CA SIP Exam -Self-Insurance Part 2 Questions and Correct Answers
Course
CA SIP
Institution
CA SIP
How long does Self-Insurance Plans have to notify you that your application for self-insurance is deficient? 14 days
SOLVENCY REQUIREMENT PRE 2017:
Prior to 2017 the solvency requirement in &1503.2 for private self-insurers was: - $5 million net worth - Average net profits of $500,000 - For the p...
CA SIP Exam -Self-Insurance Part
2 Questions and Correct Answers
How long does Self-Insurance Plans have to notify you that your application for self-
insurance is deficient? ✅14 days
SOLVENCY REQUIREMENT PRE 2017:
Prior to 2017 the solvency requirement in &1503.2 for private self-insurers was: ✅- $5
million net worth
- Average net profits of $500,000
- For the past 5 years
Also known as "The Five, Five and Five Rule."
You are applying for a master certificate after July 1, 1994. What is the amount of net
worth and net income needed to qualify for self-insurance? ✅Since this is based on
the requirement prior to 2017:
- $5,000,000 net worth and average net income for the past five years of at least
$500,000.
The certificate of Consent to self-insure for a public or individual private employer shall
be initially valid for: ✅6 months after the date of approval by the director.
What happens if a self-insurer has not initiated its self-insurance program within the
initial 6 month period? ✅The approval of certificate to self-insure shall be void and a
new application shall be filed for approval.
Once an ER has initiated a self-insurance program, the ER's certificate to self-insure is:
✅Valid until revoked by the Director.
Reapplication to the Director for a certificate of consent o self-insure is required if an
employer: ✅Fails to initiate a self-insurance program within 6 months.
A public or individual private self-insured ER shall notify the chief in writing within: ✅30
days of amendment that changes its business, if the self-insurer decides to stop doing
business, if the self-insurer wishes to retain its self-insurance status.
You do not have to notify the chief of a change in status where: ✅The self-insurer has
a change in minority shareholders.
, Current and former self-insurers (Private) that are required to file a self-insurer's Annual
Report, shall cause a qualified actuary to submit on their behalf to the Office of Self-
Insurance Plans (OSIP) no later than: ✅May 1st of of each calendar year with a
valuation date of December 31st of the immediate prior calendar year.
Private self-insurers shall not be required to file an actuarial study or actuarial summary
in years when their current year filed Self-insurer's Reports either: ✅A) 10 or fewer
open claims
Or
B) Less than 1 million of total estimated future liabilities
What does the actuarial study identify? ✅The self-insurer's losses at the undiscounted
"expected level" such as the incurred but not reported liabilities, allocated loss
adjustment expense, unallocated loss adjusted expense and case reserves.
The minimum required security deposit pusuant to LC 3701 for existing, private self-
insurers shall be equal to: ✅The self-insurer's losses at the undiscounted expected
level.
The ER has an aggregate excess (stop loss) workers' compensation policy. Does the
ER receive credit against the security deposit? ✅No
If the self-insurer wishes to appeal the chief's decision increase security deposit due to
impaired financial condition, then: ✅The chief shall order a detailed, third party
financial evaluation of the self-insurer to determine the ER's financial strength.
Surety bonds shall be accepted by the chief only if written by an: ✅Admitted surety
insurer as defined by the California Code of Civil Procedure.
A surety bond underwritten by an organization owned and/or controlled by the self
insurer, who is also the principal on the surety bond, shall be: ✅Rejected by the chief
unless the surety company is financially independent of its parent.
Approved securities shall be only those securities which meet the following: ✅1)
Securities are corporate or federal, state or municipal government bonds or notes in a
book entry form, having a rating of AA or better by standard.
2) Securities shall be delivered in the name of the "Treasurer, State of California in
trust"
3) Securities previously accepted and registered in the name of "Treasurer of State of
California" shall not have to be reregistered, but will be held until maturity or released by
order of the Manager of Director.
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