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Chapter 8. Office of the Director
Subchapter 2. Administration of Self-Insurance Plans
Article 3. Security Deposit Requirements
§15211.2. Guaranty of Workers' Compensation Liabilities.
(a) At the discretion of the Chief, the Workers' Compensation liabilities of a public, a private individual, subsidiary, or affiliate self-insurer may be assumed and guaranteed in whole or part by any other legal entity or person.
(b) The Guaranty of Workers' Compensation Liabilities shall be written upon a form provided by the Chief (Form A-4 (1-2016)). The form is contained in Plate D of the Appendix following Section 15463 of these regulations and is available on the website of the Office of Self-Insurance Plans at http://dir.ca.gov/osip/.
(c) Regardless of whether an individual private affiliate or subsidiary or the self-insurer's parent company's financial condition is relied upon to qualify the subsidiary or affiliate for self-insurance, the holding company, ultimate parent corporation, controlling partners, owner, or other controlling entity acceptable to the Chief shall execute a Guaranty of Workers' Compensation Liabilities on behalf of the affiliate or subsidiary. In the event that the holding company, ultimate parent corporation, controlling partners, owner, or other controlling entity declines to execute a Guaranty of Workers' Compensation Liabilities, the Chief may require an increase in the self-insurer's security deposit requirement pursuant to Section 15203.1 of these regulations.
(d) A corporate guarantor shall provide a Board of Directors resolution which authorizes the Guaranty of Workers' Compensation Liabilities of the affiliated or subsidiary company or public agency. The board resolution shall grant signature authority to the person or position title of the person signing the Guaranty of Workers' Compensation Liabilities.
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 Chief 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 Section 15463 of these regulations.
(e) In the event that a public self-insurer or individual private self-insurer reincorporates, merges, or changes its identity, the surviving entity shall execute a new Guaranty of Workers' Compensation 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 Guaranty of Workers' Compensation Liabilities for a subsidiary or affiliate self-insurer provided such foreign entity:
(1) executes in the English language the Guaranty of Workers' Compensation Liabilities and the assumption resolution; and
(2) includes a statement in the Guaranty of Workers' Compensation Liabilities that, in the event of the Director's need to enforce the Guaranty of Workers' Compensation Liabilities 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 administrative agencies; and
(B) become controlled by California law in the resolution of any dispute under the assumption and guarantee agreement.
(g) Execution of Guaranty of Workers' Compensation Liabilities shall not reduce the amount of security deposit required to be posted by any self-insurer as set forth in Sections 15210 and 15210.1.
(h) A Guaranty of Workers' Compensation Liabilities executed pursuant to this section may be terminated only upon the express written consent of both the Director and the Security Fund. Termination shall be effective upon the Guarantor's receipt of such express written consent. Termination shall not extinguish the Guarantor's continuing liability for any default of the guaranteed self-insurer in fully discharging all existing and potential Workers' Compensation liability on account of any injury suffered by any of the guaranteed self-insurer's employees prior to the date of termination.