Chapter 8. Office of the Director
Subchapter 2. Administration of Self-Insurance Plans
Article 2. Certificate to Self Insure

§15203. Application.

(a) Every employer desiring to procure an initial certificate to self-insure its workers' compensation liabilities shall make application on;

(1) Form A4-1 (Rev. 2/92) for private individual employer applicants seeking an individual Certificate to Self Insure;

(2) Form A4-2 (Rev. 2/92) for public employer applicants;

(3) Form A4-3 (Rev. 1/94) for a private group employer and their members seeking an group Certificate to Self Insure.

(4) Form A4-4-3M (Rev 1/94) for each member of a group seeking an affiliate certificate.

Note 1: The current application forms for private and public employers are contained in Plates A-1, A-2 and A-3 of the Appendix following the last article in these Group 2 regulations.

Note 2: A new application may be required when an existing self insurer reincorporates, merges, changes ownership, or adds a new or separate subsidiary or affiliate to its existing workers' compensation self insurance program. In some cases, it may be possible to amend and transfer an existing certificate without a new application.

(b) A complete application to self insure by a private employer (Form A4-1 (Rev. 2/92) shall include all attachments requested on the application form itself, and, as applicable, the following:

(1) A current, certified, independently audited financial statement complete with all schedules and notes for the past three years;

NOTE: The application of a private sector subsidiary or affiliate may include the consolidated financial statement of its parent in lieu of the subsidiary's financial statement.

(2) An unaudited financial statement or published quarterly report, or a consolidated financial statement for the current year or portion thereof;

(3) An Agreement of Assumption and Guarantee of Liabilities for each self insurer and subsidiary or affiliate applicant executed by the parent employer or majority owner, or partners;

(4) A Resolution authorizing the application to self insure and empowering employees or officers of the applicant employer to sign the application form and any other necessary documents on behalf of the applicant employer;

(5) A Resolution by the general partners, or parent corporation authorizing the execution of the Agreement of Assumption and Guarantee of Liabilities on behalf of a subsidiary or affiliate applicant employer;

(6) Original Certificates of Status or other appropriate registration documents showing that the applicant employer is licensed or registered to do business in California;

(7) An evaluation of the applicant's injury and illness prevention program or proof of a DOSH inspection pursuant to Section 15353 of these regulations; and

(8) Payment of any required application filing fee.

(c) A complete application to self insure by a public employer (Form A4-2 (Rev. 2/92) shall include all attachments requested on the public sector application form and, as applicable, the following:

(1) An Agreement of Assumption and Guarantee of Liabilities for the predecessor agency due to a unification, merger, realignment of the boundaries of an existing self insured public agency, or name change by the successor or surviving public agency;

(2) A Resolution authorizing the application to self insure and empowering employees or officers of the applicant employer or joint powers authority to sign the application form and any other necessary documents on behalf of the applicant.

(3) All public applicants shall indicate the proposed start up date of its self insurance program as part of its application.

(d) A complete application to self insure on a Form A4-3 (Rev. 1/94) by a private group of employers shall include all the attachments requested in the application form itself, and, as applicable, the following:

(1) A proforma financial statement prepared by an independent, certified public accountant with all schedules and notes for the group applicant;

(2) A current, certified, independently audited financial statement with all schedules and notes for each proposed group member for the past two years;

NOTE: The application of a private sector subsidiary or affiliate of any group member may include the consolidated financial statement of its parent in lieu of the subsidiary or affiliate financial statement;

(3) An unaudited financial statement or published quarterly report, or consolidated financial statement for the current year or portion thereof;

(4) An Agreement of Assumption and Guarantee of Liabilities of Workers' Compensation Liabilities For Group Members [Form A4-3G (Rev 1/94)] for each or listing each proposed group member and any subsidiary or affiliate of each proposed group member executed by the group administrator of the group applicant, as required in Section 15203.1 of these regulations;

(5) A Resolution by the Board of Trustees [Form GR-1 (Rev. 1/94)] of the group applicant authorizing the application to become a group self insurer and empowering the group administrator and other employees or officers or Trustees of the group applicant to sign the application form and any other necessary documents on behalf of the group applicant, and, if granted a Certificate to Self Insure, the group self insurer as required in Section 15203.3(d) of these regulations.

(6) A Resolution by the Board of Trustees of the group applicant authorizing the execution of an Agreement of Assumption and Guarantee For Workers' Compensation Liabilities on behalf of the proposed group members and any future members of the group self insurer granted an Affiliate Certificate;

(7) An original Certificate of Status or other appropriate registration documents showing the group applicant and each group member is licensed or registered to do business in California;

(8) An evaluation of the group applicant and group members injury and illness prevention program or proof of a DOSH inspection pursuant to Section 15353 of these regulations;

(9) An original, executed Indemnity Agreement and Power of Attorney of Joint and Several Liability between the group applicant and each proposed member pursuant to Section 15479 of these regulations.

(10) Payment of the required application fee as required by Section 15204 of these regulations.

(11) A copy of the Initial Feasibility Study as required in Section 15471 of these regulations.

(12) Agreement and Undertaking for Security Deposit.

(13) Completed application forms from proposed members.

(e) A complete application to self insure on a Form A4-4 (Rev. 1/94) by each member of a group shall include all the attachments requested in the application form itself, and, as applicable, the following:

(1) A current copy of the applicant's certified, independently audited, financial statement complete with all schedules and notes; or

(2) A current copy of the applicant's reviewed financial statement prepared by a certified public accountant, complete with all schedules and notes, provided the private group self insurer can demonstrate and maintain a consolidated minimum net worth twice that required in Section 15203.2(f).

NOTE: If the report of the financial condition is dated more than 12 months prior to the date of this application, the Director may require interim financial statement certified by the appropriate finance officer and dated not less than 3 months from the date of this application.

(3) Resolution to be Self Insured as a Member of the Group Self Insurer.

(4) Indemnity Agreement and Power of Attorney, as required in section 15479.

(f) To any joint powers authority which pools the workers' compensation liabilities of its public agency members, the Manager shall issue a Certificate to Self Insure to the joint powers authority and the master certificate number to the joint powers authority. All members of the joint powers authority shall be issued an affiliate certificate numbers under the certificate number issued to the joint powers authority.

(g) An applicant for self insurance filing a private individual employer application or a public employer application will be notified in writing within 14 days, that an application is complete or deficient. An applicant for self insurance filing a private group employer application, will be notified in writing within 30 days, that an application is complete or deficient. A notice indicating that the application is deficient will include a list of items required to be included or completed.

(h) Upon receipt of a complete private individual employer application, the applicant will be notified within 45 days of the Director's decision to allow self insurance. The maximum processing time for a private individual employer application is 45 days, the minimum time is 21 days and the median time is 30 days.

(i) Upon receipt of a complete public entity application, the applicant will be notified within 30 days of approval of application. The maximum processing time for a public employer application is 30 days, the minimum time is 7 days and the median time is 14 days.

(j) Upon receipt of a complete private group employer application, the applicant will be notified within 90 days of the approval of the application. The maximum processing time for a private group employer application is 90 days, the minimum time is 30 days and the median time is 60 days.

NOTE: Authority cited: Sections 54, 55, 59 and 3702.10, Labor Code. Reference: Sections 3700, 3700(b), 3701, 3702, 3702.5 and 6401.7(a), Labor Code; and Sections 15374-15378, Government Code.

HISTORY

1. Repealer and new section filed 6-1-72; effective thirtieth day thereafter (Register 72, No. 23).

2. Amendment filed 11-19-75; effective thirtieth day thereafter (Register 75, No. 47).

3. Amendment filed 11-21-78; effective thirtieth day thereafter (Register 78, No. 47).

4. New article 2 heading, newly designated subsections (a) and (b)-(b)(1), new subsections (b)(2)-(g)(1), amendment of Note, and repealer of form filed 12-22-92; operative 1-21-93 (Register 93, No. 2).

5. Amendment filed 6-30-94; operative 6-30-94 (Register 94, No. 26).