(a) A certificate of consent to self-insure may be revoked by the director at any time for good cause after a hearing. Good cause includes, among other things, a recommendation by the Self-Insurers’ Security Fund to revoke the certificate of consent, the impairment of the solvency of the employer to the extent that there is a marked reduction of the employer’s financial strength, failure to maintain a security deposit as required by Section 3701, failure to pay assessments of the Self-Insurers’ Security Fund, frequent or flagrant violations of state safety and health orders, the failure or inability of the employer to fulfill his or her obligations, or any of the following practices by the employer or his or her agent in charge of the administration of obligations under this division:
(1) Habitually and as a matter of practice and custom inducing claimants for compensation to accept less than the compensation due or making it necessary for them to resort to proceedings against the employer to secure compensation due.
(2) Where liability for temporary disability indemnity is not in dispute, intentionally failing to pay temporary disability indemnity without good cause in order to influence the amount of permanent disability benefits due.
(3) Intentionally refusing to comply with known and legally indisputable compensation obligations.
(4) Discharging or administering his or her compensation obligations in a dishonest manner.
(5) Discharging or administering his or her compensation obligations in such a manner as to cause injury to the public or those dealing with the employer.
(b) Where revocation is in part based upon the director’s finding of a marked reduction of the employer’s financial strength or the failure or inability of the employer to fulfill his or her obligations, or a practice of discharging obligations in a dishonest manner, it is a condition precedent to the employer’s challenge or appeal of the revocation that the employer have in effect insurance against liability to pay compensation.
(c) The director may hold a hearing to determine whether good cause exists to revoke an employer’s certificate of consent to self-insure if the employer is cited for a willful, or repeat serious violation of the standard adopted pursuant to Section 6401.7 and the citation has become final.
(Amended by Stats. 2012, Ch. 363, Sec. 17. (SB 863) Effective January 1, 2013.)
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