CA Lab Code Section 3702.6

(a)

The director shall establish an audit program addressing the adequacy of estimates of future liability of claims for all private self-insured employers, and shall ensure that all private self-insured employers are audited within a three-year cycle by the Office of Self Insurance Plans.

(b)

Each public self-insurer shall advise its governing board within 90 days after submission of the self-insurer’s annual report of the total liabilities reported and whether current funding of those workers’ compensation liabilities is in compliance with the requirements of Government Accounting Standards Board Publication No. 10.

(c)

The director shall, upon a showing of good cause, order a special audit of any public self-insured employer to determine the adequacy of estimates of future liability of claims.

(d)

For purposes of this section, “good cause” means that there exists circumstances sufficient to raise concerns regarding the adequacy of estimates of future liability of claims to justify a special audit.