§ 15475.2. Restriction on Use of Funds.

(a) The group self insurer, its trustees, group members, Group Administrator, claims administrator, or other agents or vendors of the group self insurer shall not utilize funds collected from group members or from other parties conducting business with the group self insurer, and/or funds earned by the group through investments for any purpose not directly related to the payment of claims, the payment of fees related to funding the group, including the posting of a security deposit, penalties, excess insurance premiums, or for any other reasonable obligations or costs of operation of the group self insurer as determined and authorized by the Board, including the refunding of surplus funds authorized pursuant to Section 15477.

(b) The group self insurer shall not lend any money to any trustee, core member or affiliate member of the private group self insurer, or to the Group Administrator, the claims administrator, and/or any other agent, vendor, or service provider. The group self insurer shall not lend or issue any debt instruments incur other encumbrances or obligations, or extend credit to any group member for the payment of contributions or assessments. Notwithstanding this section, the group self insurer may:

(1) permit fixed installment plans not to exceed ten (10) months to collect contributions for the payment of current group members;

(2) permit fixed installment plans approved by the Manager for the payment of special assessments to make up a funding insufficiency pursuant to Section 15477.

(c) Funds of the private group self insurer shall not be commingled with the funds or assets of any group member or any other group self insurer.

(d) Once surplus funds have been declared, such surplus funds of the private group self insurer shall not be commingled in the checking account(s) established for the payment of and administration of current liabilities of group member claims, assessments, and other expenses of the group self insurer's operation.

HISTORY

1. New section filed 3-2-2009; operative 3-2-2009 pursuant to Government Code section 11343.4 (Register 2009, No. 10).

Note

Note: Authority cited: Sections 54, 55 and 3702.10, Labor Code. Reference: Sections 3700, 3701, 3701.5, 3702.1, 3702.2 and 3702.10, Labor Code.