Chapter 8. Office of the Director
Subchapter 2. Administration of Self-Insurance Plans
Article 3. Security Deposit Requirements

§15211.2. Agreement of Assumption and Guarantee of Liabilities.

(a) At the discretion of the Manager, the workers' compensation liabilities of a self-insurer may be assumed and guaranteed in whole or part by any other legal entity or person.

(b) The agreement of assumption and guarantee of liabilities shall be written upon a form provided by the Manager (Form A4-3 (Rev. 8/90)).

NOTE: The current Agreement forms are contained in Plate D of the Appendix following the last Article of these Subchapter 2 regulations.

(c) Regardless of whether a private affiliate or subsidiary or the self insurer's parent company's financial condition is relied upon to qualify a subsidiary or affiliate for self insurance, the private subsidiary or affiliate shall provide an agreement of assumption and guarantee of liabilities executed by the owner, or controlling partners, or holding corporation or other entity acceptable to the Manager.

EXCEPTION: At the discretion of the Director, the parental assumption agreement may be waived, but if waived, the Manager shall require the self insurer to post and maintain a minimum of a 200% deposit rate, in lieu of the assumption agreement.

(d) A corporate guarantor shall provide a Board of Directors resolution which authorizes the assumption and guarantee of the liabilities of the affiliated or subsidiary company or public agency and the board resolution shall grant signature authority to the person or position title of the person signing the agreement.

Note 1: The assumption resolution may be worded in such a manner as to be applicable to only the specific applicants to self insure or the assumption resolution may list all present subsidiaries or affiliates and authorize the addition of future, unnamed additions to the assumption resolution as an attachment without execution of a new resolution.

Note 2: The Manager shall provide an acceptable model resolution to any party upon request. The current model assumption resolutions are contained in Plate E of the Appendix following the last Article of these Subchapter 2 regulations.

(e) When a self insurer reincorporates, merges, or changes its identity, the surviving entity shall execute a new Agreement of Assumption and Guarantee of Liabilities and a new assumption resolution to cover the liabilities of the prior self insurer as part of the reapplication process to continue self insurance of workers' compensation liabilities.

(f) A foreign entity (i.e. outside the United States) may execute a parental Agreement of Assumption and Guarantee of Liabilities for a subsidiary or affiliate self insurer provided such foreign entity:

(1) executes in the English language the Agreement of Assumption and Guarantee of Liabilities and the assumption resolution; and

(2) includes a statement in the Agreement of Assumption and Guarantee of Liabilities that, in the event of the Director's need to enforce the Agreement of Assumption executed by the foreign entity on behalf of a self-insured subsidiary or subsidiaries, the foreign entity will:

(A) become subject to the jurisdiction of California courts and administration agencies; and

(B) become controlled by California law in the resolution of any dispute under the assumption and guarantee agreement.

(g) Execution of an agreement of assumption and guarantee of liabilities shall not reduce the amount of security deposit required to be posted by any self insurer as set forth in Section 15210 and 15210.1.

(h) An Assumption and Guarantee Agreement may be terminated upon receipt of a written notice of such termination and take effect 30 days after receipt of the written termination notice.

NOTE: The Director may approve an earlier termination date without 30 days' advance notice where a self-insurer is sold to a new owner and workers' compensation liabilities are either covered by an insurance policy or the new owner executes an Assumption and Guarantee Agreement effective on or before the date of the sale.

NOTE: Authority cited: Sections 54, 55 and 3702.10, Labor Code. Reference: Sections 59, 129, 3700, 3701, 3701.5, 3702, 3702.5, 3702.6, 3702.10, 3703, 3705 and 3740-3744, Labor Code.

HISTORY

1. New section filed 11-19-75; effective thirtieth day thereafter (Register 75, No. 47).

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

3. Amendment filed 12-22-92; operative 1-21-93 (Register 93, No. 2).