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incidental to the employee's regular employment and duties in the State of California However, if the Covered Member is not a duly qualified self -insurer at the time of the occurrence, the Authority will reimburse the Covered Member only for amounts that would have been paid had the Covered Member been a duly qualified self -insurer and the Authority will not pay or reimburse for any penalties, costs, expenses, or other amounts due to or arising from the failure to maintain good standing as a duly qualified self -insurer. The indemnity afforded by this Memorandum shall also apply to loss paid by the Covered Member because of any compensation, benefits, or liability paid by the Covered Member under (a) the Longshoremen's and Harbor Workers' Compensation Act (33 USC Sections 901-950), as may be amended, or (b) the Merchant Marine Act of 1920, also known as the Jones Act (46 U.S. Code, Section 30104), as may be amended; however, only if such liability is incidental to the employee's regular employment and duties in the State of California. The Authority's liability includes "bodily injury" to the master and members of the crew of a vessel, provided the "bodily injury" occurred in the territorial limits of, or the operation of a vessel sailing directly between the ports of the Continental United States of America, Alaska, Hawaii, or Canada. Coverage under this Memorandum will be provided in accordance with the benefits, requirements, limitations, and other provisions of the Workers' Compensation Act and this Memorandum will be implemented, administered, and construed pursuant to the Workers' Compensation Act. If there is a conflict between this Memorandum and the Act, the Act will govern. PART THREE — EMPLOYER'S LIABILITY COVERAGE The Authority will reimburse the Covered Member for loss resulting from an occurrence during the Coverage Period because of the Covered Member's legal liability for damages arising out of bodily injury or occupational disease sustained by employees normally employed in the State of California. PART FOUR— THE COVERED MEMBER'S RETENTION AND AUTHORITY'S LIMIT OF LIABILITY A. The Covered Member's Retention The Covered Member shall pay from its own account for an occurrence up to the amount stated in Item 3.a. of the Declarations Page as the Covered Member's Retained Limit. If, as a result of an occurrence that is a single accident, incident or exposure, employees from two or more Covered Members incur bodily injury, illness, or disease, then the Retained Limits of the involved Covered Members will be adjusted as provided in this provision. Initially, each Covered Member's stated Retained Limit (i.e., the amount stated in the Declarations Page) will be applied to the calculation of the Authority's payment of reimbursement under this Memorandum for the Covered Member's losses paid as a result of the multiple -Covered Member accident, incident or exposure. Five years after the end of the program year in which the accident, incident or exposure occurred, the Authority will undertake the following adjustment: (1) calculate the total amount of the losses paid over that period for all Covered Members and employees involved in the multiple -Covered Member accident, incident or exposure; (2) calculate each involved Covered Member's percentage share (based on the losses paid for the Covered Member's involved employee or employees) of the total losses paid; (3) multiply each involved Covered Member's percentage share of the total incurred losses times its stated Retained Limit; (4) use and apply the amount determined under step 3 as the Covered Member's adjusted Retained Limit for purposes of determining the Authority reimbursement for the losses paid for the multiple -Covered Member accident, incident or exposure; (5) calculate the amount of the Authority's payment of reimbursement, if any, to each involved Covered Member based on the adjusted Retained Limit of the Covered Member; and (6) if applicable, pay reimbursement or additional reimbursement to the involved Covered Member based on the adjusted Retained Limit. If losses for the multiple -Covered Member accident, incident or exposure remain payable after the five year period, the adjusted Retained Limits for the involved Covered Members will continue to apply to the calculation of Authority reimbursement until the employees' claims are closed and the Memorandum of Coverage Page 4 Effective July I, 2019