California Self-Insurers Security Fund

IAIABC: Please provide a profile of your organization.

Jill Dulich, Claims and Operations Manager, California Self-Insurers Security Fund: SISF is a non-profit workers’ compensation guaranty fund established in 1984 by the State of California. It covers all legally self-insured employers with payroll in the State of California. Its mission is “to provide continuity of workers’ compensation benefits to injured workers of insolvent private self-insured companies at the lowest overall long-term cost, equitably distributed to the self-insurance community.” It has five employees and is governed by a Board of Trustees of seven elected from the self-insurer community, along with the Director of the Department of Industrial Relations acting in an ex officio capacity.

IAIABC: How does your organization serve the workers' compensation industry or what do you see as the most important role you play in the workers' compensation industry?

JD: SISF serves an important role in the workers’ compensation industry by providing a stable backstop that ensures that injured workers receive the benefits to which they are legally entitled in the event their self-insured employer becomes bankrupt or otherwise insolvent. The cost of providing these benefits is then equitably distributed to the participants in the self-insured community by means of assessments, but only in conjunction with SISF seeking recourse against the defaulted company in bankruptcy and against all other responsible parties. In California Labor Code Section 3740, the California Legislature expressly declared that “ . . . the establishment of the Self-Insurers’ Security Fund is a necessary component of a complete system of workers’ compensation, required by Section 4 of Article XIV of the California Constitution, to have adequate provisions for the comfort, health and safety, and general welfare of any and all workers and their dependents to the extent of relieving the consequences of any industrial injury or death, and full provision for securing the payment of compensation.”

IAIABC: What do you see as some of the major challenges the industry is facing and how can we as a community address them?

JD: The opioid crisis, while improving, continues to loom large in workers’ compensation. There is no easy answer to this problem and it has been addressed throughout the country. I am hopeful that through education of the pitfalls and risks of opioid use and the sharing of best practices with providers, payers and injured workers’ we can all unite to get our arms around this crisis.

Another challenge that we see is the aging of the industry experts and the lack of a “backstop” to fill critical positions in the industry in the insurance, self-insured and regulatory arenas. Unfortunately, workers’ compensation is not really considered to be a “sexy” area to work in so we are not attracting the younger generations to this field. We need to start focusing on bringing bright and energetic folks into the industry either through training or looking to other fields that can bring the transferable skills needed for this highly complex job. One group that should be considered is teachers that are looking for change…they are able to multi task, can definitely prioritize well, can handle difficult and challenging people/situations and most can learn new skill sets easily. The industry as a whole needs to start recruitment efforts to ensure that we have the people and the knowledge base to continue to improve workers’ compensation across the country.

The final challenge is something that we are not sure anything can be done to address but it is ever increasing complexity of workers’ compensation regulations and statutes that are enacted in an effort to bring harmony to the system. Frequently these changes come at the behest of ancillary entities and are not necessarily in the best interests of the two parties that struck the grand bargain…labor and employers. Simplification should be the key component in workers’ compensation and that concept seems to have gone by the wayside. We don’t have all the answers on that, but we all need to work to simplify the system for many reasons, not the least of which is to assist injured workers who are forced to navigate a system that is excessively complex.

IAIABC: Are there any projects/programs/initiatives going on at your organization that you are particularly excited or enthusiastic about?

JD: We are very excited that we have been able to educate and advise the insurance markets about the credit risks assumed by SISF, and to work with them to develop bespoke, efficient credit risk insurance solutions that allow us to transfer risk in a cost-effective way. We are excited that we have a refined credit risk monitoring methodology that relies on state-of-the-art tools. Finally, we are excited to have recently launched a major education campaign to better communicate the benefits of self-insurance to companies interested in self-insurance, current SISF members, brokers and other stakeholders.

IAIABC: Why is your organization a member of the IAIABC? What would you tell others about the benefits of membership?

JD: IAIABC provides employer and carrier members the opportunity to network and learn from the regulators and adjudicators from around the country and the world. Each jurisdiction has its own best practices and the IAIABC is really the only organization that brings these ideas and practices into a venue for sharing and emulating. It also allows the regulators and the employer/insurer members to learn what the challenges are for each group and helps to open dialogue among the groups which is critical to a successful workers’ compensation program.