1. Office of Self-Insurance Plans (OSIP)

Overview of Self-Insurance

California has the largest workers’ compensation self-insurance program in the nation. As of January 1, 2026, a total of 7,049 California employers are active self-insured, not counting past self-insured employers that were still paying claims from their periods of self-insurance. These totals include:

Topics covered in this section:

Private Employers

  • 225 individual private sector employers, 1,372 subsidiaries and affiliates of those employers covered under their programs.
  • 23 private industry-specific group self-insurers, with 1,832 members.

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Public Employers

  • 402 individual public sector employers.
  • 79 JPAs (Joint Powers Authorities) - pools of self-insured employers - with 3,116 members.

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Former Self-Insured Employers

In addition, 8,579 former self-insured employers were still paying claims from their periods of self-insurance. These include:

  • 253 individual private sector self-insured employers and 3 private sector self-insured groups with 415 members.
  • 80 individual public sector self-insured employers and 11 JPA’ s with 171 members.

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Benefits and Prerequisites of Self-Insurance

These employers choose to self-insure their workers' compensation liabilities to cover their employees for reasons of cost effectiveness, greater control over their claims programs, and increased safety and loss control management. Self-insurance is an alternative to purchasing a workers’ compensation insurance policy. The success of a workers' compensation self-insurance program is often dependent upon the effectiveness of loss control activities and claims supervision.

To receive self-insured status, the employer must qualify through an application process, meet specified financial requirements, and be approved by the Director of the Department of Industrial Relations.

You can find more information on the self-insurance entry prerequisites here:

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The Application Process

Employers wanting to self-insure their workers' compensation liabilities must apply to the Office of Self-Insurance Plans (OSIP) for approval.

The private sector application process for a new employer (not currently self-insured in California) takes about twenty-one (21) days from initial properly completed application to issuance of certificate of authority to self-insure. During that period, OSIP evaluates the application to determine the applicant's financial strength, proposed benefit delivery system, and suitability to participate in self-insurance.

Current regulations permit existing self-insurers to add new subsidiary or affiliate companies with an application for an interim certificate. This provides immediate self-insurance for the new subsidiary/affiliate company and is valid for 180 days. During the 180-day period, an application for a permanent certificate must be filed and approved prior to the expiration of the interim certificate.

You can find more information on the self-insurance application process here:

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Administering the Benefit Delivery System

Self-insured employers are required to provide the same scope of benefits as an insurance company. Claims must be adjusted in California, and new self-insurers are required to use a licensed third-party administrator for their first three years of self-insurance. After that time, self-administration may be permitted.

Self-insurers are also subject to periodic audits by OSIP to verify the accuracy of claims reserving practices and the correctness of the reported workers' compensation liabilities. OSIP certifies individuals handling workers' compensation claims by means of an administrator's exam given throughout the year. A third-party claims administrator agency or company must also be licensed with OSIP to handle self-insured claims.

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Annual Reporting Requirements

Self-insurers are required to annually submit to OSIP an actuarial study, employer’s annual report, and a copy of their audited financial statements.

The actuarial study determines the ultimate exposure of the self-insurer’s workers’ compensation liabilities.

The audited financial statements are used to determine minimum financial eligibility to be self-insured.

The annual report completed jointly with the claims administrator which describes:

  • Claims paid in indemnity and medical.
  • Future liability on open claims.
  • Average number of employees and total wages for each adjusting location.
  • A list of all open indemnity claims.

You can find more information on the self-insurance yearly submission requirements here:

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Security Deposit

Every private entity self-insured employer is required by Labor Code §3701 to post a security deposit to secure its incurred workers’ compensation liabilities. At minimum, the deposit is the actuarially determined amount and can increase or decrease based on certain information received by OSIP.

The security deposit may be in one or a combination of the following forms:

  • Cash/certificate of deposit
  • Securities
  • Surety Bonds
  • Irrevocable letters of credit

In addition, California pioneered the Alternative Security Program (ASP) (Labor Code Section 3701.8) on July 1, 2003, as the first of its kind in the United States, and is managed by the Self-Insurers’ Security Fund (SISF).

All private self-insured employers’ participation level in the ASP is determined each year, based on their financial strength. The ASP will provide collateral security for those who meet the credit standards. For employers who are partially participating in the ASP, the ASP will provide a percentage of the security deposit, and the rest must be posted directly with OSIP. Excluded employers must post all of the required security deposit directly with OSIP.

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Fees

Private self-insurers are responsible for paying the same fees that they would otherwise pay through a traditional insurance policy along with a couple of self-insurance specific fees. A self-insurer could potentially receive two invoices annually, one from OSIP and one from the Security Fund.

The OSIP invoice covers the statutory assessments all employers pay. These are:

  • Workers’ Compensation Administration Revolving Fund (WCARF)
  • Uninsured Employers Benefits Trust Fund (UEBTF)
  • Subsequent Injuries Benefits Trust Fund (SIBTF)
  • Occupational Safety and Health Fund (OSHF)
  • Labor Enforcement and Compliance Fund (LECF)
  • Workers’ Compensation Fraud Account (FRAUD)
  • Annual License Fee and Per Capita charge per Employee (OSIP)

The SISF invoice, sent in middle of the calendar year, covers the operations of the SISF and the cost of providing the collateral for those who participate in the ASP.

For more information on the Self-Insurers Security Fund, please visit their website at Security Fund.

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Evaluation of Injury and Illness Prevention

OSIP requires an individual private sector applicant for a Certificate to certify they have implemented an effective Injury Illness Prevention Program as required by Labor Code section 6401.7. At minimum, the applicant must be in compliance with Cal/OSHA safety and health regulations.

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June 2026