Current through Register 2024 Notice Reg. No. 38, September 20, 2024
(a)
Subject to the limitations set forth in Section
15475.2, the Board of Trustees of a
group self-insurer may invest excess funds not immediately needed for the
payment of the group insurer's liabilities in any of the following:
(1) United States Treasury Bills, Notes, and
Bonds for which the full faith and credit of the United States are pledged for
the payment of interest and principal.
(2) Federal agency or United States
government-sponsored enterprise obligations, participations, or other
instruments, including those issued by or fully guaranteed as to principal and
interest by federal agencies or United States government sponsored
enterprises.
(3) Certificates of
Deposit that are FDIC or NCUA insured or collateralized by the issuing
institution. Investments in eligible certificates of deposit, that are brokered
into various FDIC and/or NCUA insured institutions, shall have a maximum
maturity of no more than five (5) years, and shall not exceed fifty percent
(50%) of the total portfolio as measured at the date of purchase.
(4) Money market accounts and savings
accounts offered by financial institutions whose deposits are insured by a
federal agency. Such deposit accounts in financial institutions shall be
limited to offices or branches of the financial institutions located in the
State of California. Should the amount deposited in any single account exceed
the federally insured amount for any one account, the financial institution
shall also meet the credit rating requirements as set forth in Section
15215(e).
(5) Bonds, notes, warrants, or other evidence
of indebtedness of any local agency or State agency within the United States of
America, including bonds payable solely out of the revenues from a
revenue-producing property owned, controlled, or operated by the State or local
agency, or by the department, board, agency, or authority of the State or local
agency, provided the credit worthiness of the security meets the same
requirements of securities posted with the Director as security deposit in
Section 15213(a)(1).
(b) In addition to investments made pursuant
to subsections (a)(1) through (a)(2) of this section, but only if invested
through the services of a registered investment advisor, the Board of Trustees
of a private group self-insurer may invest excess funds not immediately needed
for the payment of group liabilities in any of the following:
(1) Prime Bankers' Acceptances of the 50
largest global banks.
(2)
Commercial Paper rated A1/P1/F1 by a nationally recognized statistical rating
organization. Investments in eligible commercial paper shall have a maximum
maturity of 270 days or less, and shall not exceed 25% of the total portfolio
as measured at the date of purchase.
(3) Medium-term notes, defined as all
corporate and depository institution debt securities with a maximum remaining
maturity of five years or less, issued by corporations organized and operating
within the United States or by depository institutions licensed by the United
States or any state and operating within the United States. Investments in
eligible medium-term notes shall be rated "A" or better by a nationally
recognized statistical rating organization, shall not exceed 30% of the total
portfolio as measured at the date of purchase, and shall have a maximum
remaining maturity not to exceed 10 years.
(4) Preferred stock issued by any solvent
American institution registered as provided by the Securities and Exchange Act
of 1934 (15 U.S.C.
78a-78kk); preferred stock shall not
exceed 10% of the total portfolio as measured at the date of
purchase.
(5) Bond Funds regulated
by the Securities and Exchange Commission, and rated AA or better by a
nationally recognized statistical rating organization.
(6) The maximum percentage of a self-insured
group's portfolio that may be invested in equities securities is thirty percent
(30%). In the event the investment in equity securities exceeds 30% of the
group self-insurer's portfolio, the group shall re-balance the portfolio in
order to comply with this section.
(c) The Board of Trustees, whether through
its registered investment advisor or not, shall not participate in "short
selling" (a sale of a security not owned by the seller; a technique used to
take advantage of an anticipated decline in price or to protect a profit), or
"margin transactions" (purchase of a security on credit after a margin has been
deposited).
(d) The Board of
Trustees shall not invest in any of the following assets:
(1) Commodities or Futures
Contracts;
(2) Investment in stock
not listed on an exchange or sold to the public;
(3) Stock options;
(4) Limited partnerships.
(e) With the exception of United States
Treasury Bills, Notes and Bonds, and United States government agency or
government sponsored enterprise obligations, the maximum percentage of the
group self-insurer's portfolio that may be invested in a single issuer or
single mortgage-related security is 5%.
(f) The weighted average portfolio maturity
may not exceed five years.
1. New
section filed 3-2-2009; operative 3-2-2009 pursuant to Government Code section
11343.4 (Register 2009, No. 10).
2. Amendment of subsection (a)(3)
filed 12-14-2016; operative 1-1-2017 pursuant to Government Code section
11343.4(b)(3) (Register 2016, No. 51).
Note: Authority cited: Sections
54,
55 and 3702.10, Labor Code.
Reference: Sections
3700,
3701, 3701.5, 3702.1, 3702.2 and
3702.10, Labor Code.
