Chapter 8. Office of the Director
Subchapter 2. Administration of Self-Insurance Plans
Article 13. Group Self-Insurance

§15480. Termination of Membership in a Group Self-Insurer.

(a) No member of a group self-insurer may be involuntarily canceled or terminated from group membership by the group self-insurer unless at least 45 days advance written notice has been provided to the group member and to the Chief. Notice to a broker or other third party shall not be deemed as notice to the group member.

(b) In the case of cancellation or termination of coverage of a group member, whether voluntary or involuntary, the group self-insurer shall remain liable for all compensation liabilities of the group member resulting from any claim with a date of injury during the period of membership in the group self-insurer up to the effective date of the termination and revocation of the group member's Affiliate Certificate of Consent to Self-Insure, including the 45 day notice period in the event of involuntary termination. The group member shall remain responsible for all contributions and assessments for the period of membership in the private group self-insurer, including the 45 day notice period and/or any period during which the termination and revocation of the group member's Affiliate Certificate of Consent to Self-Insure was under appeal.

(c) Notwithstanding subsection (b), the following provisions apply in the case of the cancellation or termination of membership of a member in a group self-insured group, whether voluntary or involuntary:

(1) The group self-insurer shall not incur liability for any claim of a member incurred on or after the date a member obtains coverage through a standard workers' compensation policy issued by an admitted carrier.

(2) Liabilities of a group member may be transferred pursuant to Labor Code Section 3702.8 and/or Article 8, Section 15360 of these regulations.

(d) Notice to the Chief of involuntary cancellation or termination of a group member from a group self-insurer as set forth in subsection (a) shall be good cause for revocation of the Affiliate Certificate issued to the group member on the applicable effective date of the involuntary cancellation or termination date without issuance of further notice from the Chief.

(e) Any group member leaving a group self-insurer shall provide proof of workers' compensation coverage to the Chief and to the group self-insurer within 45 days after the notice of cancellation or termination. Notice to the Chief may be provided by the group self-insurer, the Group Administrator, or the group member. However, if the group member no longer has employees in California, the group member or group self-insurer shall notify the Chief and no proof of insurance need be provided. Unless the group member no longer has employees in California, the Chief shall notify the Labor Commissioner of any group member that voluntarily or involuntarily leaves a private group self-insurer and has failed to provide proof of coverage for workers' compensation liabilities in the form of a binder or certificate of insurance within 45 days after the notice of cancellation or termination.

(f) Any member of a group self-insurer may voluntarily withdraw from the group self-insurer at the end of a program year after obtaining alternate coverage and providing written notice to the Group Administrator of its intent to voluntarily end its participation in the group self-insurer. Notwithstanding this section, the group self-insurer's bylaws may require periods of membership longer than one year and, except as specified by Section 15473(d)(2), may specify penalties, loss of any return of surplus funds, or other sanctions for early termination of group membership.

(g) Any member of a group self-insurer that is involuntarily revoked by the group for non-payment of any member contribution or assessment must bring current all outstanding unpaid amounts in order to exercise their right to appeal the notice of intent to revoke.

Note: Authority cited: Sections 54, 55 and 3702.10, Labor Code. Reference: Sections 3700, 3701, 3701.5, 3702 and 3702.10, Labor Code.

HISTORY

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 section heading and subsections (a)-(b) and (d)-(e) and new subsection (g) filed 12-14-2016; operative 1-1-2017 pursuant to Government Code section 11343.4(b)(3) (Register 2016, No. 51).