FOR IMMEDIATE RELEASE
IR #2002-01
Thursday, January 10, 2002
Auto dealers first private group to be approved as self insurer
SAN FRANCISCO – The California Department of Industrial Relations (DIR) recently
approved the first private group self insurer plan since the 1993 change in state labor code
allowing employers to pool their workers’ compensation liabilities.
On Jan. 1, the Auto Dealers Compensation of California, Inc., became the first private sector
group to self insure for workers’ compensation liabilities as an alternative to traditional
coverage. Members of this plan are Claridge’s Ltd., Fremont; Crown Motors, Redding;
Pearson Ford Co., San Diego; and Raceway Ford, Inc., Riverside.
“I am delighted to approve the first private group self insurer,” said DIR director Stephen J.
Smith. “We expect to see further expansion among new-car dealers and of the group self
insurance concept to other industries. Group self insurance has worked for over 20 years
among cities, counties and school districts, and should work equally well among private
employers.
“While less than one quarter of one percent of California employers are currently self insured
for workers’ compensation liabilities, these primarily large employers pay annually about a
third of all workers’ compensation benefits in the state.
State self insurance regulations require private sector groups to prepare an extensive feasibility
study, have $5 million qualifying net worth among members and belong to the same
homogenous industry. The group must be governed by a board of trustees, charge adequate
premiums, carry specific excess insurance for catastrophic losses, actuarially project losses,
and agree to joint and several liability of all losses. These requirements are in addition to the
state requisite for all workers’ compensation self insurers to post security deposit, file annual
reports of liabilities, and pay assessments and fees.
For more information on self insured workers’ compensation plans visit the Self Insurance
Plan web site at http://www.dir.ca.gov/SIP/sip.html