Bill Text: CA AB228 | 2011-2012 | Regular Session | Amended

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

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Bill Title: State Compensation Insurance Fund: out-of-state risks.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2011-10-09 - Chaptered by Secretary of State - Chapter 670, Statutes of 2011. [AB228 Detail]

Download: California-2011-AB228-Amended.html

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BILL NUMBER: AB 228	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JUNE 27, 2011
	AMENDED IN SENATE  JUNE 16, 2011
	AMENDED IN SENATE  JUNE 2, 2011

INTRODUCED BY   Assembly Member Fuentes

                        FEBRUARY 2, 2011

   An act to amend Section 11780.5 of the Insurance Code, relating to
the State Compensation Insurance Fund.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 228, as amended, Fuentes. State Compensation Insurance Fund:
out-of-state risks.
   Existing law creates the State Compensation Insurance Fund
administered by a board of directors for the purpose of transacting
workers' compensation insurance, insurance against the expense of
defending any suit for serious and willful misconduct against an
employer or his or her agent, and insurance for employees and other
persons for the compensation fixed by the workers' compensation laws
for employees and their dependents. Existing law authorizes the fund
to insure a California employer against the employer's liability for
workers' compensation benefits, under the law of any other state, for
California employees temporarily working outside of California on a
specific assignment if the fund insures the employer's other
employees who work within California.
   This bill would expand that authorization so that the fund would
be authorized to insure a qualified employer whose principal place of
business is in California against the employer's liability for
workers' compensation benefits, under the law of any other state, if
the fund insured the employees who work within California, as
specified. The bill would require the Department of Insurance, on or
before March 1, 2015, to report to the Assembly Committee on
Insurance and the Senate Committee on Insurance regarding the
experience of the fund in engaging in these transactions and make
recommendations, as provided.  The bill would prohibit the fund
from initiating paid advertising or soliciting sponsorship of
advertising campaigns to market or promote to prospective insureds
the ability to insure qualified employers under the law of any other
state and would make specified provisions inoperative on December 31,
2016. 
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


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

  SECTION 1.  Section 11780.5 of the Insurance Code is amended to
read:
   11780.5.  (a) The fund may also insure a California employer
against his or her liability for workers' compensation benefits,
under the law of any other state, for California employees
temporarily working outside of California on a specific assignment if
the fund insures the employer's other employees who work within
California.
   (b) (1) The fund is only authorized under this subdivision to
insure an employer whose principal place of business is in
California, provided the majority of the employer's operations and
employees are located within California, against his or her liability
for workers' compensation benefits, under the law of any other
state, if the fund insures the employer's employees who work within
California.
   (2) The fund is only authorized to transact insurance pursuant to
this subdivision by contract with an insurer that  has responded
to a request for proposal from the fund and  is admitted to
transact workers' compensation insurance in California and in the
out-of-state jurisdiction where the non-California employees are
located. The fund may only contract with an admitted insurer for
purposes of this subdivision if the insurer meets all of the
following criteria:
   (A) The insurer has an A minus (A-) rating or better from A.M.
Best Company.
   (B) The insurer has substantial prior experience in transacting
workers' compensation business on another insurer's behalf in a
fronting arrangement.
   (C) The insurer has a minimum surplus of one hundred million
dollars ($100,000,000).
   (c)  (1)    On or before March
1, 2015, the Department of Insurance shall provide to the Assembly
Committee on Insurance and the Senate Committee on Insurance a report
assessing the experience of the fund that is authorized pursuant to
this subdivision and shall make recommendations concerning its
continuation, limitation, or expansion with special attention to the
extent of advantages this practice offers California employers, the
California workers' compensation marketplace, and the impact of this
class of insurance, whether pro or con, on the fund, its management,
and the California marketplace. The costs incurred by the Department
of Insurance in the assessment, writing, and publication of this
report shall be provided by the fund. 
   (2) The requirement for submitting a report imposed under this
subdivision is inoperative on March 1, 2019, pursuant to Section
10231.5 of the Government Code.  
   (d) The fund shall not initiate paid advertising or solicit
sponsorship of advertising campaigns to market or promote to
prospective insureds the ability to insure qualified employers under
the law of any other state.  
   (e) Subdivisions (b), (c), and (d) shall be operative only until
December 31, 2016.