Bill Text: CA SB1011 | 2013-2014 | Regular Session | Amended

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

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Bill Title: Nonprofit corporations: self-insurance.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2014-09-25 - Chaptered by Secretary of State. Chapter 556, Statutes of 2014. [SB1011 Detail]

Download: California-2013-SB1011-Amended.html

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BILL NUMBER: SB 1011	AMENDED
	BILL TEXT

	AMENDED IN SENATE  APRIL 22, 2014

INTRODUCED BY   Senator Monning

                        FEBRUARY 13, 2014

   An act to amend Section 5005.1 of the Corporations Code, relating
to corporations.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1011, as amended, Monning. Nonprofit corporations:
self-insurance.
   The Nonprofit Corporation Law authorizes certain nonprofit
corporations that are organized chiefly to provide health or human
services, other than hospitals, to establish an insurance pool to
self-insure against various risks, including, among others, tort
liability and any loss arising from physical damage to motor vehicles
owned or operated by the nonprofit corporation.  The pooling
arrangement is not considered insurance nor is it subject to
regulation under the insurance laws of this state. 
   This bill would extend these provisions to authorize the
establishment of an insurance pool to self-insure against the loss or
damage to property of every kind, including, but not limited to,
losses and expenses related to the loss of property.  The bill
would require that all corporations participating in a pooling
arrangement established under these provisions be given written
notice that the pool is not regulated by the Insurance Commissioner
and that the state insurance insolvency guaranty funds are not
available to safeguard its risk. 
   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 5005.1 of the Corporations Code is amended to
read:
   5005.1.  (a) Except for a liability  which  
that  may be insured against pursuant to Division 4 (commencing
with Section 3200) of the Labor Code, an authorized corporation may
do any of the following:
   (1) Insure itself against all or any part of any tort liability.
   (2) Insure any employee of the corporation against all or any part
of his or her liability for injury resulting from an act or omission
in the scope of employment.
   (3) Insure any board member, officer, or volunteer of the
corporation against any liability that may arise from any act or
omission in the scope of participation with the corporation.
   (4) Insure itself against any loss arising from physical damage to
motor vehicles owned or operated by the corporation.
   (5) Insure itself against the loss or damage to property of every
kind, including, but not limited to, losses and expenses related to
the loss of property.
   (b)  (1)    The insurance authorized pursuant to
this section shall only be available to an authorized corporation
where that corporation has joined with two or more other authorized
corporations in an arrangement providing for the pooling of
self-insured claims or losses. The pooling arrangement shall not be
considered insurance nor be subject to regulation under the Insurance
Code. 
   (2) All corporations participating in a pooling arrangement
established pursuant to this section shall be given written notice
that the pool is not regulated by the Insurance Commissioner and that
the state insurance insolvency guaranty funds are not available to
safeguard its risk. 
   (c)  Nothing in this   This  section
 shall be construed to   does not 
authorize a corporation organized pursuant to this division to pay
for, or to insure, contract, or provide for payment for, any part of
a claim or judgment against an employee of the corporation for
punitive or exemplary damages.
   (d) Any insurance pool established pursuant to this section shall
have initial pooled resources of not less than two hundred fifty
thousand dollars ($250,000).
   (e) All participating corporations in any pool established
pursuant to this section  must   are required to
 agree to pay premiums or make other mandatory financial
contributions or commitments necessary to ensure a financially sound
risk pool.
   (f) For the purpose of this section, an authorized "corporation"
means any corporation that meets all of the following criteria:
   (1) Is organized chiefly to provide or fund health or human
services, but does not include a hospital.
   (2) Is exempt from federal income taxation as an organization
described in Section 501(c)(3) of the United States Internal Revenue
Code.