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CA Department of Insurance

Certificate of Authority Section IV - Item #18

Workers' Compensation Deposit

Workers' compensation insurers must file a securities deposit pursuant to California Insurance Code Sections 11691. State law and regulations (CIC §11751; Workers' Compensation Deposit Regulations Article 9.5, Subchapter 3; California Administrative Code §2509.1 - 2509.20, Chapter 5, Title 10-lists deposit options available to insurers. The options are as follows:

  1. Placing a Securities Deposit of the required deposit value with the State Treasurer or an approved bank, savings and loan association or trust company;

  2. Placing a Letter of Credit of the required deposit value with the State Treasurer; or

  3. Placing a Combination Deposit of a letter of credit and securities, the total of which is equal to the required deposit value. All items of the deposit must be placed at the State Treasurer.

The following guidelines are intended to assist you with accomplishing one of the three alternatives listed above. However, these are merely guidelines and any insurer entering into any of these alternatives should consult the pertinent statutes and regulations noted above.

A securities transaction Form A-174, or Form D-174 is required for all securities transactions. The fee for such form varies, as described below.

The deposit value must be equal to the deposit value required under California Insurance Code Section 11691. If you are applying for admission in California and want to transact workers' compensation, the deposit value is $100,000.

Please be advised that securities with sinking fund values are no longer accepted by the State Treasurer. If you submit such securities on your A-174, you will be asked to replace them with securities without sinking fund values.

Workers' compensation insurers must file a Special California Schedule P on an annual basis. This schedule allows the department to monitor the premium volume of the company and adjust the deposit accordingly. The deposit must always meet the last Schedule P requirement.


Securities

The deposit value of acceptable securities is the lower of par or market value, except that preferred stock and common stock are to be valued at market. This deposit may be placed with the State Treasurer, an approved bank, savings and loan association, or trust company.

If your deposit is to be placed with the State Treasurer, please fill out the enclosed A-174 Securities Transaction form according to the attached instructions. Return two (2-copies of the form and the securities transaction filing fee to the Securities Deposit Unit.

If your deposit is to be placed with an approved bank, savings and loan association, or trust company, you must place such deposit in accordance with Insurance Code §11691 and the Workers' Compensation Deposit Regulations, Article 9.5, Subchapter 3, Chapter 5, Title 10 of the California Administrative Code.

We refer you to the regulations themselves for specifics as to the entities available for the deposits and all other details regarding this arrangement. The agreement to be used is identified as Workers' Compensation Deposit Trust and Security Agreement. No deviation will be allowed. The agreement should be executed in quadruplicate. Submit four (4) copies of the agreement and two (2) copies of Form D-174. Please refer to the current fee schedule for the applicable filing fee for the agreement and securities transaction fee. These items are to be submitted with Item 20 of your application.

Location Contact

Bank of New York Mellon Trust Company, NA
U.S. Asset Services
400 South Hope Street, Suite 400
Los Angeles, CA 90071

Michael Cirar
Vice President

(213) 553-9715
mike.cirar@bnymellon.com

City National Bank
WMS Dept.#705-024
555 South Flower Street, 12th Floor
Los Angeles, CA 90071

Michele Katz
Vice President

(213) 673-8852
(213) 673-2807 Fax
michele.katz@cnb.com

East West Bank
135 N. Los Robles Avenue, 7th Floor
Pasadena, CA 91101

Elvira Valenzuela
Business & Community Development

(626) 768-6729 Direct
(626) 316-1067 Fax
Elvira.valenzuela@eastwestbank.com

JPMorgan Chase Bank, N.A.
560 Mission St, 5th Floor
San Francisco, CA 94105

Hannah Marble
Vice President

(415) 315-8242
(415) 315-8377 Fax
hannah.marble@jpmorgan.com

U.S. Bank, NA
Institutional Trust & Custody
One California Street, Suite 1000
San Francisco, CA 94111

Carolyn Cox
Vice President and Relationship Manager

(415) 677-3603 Direct
(800) 419-5131 Toll Free
(866) 798-2247 Fax
Carolyn.Cox@usbank.com

U.S. Bank, NA
Institutional Trust & Custody
One California Street, Suite 1000
San Francisco, CA 94111

Carolyn Cox
Vice President and Relationship Manager

(415) 677-3603 Direct
(800) 419-5131 Toll Free
(866) 798-2247 Fax
Carolyn.Cox@usbank.com

Union Bank of CA
350 California Street, 6th Floor
San Francisco, CA 94104

Denise Wong
Vice President/Relationship Manager
Institutional Trust and Custody Services

(415) 705-7326
(877) 833-8854 Fax
denise.wong@unionbank.com

Wells Fargo Bank, N.A.
Wells Fargo Institutional Retirement and Trust
MAC A0119-29A
333 Market Street, 29th Floor
San Francisco, CA 94105

Michael J. Wade
Institutional Trust Services Relationship Manager

(415) 537-7309
(866) 966-2074 Fax
Michael.J.Wade@wellsfargo.com

 

Letter of Credit

A letter of credit must be deposited with the State Treasurer. A letter of credit used for deposit must be a clean and irrevocable letter which meets the Department's requirements as set out in Regulation 2509.18 of Article 9.5, Subchapter 3, Chapter 5, Title 10 of the California Administrative Code. Regulation 2509.18. A sample of an acceptable Letter of Credit for Workers' Compensation Deposit.

  • The letter should run or be effective from April 1 March 30 of the following year. This requirement is pursuant to California Insurance Code Sections 11693.

  • Please refer to the current schedule of fees for the filing fee for a new letter of creditor subsequent letters from the same bank.

  • In order to submit a letter of credit for approval, the package must contain a cover letter, one original letter of credit, two (2) original A-174's and the appropriate filing fee. The filing must be sent to the Tax and Securities Unit in the Accounting Services Bureau located at: 300 Capitol Mall, 14th Floor, Sacramento, CA 95814.

  • Additionally, since the original letters of credit are sent directly from the bank, it is suggested that the insurer forward the cover letter, check, and A-174 to the bank. The bank should add the original letter of credit and forward the entire package to this Department at the address as shown above.


Combination Letter of Credit and Securities

A deposit may be made of a letter of credit and securities if the sum total value is equal to the required deposit value. The letter and securities must be placed with the State Treasurer.

If you have any questions regarding these deposits, please contact the Department's Legal Division at 415-538-4035.


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