If a self-insured employer has not adequately funded their trust account for over a week, what action is required?

• A. Tell the ER to deposit funds immediately
• B. Tell the ER to deposit the funds within 14 days
• C. Notify Chief immediately
• D. No action on your part is necessary

Answer: (C)

Regulatory oversight requires quick reporting when a self-insured employer’s trust fund is underfunded. In California SIP, keeping the trust adequately funded is essential to ensure there are funds available to pay workers’ compensation benefits. If the trust remains underfunded for more than a short period, the administrator must immediately notify the Chief of the Division of Self-Insurance Plans so regulators can review the situation and direct any necessary corrective action. Delaying this notification could jeopardize the plan’s compliance status and the solvency of the fund.

Telling the employer to deposit funds or waiting up to a set period to act does not satisfy the regulatory obligation, and taking no action misses the safety net intended to protect benefits. Immediate notification to the Chief is the correct, required step.