Call Us CALL US TODAY | 1-888-945-1495

Business Insurance BUSINESS

Business Insurance to fit your specific needs. Industry specific programs at the lowest possible premium 

Read More
Workers Compensation Insurance WORKERS COMPENSATION

We do workers compensation better - lower prices, more carriers & free X-mod management.

Read More
Farm Insurance FARM

The State of California is built on Agriculture - Rancher, Grower, Processor, Distributor - We have a solution for you.

Read More
Life Insurance LIFE

Life Insurance - We can custom create insurance solutions for those problems no-one wants to talk about.

Read More
Homeowners Insurance HOME

Get coverage to help pay for repairs, replacement costs and living expenses if something happens to your home.

Read More


Auto Insurance AUTO

All auto policies ARE NOT the same - Give us the opportunity to match your needs with the best carrier.

Read More


A new law going into effect 1/1/2017 will limit who can and cannot  be excluded from your Work Comp - and it applies to your policy already in force:  This is going to be a nightmare for Business Owners and their insurance agents

AB 2883 Creates Problems For Agents With Large Workers’ Comp Books

SACRAMENTO, CA, Sept. 22, 2016 -- A bill signed into law that will go into effect Jan. 1, may create a near impossible task for California independent agents with large books of Workers’ comp business.

AB 2883 was designed to target situations where some businesses have been claiming excessive number of employees as officers in order to get around insuring them for workers’ comp.  

The bill would revise allowable exemptions from the definition of an employee to only apply to an officer or member of the board of directors, if he or she:

  • Owns at least 15% of the issued and outstanding stock of the corporation,
  • Or an individual who is a general partner of a partnership or a managing member of a limited liability company, and that person elects to be excluded by executing a written waiver of his or her rights under the laws governing workers’ compensation, stating under penalty of perjury that he or she is a qualifying officer or director, or a qualifying general partner or managing member, as applicable.

“The problem stems from the fact that it now appears that this bill applies to all workers’ comp insurance policies that are in effect on or after Jan. 1, 2017, not just workers’ comp policies that are issued or renewed on or after Jan. 1, 2017, which would normally be the case,” IIABCal Lobbyist John Norwood said.

“Unless stated otherwise, bills passed during the legislative session become effective on the first day of the following year and are not retroactive. In most cases workers’ compensation bills generally state that they only apply to policies on or after the effective date of the bill,” he said.

“However, in this case, no such language was included,” Norwood said. “And, what makes this different than other legislation, is that there are provisions contained in standard form WC policies (NCCI) and in the SCIF form that define the Workers’ Compensation Law applicable under the policy to be the WC laws of the State of California which include any amendments to the law which are in effect during the policy period.

“Both policy forms also include the Statutory Provision that states that terms of this insurance that conflict with the workers’ compensation insurance law in effect during the policy period are changed to conform to that law. 

“The facts of this case now turn something that should have been manageable for insurers, agents and brokers into something more akin to a nightmare,” he said. “In order for a business to retain an existing exemption, insurers and producers will have to obtain a signed waiver under penalty of perjury before Jan. 1, 2017 from all accounts that will be in effect on or after Jan. 1, 2017, even if the policy is in mid-term.”


Norwood said that IIABCal and other insurance industry organizations are doing additional research on the bill to determine whether a more limited application cannot be supported.

 Source: Independent Insurance Agents and Brokers of California

Posted 8:35 AM

Share |

No Comments

Post a Comment
Required (Not Displayed)

All comments are moderated and stripped of HTML.
Submission Validation
Change the CAPTCHA codeSpeak the CAPTCHA code
Enter the Validation Code from above.
NOTICE: This blog and website are made available by the publisher for educational and informational purposes only. It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state. By using this blog site you understand that there is no broker client relationship between you and the blog and website publisher.
Blog Archive
  • 2019
  • 2018
  • 2017
  • 2016

View Mobile Version
© Copyright. All rights reserved.
Powered by Insurance Website Builder