Current through Register 2024 Notice Reg. No. 38, September 20, 2024
(a) Each private group self insurer shall
demonstrate and maintain homogeneity of its group members by one of the
following methods:
(1) Each group member
shall share the same, predominant three-digit North American Industry
Classification System (NAICS) Code; or
(2) Each group member shall share the same
governing class code as established by the Workers' Compensation Insurance
Rating Bureau (WCIRB) definition.
(b) In addition to the methods for
demonstrating homogeneity indicated in subsections (a)(1) and (a)(2),
applicants may demonstrate homogeneity for the purposes of eligibility for
group self insurance if one of the following occurs:
(1) The group self insurer demonstrates to
the Manager's satisfaction that the risk exposures of an affiliate group member
or applicant affiliate group member are comparable to those contemplated in the
feasibility study of the group self insurer.
(2) A group member shall be deemed as meeting
homogeneity requirements if it is a wholly owned or majority owned subsidiary
of a current group member that meets homogeneity requirements, its total
payroll does not exceed the total payroll of that current member, and no more
than 25% of the combined payroll of the existing member and the proposed group
members' payroll fails to meet homogeneity requirements as set forth in
subsection (a).
(3) The group self
insurer demonstrates to the Manager's satisfaction that no less than 75% of
payroll for each affiliate group self insurer or applicant affiliate group self
insure is distributed among two shared industry-specific workers' compensation
payroll classifications as established by the California Workers' Compensation
Insurance Rating Bureau, and WCIRB insurance rates for those classifications
are within 10% of each other.
(c) The Manager may require the group
applicant or group self insurer to present additional information or
documentation to verify that any or all group members or prospective group
members meet the requirements of subsections (a) or (b).
(d) A group self insurer shall not modify its
homogeneity underwriting requirements in any way unless it first obtains
written approval from the Manager. In order to obtain approval from the
Manager, the group self insurer must submit a written feasibility study and a
draft of amended group self insurer's bylaws to the Manager no less than 30
days before the date of the change requested, addressing the following:
(1) The feasibility study must include:
(A) The reasons for the group self insurer's
proposed modification of its homogeneity requirements;
(B) The proposed underwriting requirements
for group self insurer membership;
(C) A demonstration that the risk exposures
contemplated in the proposed modification are comparable, can reasonably be
expected to develop comparable loss experience, and meet the requirements of
subsections (a) or (b) of this section;
(D) A statement that the excess insurance
carrier or carriers for the group self insurer approve of the
modification;
(E) A statement by
the Board of Trustees of the group self insurer in support of the
modification;
(F) A plan for
communication to all group members of the group self insurer describing the
proposed modification of homogeneity requirements.
(2) The group self insurer's amended bylaws
shall ensure that:
(A) No member of the group
self insurer shall be penalized in any way for terminating membership in the
group self insurer because of the change in homogeneity requirements;
(B) The modification to homogeneity
requirements shall not disqualify any existing group member of the group self
insurer that qualifies for membership before the modification of homogeneity
requirements.
1. New
section filed 6-30-94; operative 6-30-94 (Register 94, No. 26).
2.
Amendment filed 3-2-2009; operative 3-2-2009 pursuant to Government Code
section 11343.4 (Register 2009, No. 10).
Note: Authority cited: Sections
54,
55 and 3702.10, Labor Code.
Reference: Sections
3700 and 3702.10, Labor
Code.
