How can a self-insured Worker's Compensation claim liabilities be transferred to another entity?

• A. By filing with the clerk
• B. By court order
• C. By administrator's directive
• D. By applying for and receiving permission from the Director

Answer: (D)

In California, self-insured workers’ compensation liabilities can only be transferred with formal authorization from the Director of Industrial Relations. This ensures the new owner is financially capable of meeting future obligations and that claimants’ rights remain protected. To do this, the entity seeking the transfer must file an application with the Director, providing evidence of solvency, qualifications of the transferee, proposed terms, and any guarantees (such as reserves or reinsurance). The Director reviews the request and can set conditions, require ongoing reporting, or deny the transfer if safeguards aren’t met. Without obtaining the Director’s permission, a transfer isn’t valid.