2009 California Insurance Code - Section 11690-11703 :: Article 1. Deposits By Workers' Compensation Insurers

INSURANCE CODE
SECTION 11690-11703

11690.  For purposes of this article:
   (a) "Compensable workers' compensation claim" means a claim where
the claimant is entitled to benefits under the workers' compensation
law of the state.
   (b) "Delinquency proceeding" means any proceeding commenced
against an insurer for the purpose of liquidating, rehabilitating,
reorganizing, or conserving that insurer, where there has not been a
court order finding the insurer insolvent.
   (c) "Receiver" means liquidator, rehabilitator, or conservator, as
appropriate.

11691.  (a) In order to provide protection to the workers of this
state in the event that the insurers issuing workers' compensation
insurance to employers fail to pay compensable workers' compensation
claims when due, except in the case of the State Compensation
Insurance Fund, every insurer desiring admission to transact workers'
compensation insurance, or workers' compensation reinsurance
business, or desiring to reinsure the injury, disablement, or death
portions of policies of workers' compensation insurance under the
class of disability insurance shall, as a prerequisite to admission,
or ability to reinsure the injury, disablement, or death portion of
policies of workers' compensation insurance under the class of
disability insurance, deposit cash instruments or approved
interest-bearing securities or approved stocks readily convertible
into cash, investment certificates, or share accounts issued by a
savings and loan association doing business in this state and insured
by the Federal Deposit Insurance Corporation, certificates of
deposit or savings deposits in a bank licensed to do business in this
state, or approved letters of credit that perform in material
respects as any other security allowable as a form of deposit for
purposes of a workers' compensation deposit and that meet the
standard set forth in Section 922.5, or approved securities
registered with a qualified depository located in a reciprocal state
as defined in Section 1104.9, with that deposit to be in an amount
and subject to any exceptions as set forth in this article. The
deposit shall be made from time to time as demanded by the
commissioner and may be made with the Treasurer, or a bank or savings
and loan association authorized to engage in the trust business
pursuant to Division 1 (commencing with Section 99) or Division 2
(commencing with Section 5000) of the Financial Code, or a trust
company. A deposit of securities registered with a qualified
depository located in a reciprocal state as defined in Section 1104.9
may only be made in a bank or savings and loan association
authorized to engage in the trust business pursuant to Division 1
(commencing with Section 99) or Division 2 (commencing with Section
5000) of the Financial Code, or a trust company, licensed to do
business and located in this state that is a qualified custodian as
defined in paragraph (1) of subdivision (a) of Section 1104.9 and
that maintains deposits of at least seven hundred fifty million
dollars ($750,000,000). The deposit shall be made subject to the
approval of the commissioner under those rules and regulations that
he or she shall promulgate. The deposit shall be maintained at a
deposit value specified by the commissioner, but in any event no less
than one hundred thousand dollars ($100,000), nor less than the
reserves required of the insurer to be maintained under any of the
provisions of Article 1 (commencing with Section 11550) of Chapter 1
of Part 3 of Division 2, relating to loss reserves on workers'
compensation business of the insurer in this state, nor less than the
sum of the amounts specified in subdivision (a) of Section 11693,
whichever is greater. The deposit shall be for the purpose of paying
compensable workers' compensation claims under policies issued by the
insurer or reinsured by the admitted reinsurer and expenses as
provided in Section 11698.02, in the event the insurer or reinsurer
fails to pay those claims when they come due. If the insurer
providing the deposit is domiciled in a state where a state statute,
regulation, or court decision provides that, with respect to covered
claims within the deductible amount that are paid by a guarantee
association after the entry of an order of liquidation under large
deductible workers' compensation policies, any part of the
reimbursement proceeds, other than the reasonable expenses of the
receiver related to treatment of deductible policy arrangements of
insurance companies in liquidation, owed by insureds on those
deductible amounts, whether paid directly or through a draw of
collateral, are general assets of the estate, then the amount of the
insurer's deposit pursuant to this article shall be calculated based
on the gross amount of that insurer's liabilities for loss and loss
adjustment expenses under those policies without regard to the
deductible, and those reserves shall not be reduced by any collateral
or reimbursement obligations insureds were required to provide under
those policies.
   Nothing in this section shall require that the deposit be
calculated based on gross amounts of liabilities described above if
the domiciliary state does not have an existing statute, regulation,
or court decision providing that the reimbursement proceeds described
above are general assets of the estate.
   (b) Each insurer or reinsurer desiring to have the ability to
reinsure the injury, disablement, or death portions of policies of
workers' compensation under the class of disability insurance shall
provide prior notice to the commissioner, in the manner and form
prescribed by the commissioner of its intent to reinsure that
insurance. In the event of late notice, a late filing fee shall be
imposed on the reinsurer pursuant to Section 924 for failure to
notify the commissioner of its intent to reinsure workers'
compensation insurance.
   (c) If the deposit required by this section is not made with the
Treasurer, then the depositor shall execute a trust agreement in a
form approved by the commissioner between the insurer, the
institution in which the deposit is made or, where applicable, the
qualified custodian of the deposit, and the commissioner, that grants
to the commissioner the authority to withdraw the deposit as set
forth in Sections 11691.2, 11696, 11698, and 11698.3. The insurer
shall also execute and deliver in duplicate to the commissioner a
power of attorney in favor of the commissioner for the purposes
specified herein, supported by a resolution of the depositor's board
of directors. The power of attorney and director's resolution shall
be on forms approved by the commissioner, shall provide that the
power of attorney cannot be revoked or withdrawn without the consent
of the commissioner, and shall be acknowledged as required by law.
   (d) (1) The commissioner shall require payment in advance of fees
for the initial filing of a trust agreement with a bank, savings and
loan association, or trust company on deposits made pursuant to
subdivision (a); for each amendment, supplement, or other change to
the deposit agreement; for receiving and processing deposit schedules
pursuant to this section; and for each withdrawal, substitution, or
any other change in the deposit. The fees shall be set forth in the
department's Schedule of Fees and Charges.
   (2) The commissioner shall require payment in advance of a fee for
the initial filing of each letter of credit utilized pursuant to
subdivision (a). In addition, the commissioner shall require payment
in advance of a fee for each amendment of a letter of credit. The
fees shall be set forth in the department's Schedule of Fees and
Charges.
   (e) Any workers' compensation insurer that deposits cash or cash
equivalents pursuant to this section shall be entitled to a prompt
refund of those deposits in excess of the amount determined by the
commissioner pursuant to subdivision (a). The commissioner shall
cause to be refunded any deposits determined by the commissioner to
be in excess of the amount required by subdivision (a) within 30 days
of that determination. In the alternative, an insurer may use any
excess deposit funds to offset a demand by the commissioner to
increase its deposit due to the failure of a reinsurer to make a
deposit pursuant to this section.
   (f) (1) As of January 1, 2003, an admitted insurer reinsuring
business covered in this article (hereafter referred to as reinsurer)
shall identify to the commissioner, in a form prescribed by the
commissioner, amounts deposited for credit in the name of each ceding
insurer.
   (2) Beginning January 1, 2005, all reinsurance agreements covering
claims and obligations under business covered by this article, and
allowable for purposes of granting a ceding carrier a deposit credit,
shall include a provision granting the commissioner, in the event of
a delinquency proceeding, receivership, or insolvency of a ceding
insurer, any sums from a reinsurer's deposit that are necessary for
the commissioner to pay those reinsured claims and obligations, or to
ensure their payment by the California Insurance Guarantee
Association, deemed by the commissioner due under the reinsurance
agreement, upon failure of the reinsurer for any reason to make
payments under the policy of reinsurance. The commissioner shall give
30 days' notice prior to drawing upon these funds of an intent to do
so. Notwithstanding the commissioner's right to draw on these funds,
the reinsurer shall otherwise retain its right to determine the
validity of those claims and obligations and to contest their payment
under the reinsurance agreement. Prior to a reinsurer's deposit
being drawn upon, in whole or in part, by the department, the
department shall provide a reinsurer with an explanation of
procedures that a reinsurer may use to explain to the department why
the use of the reinsurer's deposit may not be appropriate under the
reinsurance agreement.
   (3) No reinsurer entering into a contract identified in paragraph
(2), beginning on or after January 1, 2005, may cede claims or
obligations assumed from a ceding insurer unless the deposit securing
the ceded claims or obligations is governed by paragraph (2) or,
upon approval of the commissioner, would secure the ceded claims or
obligations in all material respects and in the same manner as a
deposit identified in paragraph (2) above.
   (4) All sums received from the reinsurer by the commissioner for
those claims paid by the California Insurance Guarantee Association
shall be held separate and apart from and not included in the general
assets of the insolvent insurer, and shall be transferred to the
California Insurance Guarantee Association upon receipt by the
commissioner. In the event of a final judgment or settlement adverse
to the drawing of funds by the commissioner pursuant to paragraph (2)
or (3), the California Insurance Guarantee Association shall repay
funds it obtained to pay covered claims and shall, if necessary,
either levy a surcharge as needed or seek legislative approval to
levy the surcharge if the California Insurance Guarantee Association
is already levying the maximum surcharge permissible under law.
   (g) If a reinsurer has not maintained deposits as required by
subdivision (a) in amounts equal to the amounts of deposit credits
claimed by its ceding insurers, the commissioner, after notifying the
reinsurer and its ceding insurers of the deposit shortfall and
allowing 15 days from the date of the notice for the deposit
shortfall to be corrected, may disallow all or a portion of the
reserve credits claimed by the ceding insurers. A ceding insurer
disallowed a reserve credit pursuant to this provision shall
immediately make the deposit required by this section.
   (h) For interest-bearing securities that are debt securities and
include principal payment features prior to maturity that are
utilized pursuant to subdivision (a), all principal payments received
must be retained as part of the deposit.
   (i) Withdrawal of any amount of the deposit required under
subdivision (a) that results in a reduction of the required amount of
the deposit may only occur with the prior written consent of the
commissioner.

11691.1.  The fees for filing a schedule of securities with the
Treasurer, and making a deposit of the same, and for each withdrawal,
substitution, or any other change in the securities comprising this
deposit with the Treasurer, shall be paid to the commissioner for the
costs of review and approval of deposits, and shall be the same as
are prescribed by Article 11 (commencing with Section 939) of Chapter
1 of Part 2 of Division 1.
   All other reasonable charges made by the Treasurer for servicing
securities deposited with him or her shall be paid to the Treasurer
by the insurer that has deposited the security, and shall not be
charged to the commissioner.

11691.2.  The deposit required pursuant to Section 11691 shall be
security for the payment of the insurer's obligations on worker's
compensation insurance transacted in this state. The deposit shall
not be withdrawn except upon the written order of the commissioner to
use the proceeds thereof in payment of compensable worker's
compensation claims and expenses as provided in Section 11698.02, or
as otherwise provided in this article, but shall be forthwith payable
to the commissioner or at the direction of the commissioner by the
Treasurer or the bank, savings and loan association, or trust company
approved by the commissioner upon that order. No deposit so placed
with a bank, savings and loan association, or trust company shall be
subject to any lien or claim asserted by it or be subject to any
disposition obligation, demand, liability, cause of action, judgment,
or other claim, or cost or expense attendant thereon, other than as
is permitted by the commissioner. Notwithstanding any other
provisions of this code, the deposit shall be retained by the
Treasurer or the bank, savings and loan association, or trust company
approved by the commissioner and only released in accordance with
the provisions of this article or pursuant to regulations or a
written order of the commissioner.

11691.3.  The commissioner shall establish a list of all insurers or
reinsurers authorized to reinsure the injury, disablement, or death
portions of policies of workers' compensation insurance under the
class of disability insurance. An insurer or reinsurer shall be
authorized to reinsure the injury, disablement, or death portions of
policies of workers' compensation insurance under the class of
disability insurance if it has complied with Section 11691. The
commissioner shall publish a master list of those insurers or
reinsurers at least semiannually. Any insurer or reinsurer providing
the notification and deposit required by Section 11691, shall be
added by addendum to the list at the time of approval, and shall be
incorporated into the master list at the next date of publication.
The list and addenda required by this section shall be published so
that they are readily accessible to insurers and producers. The list
and addenda required by this section shall also contain a notice that
if an insurer enters into a contract of reinsurance with an insurer
or reinsurer reinsuring the injury, disablement, or death portions of
policies of workers' compensation insurance under the class of
disability insurance that is not authorized pursuant to this section,
the ceding insurer may not be able to claim that reinsurance for
reserve credit.

11692.  A certificate of authority to transact workers' compensation
insurance in this state shall not be issued nor renewed to any
insurer until the deposit required pursuant to Section 11691 is
approved by the commissioner.

11692.5.   On and after the effective date of this article, the
commissioner shall collect a late filing fee from any admitted
insurer or reinsurer that fails to deposit the securities when
required by this code in the following amount:
   (a) If the deposit shortfall is outstanding for less than 31 days,
0.5 percent of the deposit shortfall, but in no event not less than
six hundred dollars ($600).
   (b) If the deposit shortfall is outstanding for more than 30 days
but less than 61 days, an additional late filing fee in the amount of
1 percent of the deposit shortfall, but in no event not less than
one thousand two hundred dollars ($1,200) shall be due.
   (c) If the deposit shortfall is outstanding for 61 days or
greater, an additional late filing fee of 1.5 percent of the deposit
shortfall for every 30-day period thereafter, or fraction thereof,
but in no event shall this portion of the late filing fee for each
additional 30-day period or fraction thereof be less than three
thousand dollars ($3,000). The late filing fees provided herein are
in addition to all other rights and remedies granted the commissioner
by this article.

11693.  The deposit required pursuant to Section 11691 shall be
adjusted on or prior to March 31 of each year in an amount as
follows:
   (a) Not less than the sum of the following amounts computed, less
credits and deductions allowable with respect to reinsurance in
admitted insurers, as provided under Section 11691, as of the close
of the last preceding December 31 or as of any calendar quarter end
as directed by the commissioner pursuant to Section 11694 in respect
to workers' compensation insurance written subject to the workers'
compensation laws of this state:
   (1) The aggregate of the present values at 6 percent interest, or
at the rate of the company's investment yield as determined by the
NAIC Insurance Regulatory Information System Ratio Number 5 for
Property and Casualty Companies, whichever is lower, of the
determined and estimated future payments upon compensation claims not
included in paragraph (2), including in those claims both benefits
and loss expenses.
   (2) The aggregate of the amounts computed as follows:
   For each of the preceding three years, 65 percent of the earned
compensation premiums for that year less all loss and loss expense
payments made upon claims incurred in the corresponding year from
that 65 percent; except that the amount for each year shall not be
less than the present value at 6 percent interest of the determined
and the estimated unpaid claims incurred in that year, including both
benefits and loss expenses.
   (b) Not less than one hundred thousand dollars ($100,000).
   (c) If the aggregate amount computed under subdivision (a) exceeds
fifty thousand dollars ($50,000), not more than double the aggregate
amount.
   (d) The commissioner may utilize securities valuation software
programs or services to validate the value of securities held in
workers' compensation deposits of insurers authorized to transact
workers' compensation insurance in California as direct writers or
reinsurers, or reinsurers of workers' compensation under the class of
disability.

11694.  After the first annual statement to the commissioner
covering business of the insurer for a full year in this state, the
deposit required pursuant to Section 11691 shall be computed from the
figures shown in the last preceding report of business as of
December 31, filed with the commissioner, and shall be reported to
the commissioner on or before March 1 of each year in a form and
manner prescribed by the commissioner. Notwithstanding anything to
the contrary in this article, should the commissioner determine that
there has been a material change in the insurer's ultimate liability
for future payments upon compensable workers' compensation claims in
this state, at the commissioner's discretion, the amount of the
deposit shall then be fixed by the commissioner at the amount that he
or she deems sufficient to secure the payment of the insurer's
ultimate obligations on its workers' compensation insurance
transacted in this state, and upon notification from the commissioner
the insurer shall immediately, but in no event less than 30 days
after notification, increase the deposit as directed.

11694.5.  On or before March 1 and May 15 of each year, the insurers
or reinsurers subject to Section 11694 shall file a report in the
form and manner prescribed by the commissioner that valuates and
details the deposit as of December 31 of the preceding year and March
31 of the current year. The commissioner may require additional
reporting by any insurer or reinsurer when it is deemed necessary.

11695.  Where an admitted insurer has voluntarily ceased to do in
this state the business for which a deposit is required pursuant to
Section 11691, the deposit shall be fixed by the commissioner at the
amount that he or she deems sufficient for the protection of the
beneficiaries of the policies of that insurer.

11696.  In the event an insurer not in a delinquency proceeding
fails to pay any compensable workers' compensation claim against it,
or fails to pay, to the extent of its liability as a reinsurer, any
compensable workers' compensation claim covered by a policy wholly or
partly reinsured by it, the commissioner shall use the proceeds of
the deposit required pursuant to Section 11691 to pay all those
compensable workers' compensation claims and related expenses as
described in Section 11698.02.

11697.  The payment of a workers' compensation claim by the
commissioner shall constitute a satisfaction of the claim to the
extent of the payment made. In the event any judgment is entered on
the claim, the commissioner shall file a proportionate satisfaction
thereof in the office of the clerk of the court wherein the judgment
is entered.

11698.  (a) In the event any one of the eventualities described in
paragraph (1), (2), (3), or (4), transpires, the commissioner shall
immediately take control or possession of the deposit required
pursuant to Section 11691 and may use the deposit to pay or procure
the payment of those compensable workers' compensation claims against
the insurer, and those expenses described in Section 11698.02. The
proceeds of the deposit shall in that event inure to the commissioner
as a trust to be held separate and apart from all other assets of
the insurer held by the commissioner. They shall be used only for the
purposes set forth and in accordance with the procedures established
in this article. Once it is determined that there are no remaining
undischarged liabilities for compensable workers' compensation claims
or it is actuarially demonstrated that the deposit exceeds those
liabilities, the commissioner shall transfer the remaining amount of
the deposit to the general assets of the estate.
   (1) If the commissioner is named conservator of that insurer
pursuant to Article 14 (commencing with Section 1011) of Chapter 1 of
Part 2 of Division 1.
   (2) The proper court has appointed the commissioner ancillary
receiver of the insurer or reinsurer.
   (3) A delinquency proceeding has been instituted by the proper
court against the insurer or reinsurer.
   (4) If it appears to the commissioner that any of the conditions
set forth in Section 1011 exist or that irreparable loss and injury
to the property and business of the insurer or reinsurer has occurred
or may occur unless the commissioner acts immediately without notice
and before applying to the court for any order.
   (b) If the commissioner has proceeded under subdivision (a) or
Section 11696 or 11698.3 and a deposit of securities registered with
a qualified depository located in a reciprocal state and in the
custody of a qualified custodian pursuant to Section 1104.9 cannot be
released to the commissioner according to the terms of the agreement
entered into pursuant to Section 11691 or the requirements of
Section 11691.2 because of a delinquency proceeding initiated in the
reciprocal state in which the qualified depository is located, or, if
the deposit of securities registered with a qualified depository has
been executed upon at any time by any creditor of an insurer and
that execution has been affirmed by a written opinion of a court of
competent federal appellate jurisdiction, the commissioner may, after
a public hearing and upon a finding that deposits of securities
registered with that depository do not allow the commissioner to
discharge his or her responsibilities as set forth in this chapter,
require workers' compensation insurers authorized to transact
insurance in this state to cease and desist making any further
deposits authorized by Section 11691 in approved securities
registered with that depository. For the purposes of this
subdivision, the term "delinquency proceeding" shall have the same
meaning as contained in subdivision (b) of Section 1064.1.

11698.01.  When the commissioner is authorized to proceed under
Section 11698 he or she may do either of the following:
   (a) Subject to Sections 11698.2, 11698.21, and 11698.22, enter
into reinsurance and assumption agreements with one or more admitted
solvent workers' compensation insurers by the terms of which
liability for all those obligations is reinsured and assumed by such
insurer.
   (b) Use the deposit required pursuant to Section 11691 to pay or
procure payment of the insurer's compensable workers' compensation
claims and those expenses authorized in Section 11698.02.

11698.02.  The proceeds of the deposit required pursuant to Section
11691 shall be used solely to pay compensable workers' compensation
claims under the insured or reinsured policies, allocated claims
expense necessary to pay those claims, and the expenses connected
with all proceedings or actions permitted or required by this article
in furtherance of the payment of those claims, or should the
commissioner pursuant to subdivision (a) of Section 11698.01 enter
into reinsurance and assumption agreements with one or more
reinsurers, the proceeds of the deposit shall be used to reimburse
those reinsurers.

11698.1.  From time to time and in any event at or prior to the time
of the filing of his or her petition for discharge as receiver, the
commissioner shall do the following:
   (a) File with the Workers' Compensation Appeals Board an
accounting of all trust funds received and used from the proceeds of
the deposit required pursuant to Section 11691.
   (b) File with the court an accounting of all funds received and
used as expenses from the general funds of the insurer.

11698.2.  If the commissioner enters into a reinsurance and
assumption agreement as provided in subdivision (a) of Section
11698.01, that agreement shall provide for all of the following:
   (a) The reinsurance and assumption of all those obligations by the
reinsuring and assuming insurers.
   (b) If there is more than one reinsurer the proportion of all
those obligations assumed by each reinsurer and a method for the
actual processing and payment of those obligations by the reinsurers
or their representatives.
   (c) The reimbursement of the reinsuring and assuming insurers from
the deposit of the insurer in the delinquency proceeding. The
provision shall conform with Section 11698.21 and shall not be
effective unless approved by the Workers' Compensation Appeals Board.
   (d) The amounts, if any, to be paid the reinsurers from the
general funds of the insurer. If the agreement provides that amounts
from the general funds of the insurer are to be paid to the
reinsurers, those payments shall be approved by the court where the
delinquency proceedings are pending.
   (e) Any other matters as are necessary and proper to achieve the
purposes of the reinsurance and assumption agreement.

11698.21.  (a) The reimbursement provision referred to in
subdivision (c) of Section 11698.2 shall provide for the transfer of
the securities in the deposit to the deposits of the reinsurers.
Thereafter, except as provided in subdivision (b), the deposit of the
reinsuring and assuming insurers shall be security for the payment
of all of those obligations assumed by the agreement as well as those
obligations on workers' compensation insurance transacted in this
state by the reinsurer, provided, however, that in determining the
amount which shall remain on deposit as security for those
obligations that are reinsured and assumed, the method prescribed by
paragraph (1) of subdivision (a) of Section 11693 shall be used
without any limitation as to time. In providing for the transfer of
the securities the agreement may provide for their direct transfer to
the deposit account of the reinsurers, or, if the securities
deposited are in denominations or units as to make the equitable
transfer to more than one reinsurer impossible, it may provide either
for a formula under which the transfers may be made and differences
in value reconciled by payments or credits among the reinsurers or
for the sale of those securities by the commissioner and the
reinvestment of the proceeds in other securities in amounts that can
be so equitably transferred.
   (b) The agreement shall provide that if it appears that the market
value of the securities on deposit will exceed the obligations
assumed by the reinsurers, the commissioner may withhold the transfer
of a portion of the deposit and may after a two-year period enter
into a final settlement with the reinsurers with respect thereto at
which time any excess in that deposit shall be transferred to the
general assets of the insurer in the delinquency proceeding.

11698.22.  The commissioner shall not enter into an agreement with
an insurer if its reinsurance and assumption of liability will impair
its solvency or render its further transaction of business hazardous
under subdivision (d) of Section 1011.

11698.3.  (a) If the insurer is a member insurer of the California
Insurance Guarantee Association (the association) and has been the
subject of an order of liquidation or receivership with a finding of
insolvency which has been entered by a court of competent
jurisdiction the association then becomes obligated to pay
compensable workers' compensation claims arising under the insurer's
policies, which are otherwise "covered claims" as defined in Article
14.2 (commencing with Section 1063) of Chapter 1 of Part 2 of
Division 2. The commissioner shall immediately take control or
possession of the deposit required pursuant to Section 11691 and
shall transfer the deposit to the association.
   (b) The association shall use the proceeds of the deposit and any
interest earned thereon, for the payment of compensable workers'
compensation claims arising under the insolvent insurer's policies
and which are otherwise covered claims, as defined in Article 14.2
(commencing with Section 1063) of Chapter 1 of Part 2 of Division 2,
and all expenses related thereto.
   (c) The association shall make a full report and accounting of the
disposition of the deposit on or in the form and at the times as the
commissioner shall request, including a report of all interest
income earned on the deposit.
   (d) At the time all of the insolvent insurer's California workers'
compensation claims liabilities are discharged, or at the time it is
actuarially determined that the remaining proceeds, and any interest
earned thereon, exceed those liabilities, the association shall
return the surplus to the insolvent insurer's estate.

11699.  Unless the deposit required pursuant to Section 11691 is
withdrawn by the commissioner pursuant to the authority granted him
or her by this article, it, or any remainder thereof, may be repaid
to the insurer either upon satisfactory showing to the commissioner
that every liability to pay compensable workers' compensation claims
has been assumed and reinsured with a solvent admitted insurer or
fully paid and discharged. In the event the insurer remains admitted
for workers' compensation insurance, or desires to reinsure the
injury, disablement, or death portions of policies of workers'
compensation under the class of disability insurance, then it must
maintain at least the minimum deposit required by Section 11691.

11700.  The deposit required pursuant to Section 11691, unless
withdrawn by the commissioner, shall be used only for the payment of
compensable workers' compensation claims and expenses as provided in
Section 11698.02 as long as there remains unpaid any claim or any
part thereof.

11701.  The commissioner may revoke the certificate of authority to
transact workers' compensation insurance or to reinsure the injury,
disablement, or death portions of policies of workers' compensation
under the class of disability insurance in this state of any insurer
failing to comply with the requirements of this article. The power
vested in the commissioner by this section is additional to any and
all other powers and remedies vested in the commissioner by law.
Failure to make the deposit required by this article within the
required time shall be deemed to constitute a condition of hazard as
set forth in Section 1011.

11702.  The provisions of this article shall not apply to workers'
compensation insurance covering those persons defined as employees by
subdivision (d) of Section 3351 of the Labor Code.

11703.  An insurer desiring to write workers' compensation insurance
shall maintain or provide occupational safety and health loss
control consultation services pursuant to Section 6354.5 of the Labor
Code.


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