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Preparing to Submit Changes in Ownership – Total Sale vs. Partial Sale

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Preparing to Submit Changes in Ownership – Total Sale vs. Partial Sale

June 2, 2021

Each year, the Workers’ Compensation Insurance Rating Bureau of California (WCIRB) receives approximately 4,000 online ownership form submissions, reporting changes in ownership and requests to combine or separate entities. Timely processing of these submissions is dependent on insurers, agents and brokers submitting all required ownership information. Incomplete submissions may result in delayed publication of experience modifications or revisions.

Changes in ownership may involve a single entity or multiple entities that are owned by the same person or combination of persons. Whether a change in ownership constitutes a total sale or partial sale impacts what information the submitter needs to provide to the WCIRB. 

Before submitting an online ownership form to report a change in ownership, submitters should obtain the following information from the policyholder:

  1. What was the exact date of the ownership change?
    1. If the ownership change is slated to happen in the future, submit the form after the change takes place. 
    2. If the reported change in ownership took place in the last six years, the WCIRB requires the exact date of the change. 
  2. What are the names of the original owners of the entity (or operations) that underwent the change in ownership?
    1. If the entity is owned by a second entity, the names of the owners of the second entity must be provided.
  3. What are the names of the new owners of the entity (or operations) that underwent the change in ownership?
    1. Are the new owners related to the original owners? If so, describe the family relationship.
  4. Did the original owners sell all or a portion of their entity (or operations)?
    1. If they sold a portion (partial sale), did the new owners take most of the original owners’ employees?
    2. If they sold everything (total sale), did the new owners hire a multitude of new employees?
  5. Prior to the change in ownership date, did the new owners have ownership in any other California entities?

Lastly, submitters should obtain a narrative description of the change in ownership. This narrative should include answers to the previous questions as well as any other relevant facts. If clients or policyholders have provided a letter explaining what took place, submitters may upload this letter along with the online ownership form. 

To learn more about how total and partial sales can affect experience modifications, register for our Special Edition Mod Talk on Tuesday, June 29, 2021 at 10:00 AM PT. We recommend you watch Mod Talk: How Ownership Changes Affect X-Mods prior to attending the webinar.

Reporting Ownership Information to the WCIRB
If an entity or entities have undergone a change in ownership, ownership information may need to be submitted via WCIRB Connect® for review. Insurers, authorized third parties and agents and brokers may submit a Request of Change in Ownership via WCIRB Connect. Find more information on this process on the WCIRB Connect® Ownership Information Submission Tool page.