FOR IMMEDIATE RELEASE
IR #2002-01
Thursday, January 10, 2002

CONTACT:
Dean Fryer
Susan Gard
(415) 703-5050


Auto dealers first private group to be approved as self insurer

SAN FRANCISCO - The California Department of Industrial Relations (DIR) recently approved the first private group self insurer plan since the 1993 change in the state labor code allowing employers to pool their workers' compensation liabilities.

On Jan. 1, the California Motor Car Dealers Comp Plan, Inc., became the first private sector group to self insure for workers' compensation liabilities as an alternative to traditional coverage. Members of this plan are Claridge's Ltd., Fremont; Crown Motors, Redding; Pearson Ford Co., San Diego; and Raceway Ford, Inc., Riverside.

"I am delighted to approve the first private group self insurer," said DIR director Stephen J. Smith. "We expect to see further expansion among new-car dealers and of the group self insurance concept to other industries. Group self insurance has worked for over 20 years among cities, counties and school districts, and should work equally well among private employers.

" While less than one quarter of one percent of California employers are currently self insured for workers' compensation liabilities, these primarily large employers pay annually about a third of all workers' compensation benefits in the state.

State self insurance regulations require private sector groups to prepare an extensive feasibility study, have $5 million qualifying net worth among members and belong to the same homogenous industry. The group must be governed by a board of trustees, charge adequate premiums, carry specific excess insurance for catastrophic losses, actuarially project losses, and agree to joint and several liability of all losses. These requirements are in addition to the state requisite for all workers' compensation self insurers to a post security deposit, file annual reports of liabilities, and pay assessments and fees.

For more information on self insured workers' compensation plans visit the Self Insurance Plan web site at http://www.dir.ca.gov/SIP/sip.html.

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