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intention of petitioner to withdraw from workers' compensation
self-insurance status in California. On December 28, 1983,
petitioner sent a letter to the State of California confirming
that Liberty Mutual Fire was taking over the management of all
open and closed self-insurance claims from 1979 through 1983.
The State of California granted petitioner's application to
terminate its self-insurance plan. As of January 1, 1984,
petitioner and Liberty Mutual entered into an insurance policy
with respect to petitioner's 1984 California workers'
compensation liability. Petitioner was listed as the insured.
The policy was issued by Liberty Mutual Fire and was a
permissible workers' compensation policy in the State of
California. As part of the agreement, Liberty Mutual Fire was
required to investigate and adjust all claims made under the
policy. The policy provides coverage for compensation and other
benefits required of petitioner by the workers' compensation laws
of California and provides coverage for all sums which petitioner
is legally obligated to pay as damages because of bodily injury
or accident or disease, including death arising out of the course
of employment.
Under the Participating Provision Endorsement of the
insurance policy, petitioner was designated a member of Liberty
Mutual, with a right to participate in the distribution of
dividends. Dividends were determined by the board of directors
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