision


text: This article applies to workers’ compensation insurance and employers’ liability insurance written in connection therewith.

history: (History: Repealed and added by Stats. 1993, Ch. 228, Sec. 2. Effective January 1, 1994. Operative January 1, 1995, by Sec. 7 of Ch. 228, as amended by Stats. 1993, Ch. 1242.)

article: 2. State Rate Supervision


text: Rates shall be adequate to cover an insurer’s losses and expenses. Rates shall not tend to create a monopoly in the market. For the purpose of this section, the rates of any individual insurer, other than the State Compensation Insurance Fund, are presumed to create a monopoly in the market if the insurer has a market share, based on a percentage of statewide workers’ compensation premium, equivalent to 20 percent or more of the premium written by all insurers other than the State Compensation Insurance Fund.

history: (History: Amended by Stats. 2002, Ch. 873, Sec. 2. Effective January 1, 2003.)

article: 2. State Rate Supervision


text: Rates shall not be unfairly discriminatory. Rates are unfairly discriminatory if, after allowing for practical limitations, price differentials fail to reflect equitably the difference in expected losses and expenses. A rate of an insurer shall not be deemed unfairly discriminatory because different premiums result for policyholders with like loss exposures but different expenses, or like expenses but different loss exposures, as long as the rate reflects the differences with reasonable accuracy.

history: (History: Added by Stats. 1994, Ch. 732, Sec. 1. Effective January 1, 1995.)

article: 2. State Rate Supervision


text:
In determining whether rates comply with Section 11732, the following criteria shall apply:

(a) Due consideration may be given to past and prospective loss and expenses experience within this state, to catastrophe hazards and contingencies, to events or trends within this state, to loadings for leveling premium rates over time or for dividends or savings to be allowed or returned by insurers to their policyholders, members or subscribers, and to all other relevant factors, including judgment.

(b) The expense provisions included in the rates to be used by an insurer shall reflect the operating methods of the insurer and, so far as is credible, its own actual and anticipated expense experience.

(c) The rates may contain a provision for contingencies and an allowance permitting a reasonable profit. In determining the reasonableness of profit, consideration shall be given to all investment income attributable to premiums and the reserves associated with those premiums.

history: (History: Amended by Stats. 2002, Ch. 873, Sec. 3. Effective January 1, 2003.)

article: 2. State Rate Supervision


text:
(a) Every workers’ compensation insurer shall adhere to a uniform experience rating plan filed with the commissioner by a rating organization designated by the commissioner and subject to his or her disapproval.

(b) The commissioner shall designate a rating organization to assist him or her in gathering, compiling, and reporting relevant statistical information, and to develop a classification system. An insurer may develop its own classification system upon which a rate may be made or adopt the classification system developed by the designated rating organization; provided, however, that any classification system developed by an insurer must be filed with the commissioner 30 days prior to its use. The commissioner shall disapprove a classification system filed by an insurer pursuant to this section if the insurer fails to demonstrate that the data thereby produced can be reported consistent with the uniform statistical plan or the classification system developed by the rating organization. Every workers’ compensation insurer shall record and report its workers’ compensation experience to the designated rating organization as set forth in the uniform statistical plan approved by the commissioner.

(c) The designated rating organization shall develop and file manual rules, subject to the approval of the commissioner, reasonably related to the recording and reporting of data pursuant to the uniform statistical plan, uniform experience rating plan, and any classification systems that may be in effect. Every workers’ compensation insurer shall adhere to the approved manual rules and experience rating plan in writing and reporting its business. No insurer shall agree with any other insurer or with a rating organization to adhere to manual rules that are not reasonably related to the recording and reporting of data pursuant to the uniform statistical plan or classification system developed by the rating organization.

(d) The designated rating organization shall also develop and file with the commissioner a weekly premium per employee for each classification used or proposed for use by that organization. The weekly premium shall be developed by applying the proposed rate for each classification to the state average weekly wage. For the purpose of this section, “state average weekly wage” means the average weekly wage paid by employers to employees covered by unemployment insurance as reported by the United States Department of Labor for California for the 12 months ending March 31 of the calendar year preceding the year in which the injury occurred.

history: (History: Amended by Stats. 2002, Ch. 6, Sec. 5. Effective January 1, 2003.)

article: 2. State Rate Supervision


text:
(a) Every insurer shall file with the commissioner all rates and supplementary rate information that are to be used in this state. The rates and supplementary rate information shall be filed not later than 30 days prior to the effective date. Upon application by the filer, the commissioner may authorize an earlier effective date. To the extent possible, rates and supplementary rate information shall be based upon supporting information derived from the experience or data of the insurer, rating organization, advisory organization, or other insurers. For the purposes of this subdivision, “rating organization” shall have the same meaning as set forth in subdivision (b) of Section 11750.1, and “advisory organization” shall have the same meaning as set forth in subdivision (e) of that section.

(b) Rates filed pursuant to this section shall be filed in the form and manner prescribed by the commissioner. All rates, supplementary rate information, and any supporting information for rates filed under this article, as soon as filed, shall be open to public inspection at any reasonable time. Copies may be obtained by any person upon request and the payment of a reasonable charge.

(c) Upon the written application of the insurer and insured, stating its reasons therefor, filed with the commissioner, a rate in excess of that provided by a filing otherwise applicable may be used on any specific risk.

(d) Notwithstanding Section 679.70, no rating organization may issue, nor may any insurer use, any classification system or rate, as applied or used, that violates Section 679.71 or 679.72 or that violates the Unruh Civil Rights Act.

(e) Notwithstanding Sections 11657 to 11660, inclusive, supplementary rate information filed with the commissioner for purposes of offering deductibles to policyholders for all or part of benefits payable under the policy shall be deemed complete if the filing contains all of the following:

(1) A copy of the deductible endorsement that is to be attached to the policy to effectuate deductible coverage.

(2) Endorsement language that protects the rights of injured workers and ensures that benefits are paid by the insurer without regard to any deductible. The endorsement shall specify that the nonpayment of deductible amounts by the policyholder shall not relieve the insurer from the payment of compensation for injuries sustained by the employee during the period of time the endorsed policy was in effect. The endorsement shall provide that deductible policies for workers’ compensation insurance coverage shall not be terminated retroactively for the nonpayment of deductible amounts.

(3) The endorsement shall provide that notwithstanding the deductible, the insurer shall pay all of the obligations of the employer for workers’ compensation benefits for injuries occurring during the policy period. Payment by the insurer of any amounts within the deductible shall be treated as an advancement of funds by the insurer to the employer and shall create a legal obligation for reimbursements, and may be secured by appropriate security.

(4) The endorsement shall specify whether loss adjustment expenses are to be treated as advancements within the deductible to be reimbursed by the employer.

(5) An explanation of premium reductions reflecting the type and level of the deductible shall be clearly set forth for the policyholder.

(6) The filing shall provide that premium reductions for deductibles are determined before application of any experience modification, premium surcharge, or premium discount, and the premium reductions reflect the type and level of deductible consistent with accepted actuarial standards.

(7) The filing shall provide that the nonpayment of deductible amounts by the insured employer to its insurer, or the failure to comply with any security-related terms of the policy, shall be treated under the policy in the same manner as the payment or nonpayment of the premium pursuant to paragraph (1) of subdivision (b) of Section 676.8.

(f) The insurer shall report and record losses subject to the deductible as losses for purposes of ratemaking and application of an experience rating plan on the same basis as losses under policies providing first dollar coverage.

history: (History: Amended by Stats. 2002, Ch. 873, Sec. 4. Effective January 1, 2003.)

article: 2. State Rate Supervision


text: An experience rating plan shall contain reasonable eligibility standards, provide adequate incentives for loss prevention, and shall provide for sufficient premium differentials so as to encourage safety.

history: (History: Amended by Stats. 1997, Ch. 748, Sec. 2. Effective January 1, 1998.)

article: 2. State Rate Supervision


text:
(a) The commissioner shall establish, by regulation, those forms of collateral or security that an insurer may designate to secure the deductible amount of any policy of workers’ compensation insurance and the establishment of reserves and recognition of receivables for insurers writing workers’ compensation deductible policies.

The commissioner, by order, exempt from the requirements of the Administrative Procedure Act, shall establish those forms of security or collateral that the insurer may designate to secure the deductible amount of any policy of workers’ compensation insurance that provides for a deductible and the establishment of reserves and recognition of receivables for insurers writing workers’ compensation deductible policies. This authority shall expire if regulations required by subdivision (a) are not drafted and filed with the Office of Administrative Law by December 31, 1995; if the regulations are filed with the Office of Administrative Law by December 31, 1995, this authority shall expire December 31, 1996, or upon filing of the regulations with the Secretary of State, whichever is earlier.

history: (History: Added by Stats. 1994, Ch. 1131, Sec. 2. Effective January 1, 1995.)

article: 2. State Rate Supervision


text:
(a) The commissioner may disapprove a rate if the insurer fails to comply with the filing requirements under Section 11735.

(b) The commissioner may disapprove rates if the commissioner determines that premiums charged, in the aggregate, resulting from the use of the rates or the rates as modified by any supplementary rate information, would be inadequate to cover an insurer’s losses and expenses, unfairly discriminatory, or tend to create a monopoly in the market pursuant to Section 11732, 11732.5, or 11733.

(c) The commissioner shall disapprove rates if the commissioner determines that premiums charged, in the aggregate, resulting from the use of the rates or the rates as modified by any supplementary rate information would, if continued in use, tend to impair or threaten the solvency of an insurer. In determining whether the premium charged in the aggregate would, if continued in use, tend to impair or threaten the solvency of the insurer, the commissioner shall consider the insurer’s experience in other states.

(d) If the commissioner intends to disapprove rates pursuant to subdivision (a) or (b), the commissioner shall serve notice on the insurer of the intent to disapprove and shall schedule a hearing to commence within 60 days of the date of the notice.

(e) If the commissioner disapproves rates pursuant to subdivision (c), the commissioner shall immediately serve notice on the insurer of the disapproval. An insurer whose rates have been disapproved pursuant to that subdivision may, within 20 days of the date of the notice of disapproval, request a hearing, and the commissioner shall hold a hearing within 60 days of the date of the notice of disapproval.

(f) Every insurer or rating organization shall provide within this state reasonable means whereby any person aggrieved by the application of its filings may be heard by the insurer or rating organization on written request to review the manner in which the rating system has been applied in connection with the insurance afforded or offered. If the insurer or rating organization fails to grant or reject the request within 30 days, the applicant may proceed in the same manner as if the application had been rejected. Any party affected by the action of the insurer or rating organization on the request may appeal, within 30 days after written notice of the action, to the commissioner who, after a hearing held within 60 days from the date on which the party requests the appeal, or longer upon agreement of the parties and not less than 10 days’ written notice to the appellant and to the insurer or rating organization, may affirm, modify, or reverse that action. If the commissioner has information on the subject from which the appeal is taken and believes that a reasonable basis for the appeal does not exist or that the appeal is not made in good faith, the commissioner may deny the appeal without a hearing. The denial shall be in writing, set forth the basis for the denial, and be served on all parties.

(g) If the commissioner disapproves a rate, the commissioner shall issue an order specifying in what respects the rate fails to meet the requirements of this article and stating when, within a reasonable period thereafter, that rate shall be discontinued for any policy issued or renewed after a date specified in the order. The order shall be issued within 20 days after the notice prescribed in subdivision (e) is served. If a hearing is held pursuant to subdivision (d) or (e), the order shall be issued, instead, within 30 days after the close of the hearing. The order may include a provision for premium adjustment for the period after the effective date of the order for policies in effect on that date.

(h) Whenever an insurer has no legally effective rates as a result of the commissioner’s disapproval of rates or other act, the commissioner shall specify interim rates for the insurer that protect the interests of all parties and may order that a specified portion of the premiums be placed in an escrow account approved by the commissioner. When new rates become legally effective, the commissioner shall order the escrowed funds or any overcharge in the interim rates to be distributed appropriately, except that refunds of less than ten dollars ($10) per policyholder shall not be required. However, if the commissioner has disapproved rates pursuant to subdivision (c), the commissioner shall order the insurer in the interim to use, at a minimum, the approved advisory pure premium rates pursuant to subdivision (b) of Section 11750, as modified by the uniform experience rating plan established pursuant to subdivision (c) of Section 11734, without any deviations on account of any supplementary rate information and reflecting the actual expenses of the insurer, until the time that a final determination of rates is adjudicated and ordered through a hearing.

(i) Notwithstanding any other provision of law, an insurer may increase rates on policies with inception dates prior to January 1, 2003, in an amount no greater than the pure premium rate increase approved by the commissioner reflecting the cost of the change in benefit levels authorized by the act adding this subdivision.

history: (History: Amended (as amended by Stats. 2002, Ch. 6) by Stats. 2002, Ch. 873, Sec. 5. Effective January 1, 2003.)

article: 2. State Rate Supervision


text: A classification shall take no account of any physical impairment of employees or the extent to which employees may have persons dependent upon them for support.

article: 2. State Rate Supervision


text:
(a) An insurer shall not use any plan for the payment of dividends to policyholders by reason of a participating provision in a workers’ compensation insurance policy which is unfairly discriminatory.

(b) Every insurer issuing workers’ compensation insurance policies under the laws of this state shall file annually with the rating organization designated by the commissioner information relating to dividend payments made to its policyholders. Information filed shall be in sufficient detail to permit the rating organization to prepare for the commissioner’s review and approval, a report showing in the aggregate for all companies premiums earned, losses incurred, and dividends paid the preceding calendar year under policies containing a participating provision, separately by premium size and loss ratio categories, as may reasonably be prescribed by the commissioner.

(c) Information submitted by individual companies pursuant to this section shall be confidential and not subject to public disclosure under any law of this state.

article: 2. State Rate Supervision


text:
Rates and supplementary rate information filed for use in this state pursuant to this article and Article 3 (commencing with Section 11750), as added and amended by Chapter 228 of the Statutes of 1993, shall not be effective prior to the first normal anniversary rating date of a policy on or after January 1, 1995. Rates, any rating plan or plans, and policy forms issued or approved prior to January 1, 1995, shall remain in effect only until the first normal anniversary rating date on or after January 1, 1995, as determined by a licensed rating organization pursuant to rules issued or approved by the commissioner in effect on July 16, 1993. Prior to January 1, 1995, no policy may be issued or renewed for a term of less than one year for the purpose of changing the normal anniversary date of the policy or the preceding policy. No policy may be canceled, amended, or rewritten for the purpose of avoiding this section.

Notwithstanding Section 7 of Chapter 228 of the Statutes of 1993, this section shall become operative January 1, 1994.

history: (History: Added by Stats. 1993, Ch. 1242, Sec. 7.5. Effective January 1, 1994. Operative January 1, 1994, by its own provisions, notwithstanding the January 1, 1995, operative date of Article 2 (commencing with Section 11730), as added by Stats. 1993, Ch. 228.)

article: 2. State Rate Supervision


text:
(a) The Legislature finds and declares that the insolvencies of more than a dozen workers’ compensation insurance carriers have seriously constricted the market and led to a dangerous increase in business at the State Compensation Insurance Fund. Yet more than 200 insurance companies are still licensed to offer workers’ compensation insurance in California. Unfortunately, many employers do not know which carriers are offering coverage, and it is both difficult and time consuming to try to get information on rates and coverages from competing insurance companies. A central information source would help employers find the required coverage at the best competitive rate.

(b) On or before July 1, 2004, the commissioner shall establish and maintain, on the Internet Web site maintained by the department, an online rate comparison guide showing workers’ compensation insurance rates for the 50 insurance companies writing the highest volume of business in this line during the two preceding years.

(c) The online comparison shall display rates for each class set forth in the classification system adopted by the commissioner pursuant to Section 11734, shall include the effective date of each rate, and shall list the rates for each class from the lowest to the highest rate.

(d) The rating organization designated by the commissioner as his or her statistical agent pursuant to Section 11751.5 shall determine the cost savings achieved in the 2003 workers’ compensation reform legislation. Each insurer shall certify, in the form and manner determined by the commissioner, that its rates reflect those cost savings. The certifications shall be made available to the public on the Internet Web site maintained by the department.

history: (History: Added by Stats. 2003, Ch. 635, Sec. 11. Effective January 1, 2004.)

article: 2. State Rate Supervision


text:
(a) The purpose of this article is to promote the public welfare by regulating concert of action between insurers in collecting and tabulating rating information and other data that may be helpful in the making of adequate pure premium rates for workers’ compensation insurance and for employers liability insurance incidental thereto and written in connection therewith for all admitted insurers and in submitting them to the commissioner for approval; to authorize and regulate the existence and cooperation of qualified rating organizations to one of which each workers’ compensation insurer shall belong; to authorize and regulate cooperation between insurers, rating organizations and advisory organizations in ratemaking and other related matters to the end that the purposes of this chapter may be complied with and carried into effect.

(b) Notwithstanding any other provision of law, within 60 days of receiving an advisory pure premium rate filing made pursuant to subdivision (b) of Section 11750.3, the Insurance Commissioner shall hold a public hearing, and within 30 days of the conclusion of the hearing, approve, disapprove, or modify the proposed rate.

history: (History: Amended by Stats. 2000, Ch. 884, Sec. 2. Effective September 29, 2000.)

article: 3. Rating and Other Organizations

path: 2. CLASSES OF INSURANCE > 3. LIABILITY, WORKERS' COMPENSATION, AND COMMON CARRIER LIABILITY INSURANCE > 3. Regulation of Business of Workers’ Compensation Insurance > 3. Rating and Other Organizations


text:
As used in this article, unless a different meaning is manifest, the term:

(a) “Insurer” means every insurer authorized to transact workers’ compensation insurance and employer’s liability insurance incidental thereto and written in connection therewith in this state, including the State Compensation Insurance Fund;

(b) “Rating organization” means any organization which has as its primary object or purpose the collecting of loss and expense statistics and other statistical information and data, the making of pure premium rates and those rating plans authorized by Section 11734 for workers’ compensation insurance and employer’s liability insurance incidental thereto and written in connection therewith and presenting them to the commissioner for approval;

(c) “Insurance” means workers’ compensation insurance and employer’s liability insurance incidental thereto and written in connection therewith;

(d) “Willful” or “willfully” in relation to an act or omission which constitutes a violation of this article means with actual knowledge or belief that such act or omission constitutes such violation and with specific intent to commit such violation.

(e) “Advisory organization” means every person, group or organization, other than an insurer, whether located within or without this state, which prepares policy forms or underwriting rules incidental to or in connection with workers’ compensation insurance and employer’s liability insurance incidental thereto and written in connection therewith or which collects and furnishes to admitted insurers or rating organizations loss statistics or other statistical information and data relating to workers’ compensation insurance and employer’s liability insurance incidental thereto and written in connection therewith and acts in an advisory capacity to such insurers or rating organizations as distinguished from a ratemaking capacity. No duly authorized attorney at law acting in the usual course of his profession shall be deemed to be an advisory organization.

(f) “Employer’s liability insurance incidental thereto and written in connection therewith” means insurance of any liability of employers for injuries to, or death of, employees arising out of, and in the course of, employment when this insurance is incidental to, and written in connection with, the workers’ compensation insurance issued to the same employer and covering the same employer interests.

history: (History: Amended (as amended by Stats. 1993, Ch. 228) by Stats. 1993, Ch. 1242, Sec. 9. Effective January 1, 1994. Amendments (to currently operative law) by Stats. 1993, Chs. 228 and 1242, are operative January 1, 1995, by Sec. 7 of Ch. 228, as amended by Sec. 43 of Ch. 1242.)

article: 3. Rating and Other Organizations


text: The provisions of this article shall apply to all workers’ compensation insurance and employer’s liability insurance incidental thereto and written in connection therewith in this state, except reinsurance.

history: (History: Amended by Stats. 1981, Ch. 714, Sec. 300.)

article: 3. Rating and Other Organizations


text:
A rating organization may be organized pursuant to this article and maintained in this state for the following purposes:

(a) To provide reliable statistics and rating information with respect to workers’ compensation insurance and employer’s liability insurance incidental thereto and written in connection therewith.

(b) To collect and tabulate information and statistics for the purpose of developing pure premium rates to be submitted to the commissioner for issuance or approval.

(c) To formulate rules and regulations in connection with pure premium rates and the administration of classifications and rating systems.

(d) To inspect risks for classification or rate purposes and to furnish to the insurer and upon request of the employer and after notice to the insurer, to furnish to the employer full information concerning the rates applicable to the employer’s insurance.

(e) To examine policies, daily reports, endorsements or other evidences of insurance for the purpose of ascertaining whether they comply with the provisions of law and to make reasonable rules governing their submission. A rating organization may develop loss data on behalf of its members to assist members in developing plans pursuant to subdivision (e) of Section 11735 and other loss sensitive plans.

(f) Within one year after expiration of any workers’ compensation insurance policy, to initiate test audits of insured employer’s payrolls and insurer’s audits of those payrolls to check the accuracy and reliability thereof, and to examine all records relative thereto and premises of insured employers.

(g) To exchange information and experience data with rating organizations, advisory organizations, and insurers in this and other states, with respect to ratemaking.

(h) To become a member or subscriber of any lawfully authorized ratemaking or advisory organization whenever membership in the organization is necessary or helpful to the rating organization.

(i) To perform all acts necessary, incidental, or convenient to carry out the foregoing purposes or the provisions of this chapter relating to rating organizations.

history: (History: Amended by Stats. 1994, Ch. 1131, Sec. 3. Effective January 1, 1995.)

article: 3. Rating and Other Organizations


text:
On and after January 1, 1952, a rating organization shall not conduct its operations in this state without first having filed with the commissioner a written application for and securing a license to act as a rating organization. Any rating organization may make application for and obtain a license as a rating organization if it meets the requirements for license set forth in this article. The fee for filing an application for a license as a rating organization is two hundred twenty-four dollars ($224) payable in advance to the commissioner. Every rating organization shall file with its application:

(a) A copy of its constitution, its articles of incorporation, agreement of association, and of its bylaws, rules and regulations governing the conduct of its business, all certified by the custodian of the originals thereof.

(b) A list of its members who shall not number less than five insurers authorized to write and writing workers’ compensation insurance in this state and whose combined experience shall be determined by the commissioner to be reasonably adequate for ratemaking purposes.

(c) The name and address of a resident of this state upon whom notices of the commissioner or process affecting that rating organization may be served.

(d) A statement of its qualifications as a rating organization.

history: (History: Amended by Stats. 2017, Ch. 534, Sec. 71. (AB 1699) Effective January 1, 2018.)

article: 3. Rating and Other Organizations


text:
To obtain and retain a license, a rating organization shall provide satisfactory evidence to the commissioner that it shall do all of the following:

(a) Permit any insurer to become a member at a reasonable cost and without discrimination, or to withdraw therefrom.

(b) Neither have nor adopt any rule or exact any agreement, the effect of which would be to require any member as a condition of membership to adhere to any rates.

(c) Neither adopt any rule nor exact any agreement, the effect of which would be to prohibit or regulate the payment of dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders or members.

(d) Neither practice nor sanction any plan or act of boycott, coercion, or intimidation.

(e) Neither enter into nor sanction any contract or act by which any person is restrained from lawfully engaging in the insurance business.

(f) Notify the commissioner promptly of every change in its constitution or articles of incorporation, agreement of association, or in its bylaws, rules and regulations governing the conduct of its business; its list of members; and the name and address of the resident of this state designated by it upon whom notices or orders of the commissioner or process affecting the organization may be served.

(g) Agree that the commissioner or his or her representative may attend all meetings of the organization or any of its committees.

(h) Agree to permit four members of the public, two representing organized labor and two representing insured employers, to serve on the managing or governing committee of the organization as specified in Section 11751.35.

(i) Maintain reasonable records of the experience of its members and of the data, statistics or information collected or used in connection with the pure premium rates, classifications, manual rules, and policy and endorsement forms used by its members so that these records will be available at all reasonable times to enable the commissioner to determine whether the rating organization and its members comply with the provisions of this chapter applicable to them. These records shall be maintained in an office within this state. The commissioner may prescribe a uniform system for the keeping of the records which shall be reasonably adapted to the rating organization and its members’ method of operation and which shall be applicable to all rating organizations licensed under this article and their members.

history: (History: Amended by Stats. 1993, Ch. 228, Sec. 5. Effective January 1, 1994. Operative January 1, 1995, by Sec. 7 of Ch. 228.)

article: 3. Rating and Other Organizations


text:
The commissioner shall examine each application for license to act as a rating organization and the documents filed therewith and may make any further investigation of the applicant, its affairs and its proposed plan of business, as he deems desirable.

The commissioner shall issue the license applied for within 60 days of its filing with him if from such examination and investigation he is satisfied that:

a. The business reputation of the applicant and its officers is good.

b. The facilities of the applicant are adequate to enable it to furnish the services it proposes to furnish.

c. The applicant and its proposed plan of operation conform to the requirements of this chapter.

Otherwise, but only after hearing upon notice, the commissioner shall in writing deny the application and notify the applicant of his decision and his reasons therefor.

Licenses issued pursuant to this section shall remain in effect until suspended or revoked.

history: (History: Added by Stats. 1951, Ch. 1123.)

article: 3. Rating and Other Organizations


text:
(a) Subject to the approval of the commissioner, a rating organization licensed under this article may adopt any reasonable constitution, articles of incorporation, or agreement of association, and may make reasonable rules for the regulation of its members and the conduct of its business by bylaws or otherwise. In a rating organization of which the State Compensation Insurance Fund is a member, it shall be entitled without election to membership on the managing or governing committee and on the classification and rating committee thereof.

(b) In addition, after consultation with the California Labor Federation, AFL-CIO, other statewide organized labor organizations, and statewide associations representing business, the commissioner shall appoint two public members representing insured employers and two public members representing organized labor to serve on the managing or governing committee of a rating organization. The bylaws of a rating organization shall permit a public member from time to time to designate in his or her stead a representative from the same employer organization or an affiliated employee union, as the case may be, to attend and participate in any meeting of the governing committee of a rating organization.

history: (History: Amended by Stats. 1989, Ch. 892, Sec. 5.)

article: 3. Rating and Other Organizations


text: From and after the taking effect of this act, it shall be the duty of every insurer to be a member of a rating organization. No insurer may at the same time belong to more than one rating organization licensed under this article.

article: 3. Rating and Other Organizations


text: The commissioner, after notice and hearing, may promulgate reasonable rules and statistical plans, which may be modified from time to time and which shall be used thereafter in the recording and reporting by insurers of their loss and expense experience in order that the experiences of all insurers may be made available in such form and detail as may be necessary to aid the commissioner in administering the provisions of Article 2 (commencing with Section 11730). The commissioner shall designate a rating organization licensed under this article as his or her statistical agent to gather and compile such experience statistics and all licensed rating organizations shall report the experience of their members to such designated rating organization. Subject to reasonable rules approved by the commissioner, such designated rating organization shall make such experience statistics, when compiled, available to all licensed rating organizations and may make a reasonable charge to other rating organizations for the expense incurred by it in combining, tabulating and compiling the experience of all workers’ compensation insurers.

history: (History: Amended by Stats. 1993, Ch. 1242, Sec. 11. Effective January 1, 1994.)

article: 3. Rating and Other Organizations


text:
(a) The rating organization designated the statistical agent pursuant to Section 11751.5 shall provide to the Director of Industrial Relations, upon request, any information in the possession of, or reasonably attainable by the rating organization, that would assist the Director of Industrial Relations to identify employers who fail to secure adequate insurance in violation of Section 3700 of the Labor Code. The information requested pursuant to this section shall be provided by the rating organization in a form and manner prescribed by the Director of Industrial Relations.

(b) The rating organization designated the statistical agent pursuant to Section 11751.5 shall provide to the Registrar of Contractors of the Contractor’s State License Board, upon request, any information in the possession of, or reasonably attainable by, the rating organization that would assist in identifying licensed contractors who fail to secure adequate insurance in violation of Section 3700 of the Labor Code. The information requested pursuant to this section shall be provided by the rating organization in a form and manner prescribed by the Registrar of Contractors.

history: (History: Amended by Stats. 2005, Ch. 428, Sec. 1. Effective January 1, 2006.)

article: 3. Rating and Other Organizations


text:
An insurer shall report to its rating organization as corrections or revisions of losses, pursuant to the unit statistical plan and uniform experience rating plans approved by the commissioner, if any of the following is applicable:

(a) A loss record detail was incorrectly reported through mistake other than error of judgment.

(b) One or more claims are declared noncompensable. A claim is declared noncompensable if any of the following applies:

(1) There is an official ruling specifically holding that a claimant is not entitled to benefits under the workers’ compensation laws of the state, even though the claimant may have been awarded reimbursement for expenses incurred by the claimant in presenting the case.

(2) No claim was filed during the period of limitation provided by the workers’ compensation laws for the filing of the claim, and the carrier, therefore, closes the claim.

(3) Where the carrier contends, prior to the valuation date, that a claimant is not entitled to benefits under the workers’ compensation laws and the claim is officially closed because of the claimant’s failure to prosecute the claim.

(c) The carrier has recovered in an action against a third party.

(d) A death claim has been compromised over the sole issue of the applicability of the workers’ compensation laws of the state.

(e) The exposure has been reassigned to another classification through the revision of an audit, in which case the insurer shall file with the revision of exposure a revision of losses that will reassign all claims to the appropriate classification.

(f) A clerical error in either the classification assignment or the type of injury assignment of a given claim, or a group of claims, has been discovered by the insurer.

(g) A clerical error in either the classification assignment or the type of injury assignment of a given claim has been discovered by the rating organization. The insurer shall, when notified by the rating organization, file a revision of losses or make satisfactory explanation.

(h) A correction is made in a classification assignment of a given claim, or a group of claims, as a result of the organization test audit of an insured for which the experience has been submitted.

(i) The claim has been determined to be a joint coverage claim in accordance with the unit statistical plan approved by the commissioner.

history: (History: Amended by Stats. 1997, Ch. 748, Sec. 3. Effective January 1, 1998.)

article: 3. Rating and Other Organizations


text: Whenever a claim or claims used in an experience rating are closed and reported pursuant to the unit statistical plan approved by the commissioner and are valued, in the aggregate, at an amount that is less than 60 percent of the highest reported aggregate value of all of these claims, then the experience rating shall be revised pursuant to the uniform experience rating plan approved by the commissioner based on the most current reported values for all claims used in the experience rating.

history: (History: Added by Stats. 1997, Ch. 748, Sec. 4. Effective January 1, 1998.)

article: 3. Rating and Other Organizations


text: Notwithstanding Section 11751, each rating organization possessing a license of indefinite term pursuant to this article shall owe and pay to the commissioner an annual fee of one hundred fifty dollars ($150), in advance, on account of that license until its final termination. That fee shall be for annual periods commencing on July 1 of each year and ending on June 30 of each year and shall be due and payable on each March 1 and shall be delinquent on and after each April 1.

history: (History: Amended by Stats. 2017, Ch. 534, Sec. 72. (AB 1699) Effective January 1, 2018.)

article: 3. Rating and Other Organizations


text:
(a) Four members of the public, two representing organized labor and two representing insured employers, appointed pursuant to subdivision (b) of Section 11751.3, shall be entitled to serve on the managing or governing committee of a rating organization licensed under this article. A public member shall be entitled to vote on all issues involving pure premium rates, classifications, rating plans, rating systems, manual rules and policy, and endorsement forms which are properly brought before the committee. A public member shall be removed by the commissioner only for cause.

(b) In the event a public member is unable or unwilling to complete his or her term, after consultation with the California Labor Federation, AFL-CIO, other statewide organized labor organizations, and statewide organizations representing business, as the case may be, the commissioner shall appoint a successor from organized labor or an insured employer to complete the unexpired term.

(c) The public members who serve on the governing committee of a rating organization licensed under this article together may, by a majority vote, retain experts who shall include a fellow of the Casualty Actuarial Society, to advise them on any matter specified in subdivision (a). The actuary hired may participate in all proceedings of the actuarial committee of the rating organization. The reasonable expense of retaining these experts shall not exceed one hundred thousand dollars ($100,000) per year and shall be paid from the budget of the department. The commissioner shall increase this amount annually to reflect any needed cost-of-living adjustments. The public members may submit information obtained from these experts, as well as any other information they deem appropriate, to the commissioner for his or her consideration in approving a change of any matter specified in subdivision (a).

(d) In addition to the expenses authorized pursuant to subdivision (c), the public members who serve on the governing committee of a rating organization licensed under this article may expend up to an additional one hundred thousand dollars ($100,000) per year, which shall be paid by insurer members of the rating organization. Those funds shall be used to retain staff, who shall be hired by a majority vote of the public members.

history: (History: Amended by Stats. 1995, Ch. 375, Sec. 2. Effective January 1, 1996.)

article: 3. Rating and Other Organizations


text: If an insurer, the State Compensation Insurance Fund, a rating organization, or an advisory organization requests an official action by the commissioner under Chapters 2 (commencing with Section 11630), 3 (commencing with Section 11690), or 4 (commencing with Section 11770) of this part which he can lawfully consummate only after a noticed public hearing required by law, the commissioner shall require the request to be in writing and require the payment of five hundred ninety dollars ($590), in advance, as a fee for filing such request. Such fee shall be earned even if the request is denied or is granted in an altered form.

history: (History: Amended by Stats. 1985, Ch. 770, Sec. 24.)

article: 3. Rating and Other Organizations


text:
(a) An insurer under a wrap-up insurance policy shall report workers’ compensation losses and payroll information for each contractor and subcontractor to its rating organization on a timely basis and in accordance with the uniform statistical plan. Within 10 days, upon request, the insurer shall provide to each contractor and subcontractor copies of the report covering workers’ compensation losses and payroll information for that contractor or subcontractor.

(b) For the purposes of this section, a “wrap-up insurance policy” is an insurance policy, or series of policies, written to cover risks associated with a work of improvement, as defined in Section 8050 of the Civil Code, and covering two or more of the contractors or subcontractors that work on that work of improvement.

history: (History: Amended by Stats. 2010, Ch. 697, Sec. 41. (SB 189) Effective January 1, 2011. Operative July 1, 2012, by Sec. 105 of Ch. 697.)

article: 3. Rating and Other Organizations


text:
The commissioner may, as often as reasonable and necessary, make or cause to be made an examination of each rating or advisory organization to ascertain whether such organizations comply with the legal requirements applicable to it under this article.

In lieu of any such examination the commissioner may accept the report of an examination made by the insurance supervisory official of another state or the report of a representative designated by the National Association of Insurance Commissioners.

article: 3. Rating and Other Organizations


text: The officers, managers, agents and employees of any such organization may be examined by the commissioner at any time under oath and shall exhibit all books, records, accounts, documents or agreements governing its method of operation together with all data, statistics and information of every kind and character collected or considered by such organization in the conduct of the operations to which the examination relates.

article: 3. Rating and Other Organizations


text: The reasonable cost of any examination authorized by this article of any rating or advisory organization shall be paid by the organization examined.

article: 3. Rating and Other Organizations