| (a) A captive insurance company may not write, issue,
or provide any form of workers' compensation insurance coverage to
policyholders.
(b) A captive insurance company that issues a reimbursement
policy for claims paid under a workers' compensation insurance policy
written and issued by an authorized insurance company, may not participate
in the adjudication, settlement, or payment of any claims made under
that workers' compensation insurance policy.
(c) Claims incurred by a certified self-insured employer
may not be paid directly by a captive insurance company, but must
continue to be paid by a qualified claims servicing contractor as
required in Labor Code §407.061.
(d) The existence of a contractual reimbursement policy
issued by a captive insurance company to an affiliate does not alter
any statutory requirements related to workers' compensation insurance,
including the statutory requirement under Insurance Code §2053.203
that:
(1) the insurance company writing a workers' compensation
policy with a negotiated deductible is required to pay all benefits,
including those benefits payable, wholly or partly, from the deductible
amount; and
(2) the policyholder must make reimbursements to the
insurance company writing the workers' compensation policy with a
negotiated deductible periodically, rather than at the time claim
costs are incurred.
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