Bill Text: CA AB2230 | 2013-2014 | Regular Session | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Insurance: Workers' Comp Bond Fund: assessments.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2014-06-28 - Chaptered by Secretary of State - Chapter 76, Statutes of 2014. [AB2230 Detail]

Download: California-2013-AB2230-Introduced.html

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BILL NUMBER: AB 2230	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Cooley

                        FEBRUARY 20, 2014

   An act to amend Section 1063.74 Insurance Code, relating to
insurance.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2230, as introduced, Cooley. Insurance: Workers' Comp Bond
Fund: assessments.
   Existing law creates the California Insurance Guarantee
Association (CIGA) and requires all insurers admitted to transact
insurance in this state to become members. CIGA is required to
collect premium payments from members to discharge its obligations to
cover claims of an insolvent insurer. CIGA is required to allocate
its claim payments and costs based on categories of insurance,
including, but not limited to, workers' compensation claims and
homeowners' claims. The premium payments from each category are
separate and required to be used to pay the claims and costs
allocated to that category.
   Existing law authorizes CIGA to request the issuance of bonds by
the California Infrastructure and Economic Development Bank to pay
for covered claims that arise as a result of the insolvency of
workers' compensation insurers. Proceeds from the sale of the bonds
are deposited in the Workers' Comp Bond Fund, and CIGA distributes
this money to pay covered claims. Principal and interest on the bonds
are paid from special bond assessments levied by CIGA on workers'
compensation insurers, as provided.
   This bill would prohibit, once all the bonds issued pursuant to
these provisions are redeemed, further special bond assessments from
being levied or made. The bill would require that any premium
adjustments applicable to the special bond assessments continue to be
made and determined, and that any credits or charges that result
from the premium adjustments be credited or charged to the workers'
compensation assessments that the insurers are otherwise required to
pay CIGA.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 1063.74 of the Insurance Code is amended to
read:
   1063.74.  (a) Notwithstanding any other limits on assessments,
CIGA shall have the authority to levy upon member insurers special
bond assessments in the amount necessary to pay the principal of and
interest on the bonds, and to meet other requirements established by
agreements relating to the bonds. The assessments shall be collected
only from the member insurers providing workers' compensation
insurance, in the same manner as separate premium payments are used
to pay the claims and costs allocated to that category pursuant to
Section 1063.5. Special bond assessments made pursuant to this
section shall also be subject to the surcharge provisions in Sections
1063.14 and 1063.145. 
   (b) Notwithstanding any other law, after all bonds issued pursuant
to this article have been redeemed, no further special bond
assessments shall be levied or made. Any premium adjustments called
for and described in Section 1063.5, as applied to special bond
assessments initially charged, shall continue to be made and
determined. Any credits or charges that result from the premium
adjustments on the special bond assessments shall be credited or
charged to the assessments called for and described in Section
1063.5.  
   (b) 
    (c)  In addition to the special bond assessments
provided for in this section, the board in its discretion and subject
to other obligations of the association, may utilize current funds
of CIGA, premium assessments made under Section 1063.5, and advances
or dividends received from the liquidators of insolvent insurers to
pay the principal and interest on any bonds issued at the board's
request and shall utilize, to the extent feasible, the recoveries
from the liquidators of the estates of insolvent workers'
compensation carriers to pay bonds issued at the board's request to
fund workers' compensation claims.