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Chapter 8. Office of the Director
Subchapter 2.06. Workers' Compensation-Administration Revolving Fund Assessment, Uninsured Employers Benefits Trust Fund Assessment, Subsequent Injuries Benefits Trust Fund Assessments, Fraud Surcharge and Cal-OSHA Targeted Inspection Assessment
Article 3. Collection of Assessments and/or Surcharges

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§ 15609. Credit for Undercollection.

(a) When an insurer demonstrates to the Director, within one year of the final audit conducted for premium adjustments for the policies with inception dates in the year subject to assessment, that the total assessments and/or surcharges, respectively, collected from its insured employers is less than the respective assessment and surcharge amounts advanced by the insurer under Section 15606 for that assessment year, the Director shall credit the amount of the difference against the subsequent year's respective advances due from the insurer on behalf of its insured employers.
(1) When an insurer demonstrates, to the satisfaction of the Director, within one year of the final audit conducted for premium adjustments for the policies with inception dates in the year subject to assessment, that it has accrued credit(s) for one or more assessments and/or surcharges in an amount that cannot be effectively utilized in a five year period to offset the specific assessment(s) and/or surcharge(s) on which the credit(s) accrued, the Director may, in his or her sole discretion, and to the extent that the Director finds that sufficient funds are available for this purpose without impairing the fiscal integrity of the programs funded by the respective assessment(s) and/or surcharge(s), refund the excess credit(s) in whole or in part. The Director may, in his or her sole discretion, structure the refund(s) over a period of from one to five years.
(2) When an insurance group, as defined in section 15600, subdivision (j), demonstrates good cause to the satisfaction of the Director, within one year of the final audit conducted for premium adjustments for the policies with inception dates in the year subject to assessment, that one or more members of the group has accrued excess credits in an amount cannot be effectively utilized in a five year period to offset the specific assessment(s) and/or surcharge(s) on which the credit(s) accrued, the Director may, in his or her sole discretion, allow the transfer of those excess credits from company to company within the group, for the specific assessment(s) and/or surcharge(s) on which the excess credit(s) accrued. The Director may, in his or her sole discretion, structure the transfer(s) over a period of from one to five years. Any credit transferred under this subdivision may only be used to offset the next year's assessment(s) and/or surcharge(s) after the credit is transferred.
(3) For purposes of subdivision (a)(2) above, “good cause” includes, but is not limited to, one or more individual insurers with excess credit, as defined in subdivision (a)(2), within the group withdrawing from the California market.
(b) No insurer shall receive any credit for any portion of an undercollection against advances paid by that insurer that is due to the insurer's failure to properly bill a policyholder for the appropriate assessments and/or surcharges applicable to the premium for that policyholder's policy.
Note: Authority cited: Sections 54, 55 and 62.5, Labor Code; and Section 1872.83, Insurance Code. Reference: Sections 62.5 and 62.6, Labor Code; and Section 1872.83, Insurance Code.
HISTORY
1. New section filed 4-18-90 as an emergency; operative 4-18-90 (Register 90, No. 18). A Certificate of Compliance must be transmitted to OAL within 120 days or emergency language will be repealed by operation of law on 8-16-90.
2. Certificate of Compliance as to 4-18-90 order including amendment transmitted to OAL 8-14-90 and filed 9-13-90 (Register 90, No. 43).
3. Repealer of former section 15609 and renumbering and amendment of former section 15608 to section 15609 filed 1-15-93 as an emergency; operative 1-15-93 (Register 93, No. 3). A Certificate of Compliance must be transmitted to OAL 5-17-93 or emergency language will be repealed by operation of law on the following day.
4. Certificate of Compliance as to 1-15-93 order transmitted to OAL 5-10-93 and filed 6-16-93 (Register 93, No. 25).
5. Amendment of section and Note filed 9-6-94 as an emergency; operative 9-6-94 (Register 94, No. 36). A Certificate of Compliance must be transmitted to OAL by 1-4-95 or emergency language will be repealed by operation of law on the following day.
6. Certificate of Compliance as to 9-6-94 order including amendment of section transmitted to OAL 12-30-94 and filed 2-15-95 (Register 95, No. 7).
7. Amendment filed 5-8-96; operative 5-8-96 pursuant to Government Code section 11343.4(d) (Register 96, No. 19).
8. New subsection (a) designator and new subsection (b) filed 11-10-97; operative 11-10-97 pursuant to Government Code section 11343.4(d) (Register 97, No. 46).
9. Change without regulatory effect amending section and Note filed 12-15-99 pursuant to section 100, title 1, California Code of Regulations (Register 99, No. 51).
10. Amendment of section and Note filed 1-14-2000 as an emergency; operative 1-14-2000 (Register 2000, No. 2). A Certificate of Compliance must be transmitted to OAL by 5-15-2000 or emergency language will be repealed by operation of law on the following day.
11. Certificate of Compliance as to 1-14-2000 order transmitted to OAL 5-9-2000 and filed 6-15-2000 (Register 2000, No. 24).
12. New subsections (a)(1)-(3) filed 10-21-2015; operative 10-21-2015. Submitted to OAL for filing and printing only pursuant to Labor Code section 62.5(f)(5) (Register 2015, No. 43).


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