Cal. Code Regs. tit. 10 § 2509.80

Current through Register 2024 Notice Reg. No. 45, November 8, 2024

Section 2509.80 - Definitions

As used in this article:

(a) "Workers' Compensation Deductible Policy" means a policy, or any combination of one or more policies, endorsements or ancillary agreements, in which an insured has agreed with the insurer to be responsible to the insurer for any portion of any workers' compensation claim and, in some cases, the associated loss adjustment expense.

(b) "Workers' Compensation High Deductible Policy" means a Workers' Compensation Deductible Policy in which the portion of any workers' compensation claim and, if applicable, the associated loss adjustment expense, for which the insured agrees to be responsible to the insurer equals or exceeds one hundred thousand dollars ($100,000.00).

(c) "Insurer" means an insurer admitted in California for the class of workmen's compensation insurance as defined in Insurance Code section 109, and includes the State Compensation Insurance Fund.

(d) "Financial Statements" means the annual statements and quarterly filings required by Insurance Code section 900.

(e) "California Workers' Compensation Claim" means a claim for benefits subject to Chapter 3 of Part 1 of Division 4 of the Labor Code, commencing with Section 3600.

(f) "Open Workers' Compensation Claim" means a California Workers' Compensation Claim under a Workers' Compensation Deductible Policy for which there is any potential future liability.

(g) "Deductible Paid Loss" means the amount of loss paid by the insurer on each workers' compensation claim under a Workers' Compensation Deductible Policy, limited to a maximum value of the policy deductible.

(h) "California Deductible Paid Loss" means the amount of loss paid by the insurer on each California Workers' Compensation Claim under a Workers' Compensation Deductible Policy, limited to a maximum value of the policy deductible.

(i) "Allocated Loss Adjustment Expense" or "ALAE" means the cost of adjusting workers' compensation insurance claims that can be assigned specifically to an individual claim.

(j) "Deductible Incurred Loss" means the estimated final cost of each Open Workers' Compensation Claim, limited to a maximum value of the policy deductible, which pursuant to the terms of the policy may or may not include ALAE, under the Workers' Compensation Deductible Policy in question.

(k) "Aggregate Deductible Incurred Loss" means the estimated final cost, which pursuant to the terms of each policy may or may not include ALAE, of all Open Workers' Compensation Claims, and includes actuarially determined provisions for (1) incurred but not reported claims and (2) a bulk reserve for any shortfall in individual claim cost estimates. In the case of a policy whose terms specify that ALAE is included within the deductible, "Aggregate Deductible Incurred Loss" also includes a reserve for ALAE. "Aggregate Deductible Incurred Loss" includes the deductible portion of all claims that exceed the policy deductible, as well as the full value of all claims within the deductible.

(l) "Deductible Loss Reserves" means the Aggregate Deductible Incurred Loss less any Deductible Paid Loss.

(m) "California Deductible Reserves" means Deductible Loss Reserves for California Workers' Compensation Claims.

(n) "Deductible Ultimate Receivables" means any amounts of Deductible Paid Loss for which the employer has not fully reimbursed the insurer, plus any Deductible Loss Reserves, for the Workers' Compensation Deductible Policy in question.

(o) "California Deductible Ultimate Receivables" means any amounts of California Deductible Paid Loss for which the employer has not fully reimbursed the insurer, plus any California Deductible Reserves, for the Workers' Compensation Deductible Policy in question.

(p) "California Deductible Recoverable" means the California Deductible Ultimate Receivables minus the California Deductible Reserves.

(q) "Qualified United States Financial Institution" means a member of the Federal Reserve System that maintains a public debt rating of at least an A.M. Best Company rating of A-; a Standard & Poor's rating of A-; a Moody's Investors Service rating of A3; or a Fitch Ratings rating of A-.

(r) "Other-Line Coverage" means any and all insurance other than workers' compensation insurance, which the insured under a Worker's Compensation Deductible Policy procures from the Insurer that issues that Workers' Compensation Deductible Policy.

(s) "Other-Line Deductible Plan" means any and all policies of insurance providing Other-Line Coverage under which policy any amount of a claim other than a workers' compensation claim is to be paid first by the Insurer, who is then to be reimbursed by the insured.

(t) "Open Other-Line Claim" means a claim under an Other-Line Deductible Plan for which there is any potential future liability.

(u) "Other-Line Deductible Paid Loss" means the amount of loss paid by the insurer on each claim under an Other-Line Deductible Plan, limited to a maximum value of the policy deductible.

(v) "Other-Line Aggregate Deductible Incurred Loss" means the estimated final cost, which pursuant to the terms of each policy may or may not include ALAE, of all Open Other-Line Claims, and includes actuarially determined provisions for (1) incurred but not reported claims and (2) a bulk reserve for any shortfall in individual claim cost estimates. In the case of a policy whose terms specify that ALAE is included within the deductible, "Other-Line Aggregate Deductible Incurred Loss" also includes a reserve for ALAE. "Other-Line Aggregate Deductible Incurred Loss" includes the deductible portion of all claims that exceed the policy deductible, as well as the full value of all claims within the deductible.

(w) "Other-Line Deductible Loss Reserves" means the Other-Line Aggregate Deductible Incurred Loss less any Other-Line Deductible Paid Loss.

(x) "Other-Line Deductible Plan Ultimate Receivables" means any amounts of Other-Line Deductible Paid Loss for which the employer has not fully reimbursed the insurer, plus any Other-Line Deductible Loss Reserves, for the Other-Line Deductible Plan in question.

(y) "Multiline Deductible Loss Reserves" means the sum of the Deductible Loss Reserves and the Other-Line Deductible Loss Reserves.

(z) "Multiline Deductible Ultimate Receivables" means the sum of the Deductible Ultimate Receivables and the Other-Line Deductible Plan Ultimate Receivables.

(aa) "Multiline Deductible Recoverable" means the Multiline Deductible Ultimate Receivables minus the Multiline Deductible Loss Reserves.

(bb) "Surety" means the insurer issuing a surety bond.

Cal. Code Regs. Tit. 10, § 2509.80

1. New article 9.8 (sections 2509.80-2509.82) and section filed 11-29-2018; operative 1-1-2019 (Register 2018, No. 48).

Note: Authority cited: Section 11736.5, Insurance Code. Reference: Section 11736.5, Insurance Code.

1. New article 9.8 (sections 2509.80-2509.82) and section filed 11-29-2018; operative 1/1/2019 (Register 2018, No. 48).