Not one but two companies who are self-insured for workers’ compensation in California have filed for bankruptcy in the last two weeks and the Department of industrial Relations (DIR) through the Office of Self Insurance Plans (OSIP) is closely monitoring the situation in both cases. Both companies-- Hostess parent Interstate Brands and Eastman Kodak – are now in bankruptcy proceedings, but are continuing to meet their workers’ comp obligations, officials say.

“Neither one of the companies have defaulted. They both are current and are continuing to pay their claims,” says DIR spokesman Dean Fryer. “They both filed for Chapter 11 and we are monitoring them closely.”

Jeff Pettegrew at the Self-Insurers’ Security Fund (SISF) tells Workers’ Comp Executive that he is aware of the bankruptcies, but is not expecting either estate to be coming his way in the near future, if at all. He notes that this is the second bankruptcy proceeding for Interstate and says that during the first it continued paying claims “and never missed a payment.”

SISF is the financial backstop for the California employers that self-insure for workers’ comp. If the state does declare a self-insured employer or a self-insured group to be in default on its obligations, then its workers’ comp assets and liabilities are transferred to SISF to continue paying claims.

According to state records, Irving, Texas-based Interstate Brands is still actively self-insured for its operations in California. Eastman Kodak’s certificate to self-insure was revoked in early 2008 but it continues to pay on its outstanding liabilities. The Rochester, NY-based company had been self-insured in California since 1936.

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