CDI Information on SB 189 Waivers for Officers and Directors

Last year, AB 2883 established a process for officers and directors to “opt-out” of their companies’ workers’ compensation policies, which led to a whole host of other requirements and practical problems, especially for in-force policies.  In an attempt to correct some of those problems, this year state lawmakers  enacted clean-up legislation (SB 189), which amends in Labor Code §§3351 and 3352.  The key provision allows corporate officers and directors who own at least 10 percent of a business to opt out of workers’ comp coverage.  The 10 percent threshold is a reduction from the 15 percent threshold that was set by AB 2883 in 2016.

The changes called for in SB 189 (some of which take effect January 1, 2018, and some of which take effect July 1, 2018) have led to a number of questions and much confusion within the workers’ compensation community.  To clarify the issues surrounding SB 189, as well as the effective dates for the various provisions, this week the California Department of Insurance (CDI) issued a notice to insurers, along with answers to frequently asked questions, and two sample waiver forms.  These materials are available on the WCIRB’s website at http://www.wcirb.com/bulletins.  

After reviewing the materials if you still have questions, you may contact the CDI directly at workcompquestions@insurance.ca.gov or you may reach CWCI General Counsel Ellen Sims Langille at elangille@cwci.org.