What are California’s laws on self insurance

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Asked January 18, 2017

1 Answer


California allows certain individuals and businesses to self-insure, which means that they are financially responsible for covering their own losses and liabilities, rather than purchasing insurance from a traditional insurance provider. Self-insurance can be a viable option for entities with significant financial resources and low risk profiles. In California, self-insurance is primarily regulated by the Department of Industrial Relations' Office of Self-Insurance Plans (OSIP). The OSIP oversees the administration and management of self-insurance plans for workers' compensation, group health, and automobile liability coverage. To qualify for self-insurance in California, an entity must meet certain eligibility requirements, which vary depending on the type of coverage being sought. For example, to self-insure for workers' compensation, an employer must have a net worth of at least $5 million and maintain a security deposit with the state. In addition to meeting eligibility requirements, self-insured entities in California must also comply with a range of regulatory requirements, including filing regular financial reports and maintaining adequate reserves to cover potential losses. The OSIP may also conduct periodic audits to ensure compliance with state regulations. Overall, self-insurance can be a complex and demanding process, and entities considering this option should consult with experienced professionals to assess their eligibility and ensure that they are able to meet all regulatory requirements.

Answered January 21, 2017 by teddyx

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