California Code of Regulations
Title 8 - Industrial Relations
Division 1 - Department of Industrial Relations
Chapter 8 - Office of the Director
Subchapter 2 - Administration of Self-Insurance Plans
Article 13 - Group Self-Insurance
Section 15477 - Surplus or Insufficient Funding
Current through Register 2024 Notice Reg. No. 38, September 20, 2024
(a) The Board of Trustees of a group self insurer shall not declare that surplus contributions collected in excess of the amount necessary to fund all obligations for any given program year will be refunded to group members unless the group self insurer's most recent annual certified, independently audited financial statement indicates that the group self insurer's assets exceed its liabilities and unless the group self insurer's current actuarial report indicates a surplus of group funds for each program year as indicated in subsections (a)(1) and (a)(2) below.
(b) If at the end of any program year member funds collected and investment income associated with any program year are insufficient to completely fund all estimated future claim liabilities and expenses at the required confidence level for any program year, unfunded amounts by program year shall be immediately reported to the Chief, along with a proposed plan to achieve correction of the deficiency. Any plan to correct the deficiency shall be subject to approval by the Chief. The plan may include, but is not limited to, any or all of the following:
(c) If the plan to achieve prompt correction of the funding deficiency for all claims is not approved by the Chief, the Chief may order the Board of Trustees of the group self insurer to show good cause before the Director why it should not be ordered by the Director to (1) immediately assess the group members for the full amount of the funding deficiency and/or (2) order that any surplus funds distributed to group members during the previous twelve calendar months from the date of discovery of the funding deficiency by the group self insurer be immediately returned to the group self insurer; and/or (3) why the Director should not order the appointment of a conservator or liquidator for the group self insurer.
(d) If the Director determines that actions specified in subsections (b) and (c) of this section will not achieve full funding of all claim liabilities for the group self insurer, the Director may in his or her discretion order that an outside conservator or liquidator, including the Self Insurer's Security Fund, be appointed at the expense of the group self insurer to manage the financial affairs of the group self insurer and to take whatever steps may be necessary in order to return a financially troubled group self insurer to full financial solvency or to liquidate the group's liabilities.
1. New
section filed 6-30-94; operative 6-30-94 (Register 94, No. 26).
2.
Amendment of section heading and section filed 3-2-2009; operative 3-2-2009
pursuant to Government Code section 11343.4 (Register 2009, No.
10).
3. Amendment of subsections (a)(1)-(2), (b) and (b)(5)-(c)
filed 12-31-2012 as an emergency; operative 1-1-2013 pursuant to Government
Code section 11346.1(d) (Register 2013, No. 1). A Certificate of Compliance
must be transmitted to OAL by 7-1-2013 or emergency language will be repealed
by operation of law on the following day.
4. Certificate of
Compliance as to 1-1-2013 order, including additional nonsubstantive amendments
to subsections (a)(1)-(2), transmitted to OAL 7-1-2013 and filed 8-13-2013
(Register 2013, No. 33).
Note: Authority cited: Sections 54, 55 and 3702.10, Labor Code. Reference: Sections 3700, 3701, 3701.5 and 3702.10, Labor Code.