If a voluntary plan does not provide for the assumption by an admitted disability insurer of the liability of the employer to pay the benefits afforded by the plan, the director shall not approve it unless the employer files with the director the bond of an admitted surety insurer conditioned on the payment by the employer of its obligations under the plan, deposits with the director securities approved by the director to secure the payment of the obligations, or deposits with the director an irrevocable letter of credit. The penal sum of the bond or the amount of the deposit of securities or letter of credit shall be determined by the director and shall be not less than the product obtained by multiplying the rate of worker contributions in the ensuing year, as determined in Section 984, by 0.5 of the estimated taxable wages prescribed by Section 985 to be paid to the employees for the ensuing year. Upon approval, the bond, money, or securities shall upon the director’s written order be deposited with the Treasurer for the purpose specified in this section. The Treasurer shall give a receipt for the deposits and the state shall be responsible for the custody and safe return of any securities so deposited.
(Amended by Stats. 1994, Ch. 960, Sec. 3. Effective January 1, 1995. Operative May 31, 1995, or sooner, as prescribed by Sec. 4 of Ch. 960.)
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