| Law & Industry Daily
Published on: Thursday, October 4, 2012

Car dealers’ SIG to cease workers’ comp coverage


SACRAMENTO, Calif., Oct. 4, 2012 (LID) — Auto Dealers Compensation of California (AD-COMP) self-insured group (SIG) will reportedly this year discontinue offering workers’ compensation coverage to its member companies.

AD-COMP’s 10-member Board of Trustees requested the group’s certificate to self insure in California be voluntarily revoked at the end of the year, Workers’ Comp Executive reported Wednesday.

AD-COMP’s group administrator, 5Star Specialty, delivered the board’s request to the California Department of Industrial Relations’ Office of Self Insurance Plans (DIR OSIP), Workers’ Comp Executive reported.

DIR OSIP disclosed AD-COMP’s plans in responding to Workers’ Comp Executive’s inquiries to DIR OSIP as to the self-insured group’s status.

“I received formal notice from the Administrator that ADComp’s Board of Trustees has approved by vote and is requesting that ADComp’s Certificate to self insure in California be voluntarily revoked at the end of 2012,” DIR OSIP Chief Jon Wroten wrote in an email response.

Wroten told Workers’ Comp Executive he received AD-COMP’s notice late Wednesday.

AD-COMP’s application granting the group’s Certificate of Consent to Self-Insure gained DIR OSIP approval Jan. 1, 2002.
With the certificate, AD-COMP became the first private-sector self-insurance group in California to be permissibly self-insured for workers’ compensation.

AD-COMP, which began with 4 dealerships, now has over 200 new car dealerships in the Golden State, with annual contributions of over $13.5 million.

Less than a year ago, AD-COMP issued a nearly $10 million capital call to cover past deficits and avoid OSIP enforcement action. The assessment was equal to a quarter of the group’s received contributions during the 2008, 2009 and 2010 plan years, Workers’ Comp Executive noted.


The original Workers’ Comp Executive story is at http://www.wcexec.com/Auto-Dealers-SIG-AD-COMP-Closing.aspx.

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