Department of Industrial Relations
The Office Self Insurance Plans (OSIP), a program within the director’s office of the Department of Industrial Relations (DIR), authorizes qualified employers to provide their own coverage for workers’ compensation liabilities.
The Director of DIR is responsible for certification of public and private self-insured employers, third-party administrative agencies that oversee self- insurance programs, and individual claims adjusters.
Self-insurers are required to post a security deposit — adjusted annually to cover liabilities incurred — and to submit to SIP audits. For more information, please visit http://www.dir.ca.gov/sip/sip.html or comments on self-insurance.
For “excluded” self-insured entities, not eligible for the Alternative Security Program (ASP), OSIP determines the amount of collateral (security deposit) a self-insured member must with the State to cover its expected future claim costs in the event the entity defaults in its California workers comp obligations. The OSIP required security deposit ranges from 135% to 200% of estimated future claim liabilities (less any applicable excess insurance coverage of specific open claims). The claim liabilities are based upon the formula contained in each self-insured’s most recent OSIP Annual Report (year ending Dec 31). An OSIP claim audit of a self-insured may result in adjustments to its stated Annual Report claim liabilities. These adjustments may impact the self-insured’s required deposit as well as its annual assessments.