ADJ7762424 · May 6, 2022

The First Horizon policy did not provide valid workers' compensation coverage in California as it was not issued by a licensed insurer authorized to write such policies in California, and the Saints failed to secure payment of compensation as required by law, making them illegally uninsured during the relevant period.

From the decision · page 5Travelers argues that, because, at the time the First Horizon policy was written, First Horizon was not an admitted insurer licensed to write workers' compensation insurance in California, the Saints did not fulfil their obligation to "secure the payment of compensation" pursuant to Labor Code section 3700 and, accordingly, the Saints were illegally uninsured despite the existence of the First Horizon policy.

The First Horizon policy was not issued by a licensed insurer authorized to write workers' compensation insurance in California and only provided reimbursement, not direct payment, for California claims.

Favours Applicant prevailed

This meant the Saints did not secure payment of compensation as required by law, making them illegally uninsured during the relevant period.

From the decision · page 5Travelers argues that, because, at the time the First Horizon policy was written, First Horizon was not an admitted insurer licensed to write workers' compensation insurance in California, the Saints did not fulfil their obligation to "secure the payment of compensation" pursuant to Labor Code section 3700 and, accordingly, the Saints were illegally uninsured despite the existence of the First Horizon policy.

There was insufficient evidence that North West Insurance Company provided workers' compensation coverage from September 17, 1983 through April 1, 1984.

Favours Applicant prevailed

Without proof of a valid insurance contract, coverage by North West could not be found, supporting the finding of illegal uninsured status.

From the decision · page 6Finally, with respect to the petition for reconsideration filed by the Saints, we agree with the WCJ that there is insufficient evidence that there was a workers' compensation policy issued by North West. Without the insurance contract, we cannot find that North West provided coverage.

Labor Code section 3700

Employers must secure the payment of compensation by having workers' compensation insurance policies issued by insurers authorized to write such policies in California, as required by Labor Code section 3700.

The Saints failed to secure payment of compensation as required by Labor Code section 3700 because the First Horizon policy was not issued by a licensed insurer authorized to write workers' compensation insurance in California.

From the decision · page 5Travelers argues that, because, at the time the First Horizon policy was written, First Horizon was not an admitted insurer licensed to write workers' compensation insurance in California, the Saints did not fulfil their obligation to "secure the payment of compensation" pursuant to Labor Code section 3700 and, accordingly, the Saints were illegally uninsured despite the existence of the First Horizon policy.

Labor Code section 5500.5

Employers held liable for workers' compensation benefits due to another employer's failure to secure compensation are entitled to reimbursement from the unlawfully uninsured employer under Labor Code section 5500.5.

Travelers is entitled to reimbursement from the Saints because the Saints were unlawfully uninsured during the last year of injurious exposure.

From the decision · page 5Section 5500.5(a) provides that liability for cumulative trauma injuries "shall be imposed on the last year of employment exposing the employee to the hazards of the occupational disease or cumulative injury for which an employer is insured for workers' coverage or an approved alternative thereof." Section 5500.5 further provides that: "Any employer held liable for workers' compensation benefits as a result of another employer's failure to secure compensation as required in this division shall be entitled to reimbursement from the employers who were unlawfully uninsured during the last year of the employee's employment..." The WCAB has concurrent jurisdiction with civil courts to award reimbursement. Graphic Arts Mut. Ins. Co. v. Time Travel Intern., Inc. (2005) 126 Cal. App. 4th 405, 410-411 [70 Cal. Comp. Cases 184].) In determining whether an employer was unlawfully uninsured, an excess policy is not considered to be workers' compensation insurance for purposes of the application of Section 5500.5. "An excess insurance policy, however, is not a workers' compensation policy and thus not subject to Division Four." (See Bart II at 1059, (citing Millman).)

The First Horizon policy was not issued by a licensed insurer authorized to write workers' compensation insurance in California, and the policy only provided reimbursement, not direct payment, for California claims, similar to an excess policy.

From the decision · page 5Travelers argues that, because, at the time the First Horizon policy was written, First Horizon was not an admitted insurer licensed to write workers' compensation insurance in California, the Saints did not fulfil their obligation to "secure the payment of compensation" pursuant to Labor Code section 3700 and, accordingly, the Saints were illegally uninsured despite the existence of the First Horizon policy.