Section 3701.7 Of Article 1. Insurance And Security From California Labor Code >> Division 4. >> Part 1. >> Chapter 4. >> Article 1.
3701.7
. Where any employer requesting coverage under a new or
existing certificate of consent to self-insure has had a period of
unlawful uninsurance, either for an applicant in its entirety or for
a subsidiary or member of a joint powers authority legally
responsible for its own workers' compensation obligations, the
following special conditions shall apply before the director may
determine if the requesting employer can operate under a certificate
of consent to self-insure:
(a) The director may require a deposit of not less than 200
percent of the outstanding liabilities remaining unpaid at the time
of application, which had been incurred during the uninsurance
period.
(b) At the discretion of the director, where a public or private
employer has been previously totally uninsured for workers'
compensation pursuant to Section 3700, the director may require an
additional deposit not to exceed 100 percent of the total outstanding
liabilities for the uninsured period, or the sum of two hundred
fifty thousand dollars ($250,000), whichever is greater.
(c) In addition to the deposits required by subdivisions (a) and
(b), a penalty shall be paid to the Uninsured Employers Fund of 10
percent per year of the remaining unpaid liabilities, for every year
liabilities remain outstanding. In addition, an additional
application fee, not to exceed one thousand dollars ($1,000), plus
assessments, pursuant to Section 3702.5 and subdivision (b) of
Section 3745, may be imposed by the director and the Self-Insurers'
Security Fund, respectively, against private self-insured employers.
(d) A certificate of consent to self-insure shall not be granted
to an applicant that has had a period of unlawful uninsurance without
the written approval of the Self-Insurers' Security Fund.
(e) An employer may retrospectively insure the outstanding
liabilities arising out of the uninsured period, either before or
after an application for self-insurance has been approved. Upon proof
of insurance acceptable to the director, no deposit shall be
required for the period of uninsurance.
The penalties to be paid to the Uninsured Employers Fund shall
consist of a one-time payment of 20 percent of the outstanding
liabilities for the period of uninsurance remaining unpaid at the
time of application, in lieu of any other penalty for being
unlawfully uninsured pursuant to this code.
(f) In the case of a subsidiary which meets all of the following
conditions, a certificate shall issue without penalty:
(1) The subsidiary has never had a certificate revoked for reasons
set forth in Section 3702.
(2) Employee injuries were reported to the Office of
Self-Insurance Plans in annual reports.
(3) The security deposit of the certificate holder was calculated
to include the entity's compensation liabilities.
(4) Application for a separate certificate or corrected
certificate is made within 90 days and completed within 180 days of
notice from the Office of Self-Insurance Plans. If the requirements
of this subdivision are not met, all penalties pursuant to
subdivision (b) of Section 3702.9 shall apply.
(g) The director may approve an application on the date the
application is substantially completed, subject to completion
requirements, and may make the certificate effective on an earlier
date, covering a period of uninsurance, if the employer complies with
the requirements of this section.
(h) Any decision by the director may be contested by an entity in
the manner provided in Section 3701.5.
(i) Nothing in this section shall abrogate the right of an
employee to bring an action against an uninsured employer pursuant to
Section 3706.
(j) Nothing in this statute shall abrogate the right of a
self-insured employer to insure against known or unknown claims
arising out of the self-insurance period.