California Labor Codes 3702.8
§ 3702.8 Former self-insured; obligations
(a) Employers who have ceased to be self-insured employers shall discharge their continuing obligations to secure the payment of workers' compensation that accrued during the period of self-insurance, for purposes of Sections 3700, 3700.5, 3706, and 3715, and shall comply with all of the following obligations of current certificate holders: (1) Filing annual reports as deemed necessary by the director to carry out the requirements of this chapter. (2) In the case of a private employer, depositing and maintaining a security deposit for accrued liability for the payment of any workers' compensation that may become due, pursuant to subdivision (b) of Section 3700 and Section 3701, except as provided in subdivision (c). (3) Paying within 30 days all assessments of which notice is sent, pursuant to subdivision (b) of Section 3745, within 36 months from the last day the employer's certificate of self-insurance was in effect. Assessments shall be based on the benefits paid by the employer during the last full calendar year of self-insurance on claims incurred during that year.
(b) In addition to proceedings to establish liabilities and penalties otherwise provided, a failure to comply may be the subject of a proceeding before the director. An appeal from the director's determination shall be taken to the appropriate superior court by petition for writ of mandate.
(c) Notwithstanding subdivision (a), any employer who is currently self-insured or who has ceased to be self-insured may purchase a special excess workers' compensation policy to discharge any or all of the employer's continuing obligations as a self-insurer to pay compensation or to secure the payment of compensation. (1) The special excess workers' compensation insurance policy shall be issued by an insurer authorized to transact workers' compensation insurance in this state. (2) Each carrier's special excess workers' compensation policy shall be approved as to form and substance by the Insurance Commissioner, and rates for special excess workers' compensation insurance shall be subject to the filing requirements set forth in Section 11735 of the Insurance Code. (3) Each special excess workers' compensation insurance policy shall be submitted by the employer to the director. The director shall adopt and publish minimum insurer financial rating standards for companies issuing special excess workers' compensation policies. (4) Upon acceptance by the director, a special excess workers' compensation � policy shall provide coverage for all or any portion of�the � purchasing employer's claims for compensation arising out of�injuries � occurring during the period the employer was self-insured in�accordance � with Sections 3755, 3756, and 3757 of the Labor Code and�Sections � 11651 and 11654 of the Insurance Code. The director's�acceptance � shall discharge the Self-Insurer's Security Fund, without�recourse � or liability to the Self-Insurer's Security Fund, of any�continuing � liability for the claims covered by the special excess�workers' � compensation insurance policy. � � (5) For public employers, no security deposit or financial�guarantee � bond or other security shall be required. The director�shall � set minimum financial rating standards for insurers issuing�special � excess workers' compensation policies for public employers.
(d) (1) In order for the special excess workers' compensation�insurance � policy to discharge the full obligations of a private�employer � to maintain a security deposit with the director for the�payment � of self-insured claims, applicable to the period to be�covered � by the policy, the special excess policy shall provide�coverage � for all claims for compensation arising out of that�liability. � The employer shall maintain the required deposit for the�period � covered by the policy with the director for a period of three�years � after the issuance date of the special excess policy. � � (2) If the special workers' compensation insurance policy does not�provide � coverage for all of the continuing obligations for which the�private � self-insured employer is liable, to the extent the employer'�s � obligations are not covered by the policy a private employer shall�maintain � the required deposit with the director. In addition, the�employer � shall maintain with the director the required deposit for�the � period covered by the policy for a period of three years after�the � issuance date of the special excess policy.
(e) The director shall adopt regulations pursuant to Section� 3702.10 � that are reasonably necessary to implement this section in�order � to reasonably protect injured workers, employers, the�Self-Insurers' � Security Fund, and the California Insurance Guarantee�Association.
(f) The posting of a special excess workers' compensation�insurance � policy with the director shall discharge the obligation of�the � Self-Insurer's Security Fund pursuant to Section 3744 to pay�claims � in the event of an insolvency of a private employer to the�extent � of coverage of compensation liabilities under the special�excess � workers' compensation insurance policy. The California�Insurance � Guarantee Association shall be advised by the director�whenever � a special excess workers' compensation insurance policy is�posted.