Chapter 4.5. Division of Workers' Compensation
Subchapter 1. Administrative Director--Administrative Rules
Article 1.6. Ethical Standards of Workers' Compensation Referees; Enforcement of Standards

§9721.21. Restriction on Investments.

(a) A workers' compensation administrative law judge may not have an ownership interest in, either in his individual capacity or as a fiduciary, and may not purchase an interest in, an insurance carrier which either writes policies of workers' compensation insurance to employers in the state of California or is authorized to write policies of workers' compensation insurance to employers in the state of California.

(b) A workers' compensation administrative law judge who, as of the date this regulation becomes effective, has an interest in an insurance company described in subdivision (a), shall dispose of the interest or terminate the fiduciary relationship within one year of the date this regulation becomes effective.

(c) A workers' compensation administrative law judge who acquires an interest in an insurance company described in subdivision (a) through gift, inheritance or devise, or by becoming a fiduciary for a person, estate, or trust which has an interest in such an insurance company, shall dispose of the acquired interest or terminate the fiduciary relationship within one year.

(d) Upon application by a workers' compensation administrative law judge who acquired an interest in an insurance company described in subdivision (a) through gift, inheritance or devise, or by becoming a fiduciary for a person, estate, or trust which has an interest in such an insurance company, and upon the showing of hardship to the judge or to the person, trust, or estate for whom the judge is serving as fiduciary, the Administrative Director may grant an extension of time to dispose of the acquired interest or to terminate the fiduciary relationship or may grant an exemption if the value of the interest is de minimus.

(e) The obligation of a workers' compensation administrative law judge under the California Code of Judicial Ethics to "manage personal investments and financial activities so as to minimize the necessity for disqualification" includes the obligation not to acquire or hold investments in self-insured employers who are reasonably likely to be defendant employers in cases at the district office where the judge is usually employed.

(f) An ownership interest in a corporation which owns, wholly or in part, an insurance carrier which either writes policies of workers' compensation insurance to employers in the state of California or is authorized to write policies of workers' compensation insurance to employers in the state of California, is not an ownership interest in that insurance carrier. This subdivision shall not affect a judge's disqualification or obligation to disclose.

   Note: Authority cited: Sections 123.6, 133 and 5307.3, Labor Code. Reference: Sections 111 and 123.6, Labor Code.

 HISTORY 

   

1. New section filed 8-25-2008; operative 9-24-2008 (Register 2008, No. 35).