The Self-Insurance Exam: A 60-Second Seminar in Workers’ Compensation Claims Handling

The California Office of Self-Insurance Plans (OSIP) is the state entity responsible for offering the Self-Insured Workers’ Compensation Claims Administrator examination. Candidates who successfully pass the exam receive a certificate demonstrating their competency to handle self-insured claims. By regulation, every self-insurance adjusting location is required to have at least one person on staff who successfully passed the examination (CCR § 15452). The purpose of today’s blog is to provide a little historical information behind the self-insurance administrator test.

Back in the 1970’s, test candidates required permission from OSIP to take the exam, which was granted only after the candidate submitted to an in-person interview with an OSIP representative.  During the interview process candidates were required to explain their reasons for wanting to take the exam along with demonstrating their readiness to be tested.  As for those who failed the exam the first time around, they were required to submit to a follow-up interview to present proof they were ready to be retested by explaining additional education received.

In the 1970’s passing the self-insurance administrator examination was exceptionally difficult.  In fact, statistics showed it was easier to pass the state bar exam than it was to pass the self-insurance test.  On average less than three candidates per year were successful, although there were times when nobody passed.

The original exam consisted of multiple-choice questions, performing a full manual PD rating, plus a 2-page essay explaining how the candidate would handle a disputed claims issue.  Because of a pending law suit challenging the examination format, the test was changed so that only questions with multiple-choice answers would be asked, thus eliminating subjective grading required in the narrative portion of the exam.  Prior to 1990 candidates would only receive a congratulatory letter upon passing the exam.  Today an actual certificate is issued in place of a congratulatory letter.  Once achieved the certificate is good for life, although the Director of Self-Insurance Plans does have the authority to revoke a certificate for good cause.

The self-insurance exam came into prominence on February 22, 2006, when Insurance Code §11761 took effect requiring mandatory education for workers’ compensation adjusters.  Any claims adjuster with less than five-years-experience would be required to receive 120 hours of education within one year unless they had passed the self-insurance examination, in which case only 30 hours would be required. Consequently, dozens of claims adjusters applied to take the self-insurance test in an attempt to avoid 120 hours of education. Unfortunately, far too many were simply unprepared for the exam.  The failure rate was greater than 80%.

Today private and on-line tutorial classes are available to help candidates prepare for the test.  We at Friedman + Bartoumian are also a resource should you have any questions about self-insurance.  Feel free to call upon us for assistance.