CALIFORNIA LEGISLATURE 20212022 REGULAR SESSION Assembly Bill No. 2154Introduced by Assembly Member CooleyFebruary 15, 2022 An act to amend Section 63049.64 of the Government Code, and to amend Sections 1063.5, 1063.14, 1063.70, 1063.71, 1063.73, 1063.74, and 1063.75 of, to amend the heading of Article 14.26 (commencing with Section 1063.70) of Chapter 1 of Part 2 of Division 1 of, to repeal Section 1063.16 of, to repeal Article 14.25 (commencing with Section 1063.50) of Chapter 1 of Part 2 of Division 1 of, and to repeal and add Section 1063.72 of, the Insurance Code, relating to insurance. LEGISLATIVE COUNSEL'S DIGESTAB 2154, as introduced, Cooley. California Insurance Guarantee Association. (1) Existing law creates the California Insurance Guarantee Association (CIGA) and requires all insurers admitted to transact specified insurance lines in this state to become members. Under existing law, CIGA pays and discharges covered claims, which are the obligations of an insolvent insurer that meet specified requirements. Existing law requires CIGA to collect premium payments from its member insurers sufficient to discharge its obligations. Existing law requires CIGA to allocate its claim payments and costs to the categories of workers compensation claims, homeowners and automobile claims, and other claims.Under existing law, if CIGA determines that the insolvency of one or more member insurers providing workers compensation insurance will result in covered claim obligations for workers compensation claims in excess of CIGAs capacity to pay from current funds, the board of CIGA may ask the California Infrastructure and Economic Development Bank to issue bonds. Under existing law, if a natural disaster results in covered claim obligations currently payable and owed to CIGA in excess of its capacity to pay from current funds and current premium assessment, the board of CIGA may ask the Department of Insurance to issue bonds. Existing law authorizes CIGA or the department, as appropriate, to levy assessments on CIGA member insurers to pay the principal and interest on the bonds, which member insurers recoup from insureds through a surcharge on applicable policies. Existing law creates the Workers Comp Bond Fund and the Insurance Assessment Bond Fund, into which proceeds from the sale of bonds are deposited.This bill would repeal the provisions relative to bonds issued to discharge claims after a natural disaster, and would revise the provisions relative to bonds issued to discharge workers compensation to additionally authorize CIGA to ask the California Infrastructure and Economic Development Bank to issue bonds if CIGA determines the insolvency of member insurers writing homeowners and automobile insurance and other insurance will result in covered claim obligations in excess of CIGAs capacity to pay from current funds. The bill would authorize CIGA to levy an assessment on member insurers writing homeowners and automobile insurance and other insurance to pay the principal of, and interest on, the bonds issued for that claims category, which would be recouped through a surcharge on applicable policies, thereby imposing a tax. The bill would create the Homeowners and Automobile Bond Fund and the Other Bond Fund into which proceeds from the sale of bonds to cover claims in those categories of insurance would be deposited. The bill would also make conforming changes.(2) Existing law requires CIGA to adopt a plan of operation that requires a member insurer to recoup the premium charge paid by the member insurer through a surcharge on premiums charged for insurance policies in the year following the premium charge.This bill would require the plan of operation to require a member insurer to recoup the premium charge amount, as determined by CIGA, through a surcharge on premiums, even if a premium charge has not yet been paid to CIGA because the member insurer had no direct written premium for that category of insurance for the prior year.(3) This bill would include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIII A of the California Constitution, and thus would require for passage the approval of 2/3 of the membership of each house of the Legislature.Digest Key Vote: 2/3 Appropriation: NO Fiscal Committee: YES Local Program: NO Bill TextThe people of the State of California do enact as follows:SECTION 1. Section 63049.64 of the Government Code is amended to read:63049.64. (a) The bank may issue bonds pursuant to Chapter 5 (commencing with Section 63070) and may loan the proceeds thereof to the association, and deposit the proceeds into a separate account in the fund, or use the proceeds to refund bonds previously issued under this article. Bond proceeds may also be used to fund necessary reserves, capitalized interest, credit enhancement costs, or costs of issuance.(b) Bonds issued under this article shall not be deemed to constitute a debt or liability of the state or of any political subdivision thereof, other than the bank, or a pledge of the faith and credit of the state or of any political subdivision, but shall be payable solely from the fund and other revenues and assets securing the bonds. All bonds issued under this article shall contain on the face of the bonds a statement to that effect.(c) For purposes of this article, the term project, as defined in subdivision (p) of Section 63010, shall include financing of the costs of claims of insolvent workers compensation insurers, insurers admitted to transact insurance in at least one of the categories described in paragraph (2) of subdivision (a) of Section 1063.5 of the Insurance Code, in an amount (together with associated costs of financing) that may be determined by the association in making a request for financing to the bank.SEC. 2. Section 1063.5 of the Insurance Code is amended to read:1063.5. (a) (1) To the extent necessary to secure funds for the association for payment of the administrative expenses of the association, covered claims of insolvent insurers, and for payment of reasonable costs of adjusting the claims, the association shall collect premium payments from its member insurers sufficient to discharge its obligations.(2) The association shall allocate its claim payments and costs, incurred or estimated to be incurred, to one or more of the following categories:(A) Workers compensation claims.(B) Homeowners claims and automobile claims, including all of the following:(i) Automobile material damage.(ii) Automobile liability (both personal injury and death and property damage).(iii) Medical payments.(iv) Uninsured motorist claims.(C) Claims other than workers compensation, homeowners, and automobile, as defined above.(3) Separate premium payments shall be required for each category.(4) The premium payments for each category shall be used to pay the claims and costs allocated to that category.(b) (1) The rate of premium charged shall be a uniform percentage of net direct written premium in the preceding calendar year applicable to that category.(2) The rate of premium charges to each member insurer in the appropriate categories shall be based on the net direct written premium of each member insurer as shown in the latest years annual financial statement on file with the commissioner.(3) In cases of a dispute as to the amount of the net direct written premium between the association and one of its member insurers, the written decision of the commissioner shall be final.(c) Within 90 days after the filing of an annual statement, each member insurer shall file a report to the association indicating the amount of premiums not subject to the associations premium charge and the amount of special excess workers compensation premiums for the preceding calendar year. The report is not required in any year in which a premium charge is not made by the association.(d) In charging premiums to member insurers, the association shall adjust, if necessary, the net direct written premiums shown on a member insurers annual statement by excluding any premiums written for any lines of insurance or types of coverage not covered by this article under paragraph (3) of subdivision (c) of Section 1063.1.(e) (1) The premium charged to any member insurer for any of the three categories or a category established by the association shall not be more than 2 percent of the net direct written premium unless there are bonds outstanding that were issued pursuant to Article 14.25 (commencing with Section 1063.50) or Article 14.26 (commencing with Section 1063.70).(2) If bonds issued pursuant to either article Article 14.26 (commencing with Section 1063.70) are outstanding, the premium charged to a member insurer for the category for which the bond proceeds are being used to pay claims and expenses shall not be more than 1 percent of the net direct written premium for that category.(f) (1) The association may exempt or defer, in whole or in part, the premium charge of any member insurer, if the premium charge would cause the member insurers financial statement to reflect an amount of capital or surplus less than the minimum amounts required for a certificate of authority by any jurisdiction in which the member insurer is authorized to transact insurance. However, during the period of deferment, no dividends shall be paid to shareholders or policyholders by the company whose premium charge was deferred.(2) Deferred premium charges shall be paid when the payment will not reduce capital or surplus below required minimums.(g) After all covered claims of insolvent insurers and expenses of administration have been paid, any unused premiums and any reimbursements or claims dividends from liquidators remaining in any category shall be retained by the association and applied to reduce future premium charges in the appropriate category.(h) The commissioner may suspend or revoke the certificate of authority to transact business in this state of a member insurer that fails to pay a premium when due and after demand has been made.(i) Interest at a rate equal to the current federal reserve discount rate plus 21/2 percent per annum shall be added to the premium of any member insurer that fails to submit the premium requested by the association within 30 days after the mailing request. However, in no event shall the interest rate exceed the legal maximum.(j) This section shall apply only to premium charges paid on or after January 1, 2017.SEC. 3. Section 1063.14 of the Insurance Code is amended to read:1063.14. (a) (1) The plan of operation adopted pursuant to subdivision (c) of Section 1063 shall contain provisions whereby each member insurer is required to recoup, in the year following the premium charge, a sum calculated to recoup the premium charge paid by the member insurer under this article by way of a surcharge on premiums charged for insurance policies to which this article applies.(2) Amounts recouped shall not be considered premiums for any other purpose, including the computation of gross premium tax or agents commission.(b) The plan of operation adopted pursuant to subdivision (c) of Section 1063 shall contain a provision requiring a member insurer to recoup the premium charge amount, as determined by the association, through a surcharge on premiums charged for insurance policies to which this article applies, even if a premium charge was not yet paid to the association because the member insurer had no direct written premium for insurance policies to which this article applies for the prior year. All surcharges collected in this manner shall be remitted to the association within 60 days of the end of the calendar year in which the surcharge is collected.(b)(c) (1) The amount of any surcharge shall be separately stated on either a billing or policy declaration sent to an insured. The association shall determine the rate of the surcharge and the collection period for each category, and these shall be mandatory for all member insurers of the association who write business in those categories.(2) Each member insurer shall file a report in accordance with the provisions of the plan of operation indicating the amount of surcharges it has collected.(A) Member insurers who collect surcharges in excess of premium charges paid in the preceding year pursuant to Section 1063.5 shall remit the excess to the association as an additional premium within 30 days after the association has determined the amount of the excess recoupment and given notice to the member insurer of that amount. The excess shall be applied to reduce future premium charges in the appropriate category.(B) Member insurers who report surcharge collections that are less than what they paid in the preceding years premium charge shall receive reimbursement from the association for the shortfall in surcharge collection.(C) Member insurers may amend their reports indicating the amount of surcharges collected for the prior five years if they discover there was an error in the original reports filed with the association.(c)(d) The plan of operation may permit a member insurer to omit collection of the surcharge from any of its insureds only if the expense of collecting the surcharge would exceed the amount of the surcharge, provided, however, that a member insurer is not entitled to reimbursement from the association pursuant to subparagraph (B) of paragraph (2) of subdivision (b) of any amount omitted from collection pursuant to this subdivision.(d)(e) This section applies only to premium charges paid on or after January 1, 2017.SEC. 4. Section 1063.16 of the Insurance Code is repealed.1063.16.The association, to the extent it determines necessary or desirable, may issue bonds pursuant to Article 14.26 (commencing with Section 1063.70) to provide funds to pay covered claims of insolvent insurers. The association may act as agent of the department to collect premium payments levied by the department on its member insurers. If the association borrows the proceeds of the bonds from the department, the association may assess an additional premium, not to exceed 2 percent of the net direct premium written by the member insurer, to be applied exclusively to the repayment of the loan. The revenue received from the additional premium shall be pledged to the repayment of the loan and shall be used exclusively for that purpose until the bonds have been paid or provision for the payment of them has been made.SEC. 5. Article 14.25 (commencing with Section 1063.50) of Chapter 1 of Part 2 of Division 1 of the Insurance Code is repealed.SEC. 6. The heading of Article 14.26 (commencing with Section 1063.70) of Chapter 1 of Part 2 of Division 1 of the Insurance Code is amended to read: Article 14.26. Workers Compensation California Insurance Guarantee Association Bond Fund FundsSEC. 7. Section 1063.70 of the Insurance Code is amended to read:1063.70. The California Insurance Guarantee Association is authorized to pay and discharge certain claims of insolvent insurers as defined in Section 1063.1 through the collection of premiums from its members, which amounts are limited by law and take time to assess and collect. This article provides for the ability of CIGA to request the issuance of bonds by the California Infrastructure and Economic Development Bank pursuant to Article 8 (commencing with Section 63049.6) of Chapter 2 of Division 1 of Title 6.7 of the Government Code to more expeditiously and effectively provide for the payment of covered claims that arise as a result of the insolvencies of insurance companies providing workers compensation insurance. insurers admitted to transact insurance in at least one of the categories described in paragraph (2) of subdivision (a) of Section 1063.5. The bonds are to be paid from the special bond assessments assessed by CIGA for those purposes and the other funds provided pursuant to Section 1063.74. Special bond assessments to repay bonds issued for payment of workers compensation insurance benefits shall be assessed, to the extent necessary, for the claims category. respective category for which bonds are issued. It is a public purpose and in the best interest of the public health, safety, and general welfare of the residents of this state to provide for the issuance of bonds to pay claimants and policyholders having covered claims against insolvent insurers operating in this state.SEC. 8. Section 1063.71 of the Insurance Code is amended to read:1063.71. (a) The terms member insurer, insolvent insurer, and covered claims have the meanings assigned those terms in Section 1063.1.(b)The terms CIGA, commissioner, board, and department have the meanings assigned those terms in Section 1063.51.(c)(b) Bank means the California Infrastructure and Economic Development Bank created pursuant to Article 1 (commencing with Section 63020) of Chapter 2, Division 1 of Title 6.7 of the Government Code.(c) Board means the board of governors of CIGA.(d) Bonds means bonds issued by the Bank pursuant to Article 8 (commencing with Section 63049.6) of Chapter 2 of Division 1 of Title 6.7 of the Government Code to provide funds for the payment of the covered claims and the adjusting and defense expenses relating to those claims that are issued at the request of the board pursuant to Section 1063.73.(e) Collateral means the special bond assessments, the right of CIGA to be paid the special bond assessments, all revenues therefrom, the separate account accounts of the Workers Comp Compensation Bond Fund, the Homeowners and Automobile Bond Fund, and the Other Bond Fund into which special bond assessments are deposited, and the proceeds thereof.(f) CIGA means the California Insurance Guarantee Association, established pursuant to Article 14.2 (commencing with Section 1063).(g) Commissioner means the Insurance Commissioner.(h) Department means the Department of Insurance.(i) Homeowners and Automobile Bond Fund means the fund created pursuant to subdivision (b) of Section 1063.72.(j) Other Bond Fund means the fund created pursuant to subdivision (c) of Section 1063.72.(f)(k) Special bond assessment means the premiums collected by CIGA pursuant to Section 1063.74.(g)(l) Workers Comp Compensation Bond Fund means the fund created pursuant to subdivision (a) of Section 1063.72.SEC. 9. Section 1063.72 of the Insurance Code is repealed.1063.72.The Workers Comp Bond Fund is hereby created. Proceeds from the sale of bonds shall be deposited in a separate account in the Workers Comp Bond Fund. Only CIGA, and with respect to payment of the bonds, the trustee for the bonds, shall have the ability to authorize disbursements from the separate account. Special bond assessments shall be deposited in a separate account in the Workers Comp Bond Fund and shall not be commingled with any other moneys. Only the trustee for the bonds shall have the ability to authorize disbursements from this separate account, and CIGA shall have no right or authority to authorize disbursements from this separate account. The Workers Comp Bond Fund shall be maintained with the trustee for the bonds. Following payment or provision for payment of the bonds, amounts in the Workers Comp Bond Fund shall be transferred to the fund that is designated in the indenture. All money in the Workers Comp Bond Fund and all special bond assessments shall be used by CIGA for the exclusive purpose of carrying out the purposes of this part, and, notwithstanding any other provisions of law, the Workers Comp Bond Fund shall not be a state fund, shall not be subject to the rules or procedures of any fund in the State Treasury, and application of the fund shall not be subject to the supervision or budgetary approval of any officer or division of state government. CIGA and the trustee for the bonds may as necessary or convenient to the accomplishment of any other purpose under this article, divide the fund into separate accounts.SEC. 10. Section 1063.72 is added to the Insurance Code, to read:1063.72. (a) The Workers Compensation Bond Fund is hereby created. (1) Proceeds from the sale of bonds with respect to the workers compensation category described in subparagraph (A) of paragraph (2) of subdivision (a) of Section 1063.5 shall be deposited in a separate account in the Workers Compensation Bond Fund. Only CIGA, and, with respect to payment of the bonds, the trustee for the bonds, shall have the ability to authorize disbursements from the separate account within the Workers Compensation Bond Fund.(2) Special bond assessments levied pursuant to Section 1063.74 with respect to the workers compensation category shall be deposited in a separate account in the Workers Compensation Bond Fund and shall not be commingled with any other moneys. Only the trustee for the bonds shall have the ability to authorize disbursements from this separate account within the Workers Compensation Bond Fund, and CIGA shall have no right or authority to authorize disbursements from this separate account.(3) The Workers Compensation Bond Fund shall be maintained with the trustee for the bonds. Following payment or provision for payment of the bonds, amounts in the Workers Compensation Bond Fund shall be transferred to the fund that is designated in the indenture for the bonds.(4) All money in the Workers Compensation Bond Fund and all special bond assessments levied pursuant to Section 1063.74 with respect to the workers compensation category shall be used by CIGA for the exclusive purpose of carrying out the purposes of this part. Notwithstanding any other law, the Workers Compensation Bond Fund is not a state fund and shall not be subject to the rules or procedures of any fund in the State Treasury, and application of the fund shall not be subject to the supervision or budgetary approval of any officer or division of state government.(5) CIGA and the trustee for the bonds may, as necessary or convenient to the accomplishment of any other purpose under this article, divide the Workers Compensation Bond Fund into separate accounts.(b) The Homeowners and Automobile Bond Fund is hereby created.(1) Proceeds from the sale of bonds with respect to the homeowners and automobile category described in subparagraph (B) of paragraph (2) of subdivision (a) of Section 1063.5 shall be deposited in a separate account in the Homeowners and Automobile Bond Fund. Only CIGA, and, with respect to payment of the bonds, the trustee for the bonds, shall have the ability to authorize disbursements from the separate account within the Homeowners and Automobile Bond Fund.(2) Special bond assessments levied pursuant to Section 1063.74 with respect to the homeowners and automobile category shall be deposited in a separate account in the Homeowners and Automobile Bond Fund and shall not be commingled with any other moneys. Only the trustee for the bonds shall have the ability to authorize disbursements from this separate account within the Homeowners and Automobile Bond Fund, and CIGA shall have no right or authority to authorize disbursements from this separate account.(3) The Homeowners and Automobile Bond Fund shall be maintained with the trustee for the bonds. Following payment or provision for payment of the bonds, amounts in the Homeowners and Automobile Bond Fund shall be transferred to the fund that is designated in the indenture for the bonds.(4) All money in the Homeowners and Automobile Bond Fund and all special bond assessments levied pursuant to Section 1063.74 with respect to the homeowners and automobile category shall be used by CIGA for the exclusive purpose of carrying out the purposes of this part. Notwithstanding any other law, the Homeowners and Automobile Bond Fund is not a state fund and shall not be subject to the rules or procedures of any fund in the State Treasury, and application of the fund shall not be subject to the supervision or budgetary approval of any officer or division of state government.(5) CIGA and the trustee for the bonds may, as necessary or convenient to the accomplishment of any other purpose under this article, divide the Homeowners and Automobile Bond Fund into separate accounts.(c) The Other Bond Fund is hereby created.(1) Proceeds from the sale of bonds with respect to the other category described in subparagraph (C) of paragraph (2) of subdivision (a) of Section 1063.5 shall be deposited in a separate account in the Other Bond Fund. Only CIGA, and, with respect to payment of the bonds, the trustee for the bonds, shall have the ability to authorize disbursements from the separate account within the Other Bond Fund.(2) Special bond assessments levied pursuant to Section 1063.74 with respect to the other category shall be deposited in a separate account in the Other Bond Fund and shall not be commingled with any other moneys. Only the trustee for the bonds shall have the ability to authorize disbursements from this separate account within the Other Bond Fund, and CIGA shall have no right or authority to authorize disbursements from this separate account.(3) The Other Bond Fund shall be maintained with the trustee for the bonds. Following payment or provision for payment of the bonds, amounts in the Other Bond Fund shall be transferred to the fund that is designated in the indenture for the bonds.(4) All money in the Other Bond Fund and all special bond assessments levied pursuant to Section 1063.74 with respect to the other category shall be used by CIGA for the exclusive purpose of carrying out the purposes of this part. Notwithstanding any other law, the Other Bond Fund is not a state fund and shall not be subject to the rules or procedures of any fund in the State Treasury, and application of the fund shall not be subject to the supervision or budgetary approval of any officer or division of state government.(5) CIGA and the trustee for the bonds may, as necessary or convenient to the accomplishment of any other purpose under this article, divide the Other Bond Fund into separate accounts.SEC. 11. Section 1063.73 of the Insurance Code is amended to read:1063.73. In the event CIGA determines that the insolvency of one or more member insurers providing workers compensation insurance insurance in at least one of the categories described in paragraph (2) of subdivision (a) of Section 1063.5 will result in covered claim obligations for workers compensation claims in excess of CIGAs capacity to pay from current funds, the board, in its sole discretion, may by resolution request the Bank to issue bonds pursuant to Article 8 (commencing with Section 63049.6) of Chapter 2 of Division 1 of Title 6.7 of the Government Code to provide funds for the payment of the covered claims and the adjusting and defense expenses relating to those claims. Notwithstanding any other provision of law, CIGA is hereby authorized to borrow proceeds of the bonds to provide for those purposes. CIGA may request the Bank to issue bonds pursuant to Article 8 (commencing with Section 63049.6) of Chapter 2 of Division 1 of Title 6.7 of the Government Code. CIGA shall provide the commissioner with a copy of the request and the commissioner may, within 30 days of receipt of the request, modify, cancel, or require a delay in the requested issuance. The proceeds of bonds issued for workers compensation any category of insurance benefits may be used by CIGA to reimburse funds advanced or temporarily loaned from other categories to fund workers compensation claims. categories.SEC. 12. 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, insurance in the category described in paragraph (2) of subdivision (a) of Section 1063.5 for which the bonds are issued, and shall be applied 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 initial 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.(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 of and interest on any bonds issued at the boards request and shall utilize, to the extent feasible, the recoveries from the liquidators of the estates of insolvent workers compensation carriers insurers in the respective category of insurance to pay bonds issued at the boards request to fund workers compensation claims. the corresponding insurance claims in that category of insurance.SEC. 13. Section 1063.75 of the Insurance Code is amended to read:1063.75. Any bonds Bonds issued to provide funds for covered claim obligations for workers compensation claims claims, homeowners and automobile claims, as described in subparagraph (B) of paragraph (2) of subdivision (a) of Section 1063.5, and other claims, as described in subparagraph (C) of paragraph (2) of subdivision (a) of Section 1063.5, shall be issued prior to January 1, 2026, in an aggregate principal amount outstanding for each category not to exceed at any one time not to exceed one billion five hundred million dollars ($1,500,000,000), and any ($1,500,000,000) for that category. Any bonds issued or issued to refund bonds shall not have a final maturity exceeding 20 years from the date of issuance. The bonds shall be issued at the request of CIGA, shall be in the form, shall bear the date or dates, and shall mature at the time or times as the indenture authorized by the request may provide. The bonds may be issued in one or more series, as serial bonds or as term bonds, or as a combination thereof, and, notwithstanding any other provision of law, the amount of principal of, or interest on, bonds maturing at each date of maturity need not be equal. The bonds shall bear interest at the rate or rates, variable or fixed or a combination thereof, be in the denominations, be in the form, either coupon or registered, carry the registration privileges, be executed in the manner, be payable in the medium of payment at the place or places within or without the state, be subject to the terms of redemption, contain the terms and conditions, and be secured by the covenants as the indenture may provide. The indenture may provide for the proceeds of the bonds and funds securing the bonds to be invested in any securities and investments, including investment agreements, as specified therein. CIGA may enter into or authorize any ancillary obligations or derivative agreements as it determines necessary or desirable to manage interest rate risk or security features related to the bonds. The bonds shall be sold at public or private sale by the Treasurer at, above, or below the principal amount thereof, on the terms and conditions and for the consideration in the medium of payment that the Treasurer shall determine prior to the sale.
CALIFORNIA LEGISLATURE 20212022 REGULAR SESSION Assembly Bill No. 2154Introduced by Assembly Member CooleyFebruary 15, 2022 An act to amend Section 63049.64 of the Government Code, and to amend Sections 1063.5, 1063.14, 1063.70, 1063.71, 1063.73, 1063.74, and 1063.75 of, to amend the heading of Article 14.26 (commencing with Section 1063.70) of Chapter 1 of Part 2 of Division 1 of, to repeal Section 1063.16 of, to repeal Article 14.25 (commencing with Section 1063.50) of Chapter 1 of Part 2 of Division 1 of, and to repeal and add Section 1063.72 of, the Insurance Code, relating to insurance. LEGISLATIVE COUNSEL'S DIGESTAB 2154, as introduced, Cooley. California Insurance Guarantee Association. (1) Existing law creates the California Insurance Guarantee Association (CIGA) and requires all insurers admitted to transact specified insurance lines in this state to become members. Under existing law, CIGA pays and discharges covered claims, which are the obligations of an insolvent insurer that meet specified requirements. Existing law requires CIGA to collect premium payments from its member insurers sufficient to discharge its obligations. Existing law requires CIGA to allocate its claim payments and costs to the categories of workers compensation claims, homeowners and automobile claims, and other claims.Under existing law, if CIGA determines that the insolvency of one or more member insurers providing workers compensation insurance will result in covered claim obligations for workers compensation claims in excess of CIGAs capacity to pay from current funds, the board of CIGA may ask the California Infrastructure and Economic Development Bank to issue bonds. Under existing law, if a natural disaster results in covered claim obligations currently payable and owed to CIGA in excess of its capacity to pay from current funds and current premium assessment, the board of CIGA may ask the Department of Insurance to issue bonds. Existing law authorizes CIGA or the department, as appropriate, to levy assessments on CIGA member insurers to pay the principal and interest on the bonds, which member insurers recoup from insureds through a surcharge on applicable policies. Existing law creates the Workers Comp Bond Fund and the Insurance Assessment Bond Fund, into which proceeds from the sale of bonds are deposited.This bill would repeal the provisions relative to bonds issued to discharge claims after a natural disaster, and would revise the provisions relative to bonds issued to discharge workers compensation to additionally authorize CIGA to ask the California Infrastructure and Economic Development Bank to issue bonds if CIGA determines the insolvency of member insurers writing homeowners and automobile insurance and other insurance will result in covered claim obligations in excess of CIGAs capacity to pay from current funds. The bill would authorize CIGA to levy an assessment on member insurers writing homeowners and automobile insurance and other insurance to pay the principal of, and interest on, the bonds issued for that claims category, which would be recouped through a surcharge on applicable policies, thereby imposing a tax. The bill would create the Homeowners and Automobile Bond Fund and the Other Bond Fund into which proceeds from the sale of bonds to cover claims in those categories of insurance would be deposited. The bill would also make conforming changes.(2) Existing law requires CIGA to adopt a plan of operation that requires a member insurer to recoup the premium charge paid by the member insurer through a surcharge on premiums charged for insurance policies in the year following the premium charge.This bill would require the plan of operation to require a member insurer to recoup the premium charge amount, as determined by CIGA, through a surcharge on premiums, even if a premium charge has not yet been paid to CIGA because the member insurer had no direct written premium for that category of insurance for the prior year.(3) This bill would include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIII A of the California Constitution, and thus would require for passage the approval of 2/3 of the membership of each house of the Legislature.Digest Key Vote: 2/3 Appropriation: NO Fiscal Committee: YES Local Program: NO
CALIFORNIA LEGISLATURE 20212022 REGULAR SESSION
Assembly Bill
No. 2154
Introduced by Assembly Member CooleyFebruary 15, 2022
Introduced by Assembly Member Cooley
February 15, 2022
An act to amend Section 63049.64 of the Government Code, and to amend Sections 1063.5, 1063.14, 1063.70, 1063.71, 1063.73, 1063.74, and 1063.75 of, to amend the heading of Article 14.26 (commencing with Section 1063.70) of Chapter 1 of Part 2 of Division 1 of, to repeal Section 1063.16 of, to repeal Article 14.25 (commencing with Section 1063.50) of Chapter 1 of Part 2 of Division 1 of, and to repeal and add Section 1063.72 of, the Insurance Code, relating to insurance.
LEGISLATIVE COUNSEL'S DIGEST
## LEGISLATIVE COUNSEL'S DIGEST
AB 2154, as introduced, Cooley. California Insurance Guarantee Association.
(1) Existing law creates the California Insurance Guarantee Association (CIGA) and requires all insurers admitted to transact specified insurance lines in this state to become members. Under existing law, CIGA pays and discharges covered claims, which are the obligations of an insolvent insurer that meet specified requirements. Existing law requires CIGA to collect premium payments from its member insurers sufficient to discharge its obligations. Existing law requires CIGA to allocate its claim payments and costs to the categories of workers compensation claims, homeowners and automobile claims, and other claims.Under existing law, if CIGA determines that the insolvency of one or more member insurers providing workers compensation insurance will result in covered claim obligations for workers compensation claims in excess of CIGAs capacity to pay from current funds, the board of CIGA may ask the California Infrastructure and Economic Development Bank to issue bonds. Under existing law, if a natural disaster results in covered claim obligations currently payable and owed to CIGA in excess of its capacity to pay from current funds and current premium assessment, the board of CIGA may ask the Department of Insurance to issue bonds. Existing law authorizes CIGA or the department, as appropriate, to levy assessments on CIGA member insurers to pay the principal and interest on the bonds, which member insurers recoup from insureds through a surcharge on applicable policies. Existing law creates the Workers Comp Bond Fund and the Insurance Assessment Bond Fund, into which proceeds from the sale of bonds are deposited.This bill would repeal the provisions relative to bonds issued to discharge claims after a natural disaster, and would revise the provisions relative to bonds issued to discharge workers compensation to additionally authorize CIGA to ask the California Infrastructure and Economic Development Bank to issue bonds if CIGA determines the insolvency of member insurers writing homeowners and automobile insurance and other insurance will result in covered claim obligations in excess of CIGAs capacity to pay from current funds. The bill would authorize CIGA to levy an assessment on member insurers writing homeowners and automobile insurance and other insurance to pay the principal of, and interest on, the bonds issued for that claims category, which would be recouped through a surcharge on applicable policies, thereby imposing a tax. The bill would create the Homeowners and Automobile Bond Fund and the Other Bond Fund into which proceeds from the sale of bonds to cover claims in those categories of insurance would be deposited. The bill would also make conforming changes.(2) Existing law requires CIGA to adopt a plan of operation that requires a member insurer to recoup the premium charge paid by the member insurer through a surcharge on premiums charged for insurance policies in the year following the premium charge.This bill would require the plan of operation to require a member insurer to recoup the premium charge amount, as determined by CIGA, through a surcharge on premiums, even if a premium charge has not yet been paid to CIGA because the member insurer had no direct written premium for that category of insurance for the prior year.(3) This bill would include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIII A of the California Constitution, and thus would require for passage the approval of 2/3 of the membership of each house of the Legislature.
(1) Existing law creates the California Insurance Guarantee Association (CIGA) and requires all insurers admitted to transact specified insurance lines in this state to become members. Under existing law, CIGA pays and discharges covered claims, which are the obligations of an insolvent insurer that meet specified requirements. Existing law requires CIGA to collect premium payments from its member insurers sufficient to discharge its obligations. Existing law requires CIGA to allocate its claim payments and costs to the categories of workers compensation claims, homeowners and automobile claims, and other claims.
Under existing law, if CIGA determines that the insolvency of one or more member insurers providing workers compensation insurance will result in covered claim obligations for workers compensation claims in excess of CIGAs capacity to pay from current funds, the board of CIGA may ask the California Infrastructure and Economic Development Bank to issue bonds. Under existing law, if a natural disaster results in covered claim obligations currently payable and owed to CIGA in excess of its capacity to pay from current funds and current premium assessment, the board of CIGA may ask the Department of Insurance to issue bonds. Existing law authorizes CIGA or the department, as appropriate, to levy assessments on CIGA member insurers to pay the principal and interest on the bonds, which member insurers recoup from insureds through a surcharge on applicable policies. Existing law creates the Workers Comp Bond Fund and the Insurance Assessment Bond Fund, into which proceeds from the sale of bonds are deposited.
This bill would repeal the provisions relative to bonds issued to discharge claims after a natural disaster, and would revise the provisions relative to bonds issued to discharge workers compensation to additionally authorize CIGA to ask the California Infrastructure and Economic Development Bank to issue bonds if CIGA determines the insolvency of member insurers writing homeowners and automobile insurance and other insurance will result in covered claim obligations in excess of CIGAs capacity to pay from current funds. The bill would authorize CIGA to levy an assessment on member insurers writing homeowners and automobile insurance and other insurance to pay the principal of, and interest on, the bonds issued for that claims category, which would be recouped through a surcharge on applicable policies, thereby imposing a tax. The bill would create the Homeowners and Automobile Bond Fund and the Other Bond Fund into which proceeds from the sale of bonds to cover claims in those categories of insurance would be deposited. The bill would also make conforming changes.
(2) Existing law requires CIGA to adopt a plan of operation that requires a member insurer to recoup the premium charge paid by the member insurer through a surcharge on premiums charged for insurance policies in the year following the premium charge.
This bill would require the plan of operation to require a member insurer to recoup the premium charge amount, as determined by CIGA, through a surcharge on premiums, even if a premium charge has not yet been paid to CIGA because the member insurer had no direct written premium for that category of insurance for the prior year.
(3) This bill would include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIII A of the California Constitution, and thus would require for passage the approval of 2/3 of the membership of each house of the Legislature.
## Digest Key
## Bill Text
The people of the State of California do enact as follows:SECTION 1. Section 63049.64 of the Government Code is amended to read:63049.64. (a) The bank may issue bonds pursuant to Chapter 5 (commencing with Section 63070) and may loan the proceeds thereof to the association, and deposit the proceeds into a separate account in the fund, or use the proceeds to refund bonds previously issued under this article. Bond proceeds may also be used to fund necessary reserves, capitalized interest, credit enhancement costs, or costs of issuance.(b) Bonds issued under this article shall not be deemed to constitute a debt or liability of the state or of any political subdivision thereof, other than the bank, or a pledge of the faith and credit of the state or of any political subdivision, but shall be payable solely from the fund and other revenues and assets securing the bonds. All bonds issued under this article shall contain on the face of the bonds a statement to that effect.(c) For purposes of this article, the term project, as defined in subdivision (p) of Section 63010, shall include financing of the costs of claims of insolvent workers compensation insurers, insurers admitted to transact insurance in at least one of the categories described in paragraph (2) of subdivision (a) of Section 1063.5 of the Insurance Code, in an amount (together with associated costs of financing) that may be determined by the association in making a request for financing to the bank.SEC. 2. Section 1063.5 of the Insurance Code is amended to read:1063.5. (a) (1) To the extent necessary to secure funds for the association for payment of the administrative expenses of the association, covered claims of insolvent insurers, and for payment of reasonable costs of adjusting the claims, the association shall collect premium payments from its member insurers sufficient to discharge its obligations.(2) The association shall allocate its claim payments and costs, incurred or estimated to be incurred, to one or more of the following categories:(A) Workers compensation claims.(B) Homeowners claims and automobile claims, including all of the following:(i) Automobile material damage.(ii) Automobile liability (both personal injury and death and property damage).(iii) Medical payments.(iv) Uninsured motorist claims.(C) Claims other than workers compensation, homeowners, and automobile, as defined above.(3) Separate premium payments shall be required for each category.(4) The premium payments for each category shall be used to pay the claims and costs allocated to that category.(b) (1) The rate of premium charged shall be a uniform percentage of net direct written premium in the preceding calendar year applicable to that category.(2) The rate of premium charges to each member insurer in the appropriate categories shall be based on the net direct written premium of each member insurer as shown in the latest years annual financial statement on file with the commissioner.(3) In cases of a dispute as to the amount of the net direct written premium between the association and one of its member insurers, the written decision of the commissioner shall be final.(c) Within 90 days after the filing of an annual statement, each member insurer shall file a report to the association indicating the amount of premiums not subject to the associations premium charge and the amount of special excess workers compensation premiums for the preceding calendar year. The report is not required in any year in which a premium charge is not made by the association.(d) In charging premiums to member insurers, the association shall adjust, if necessary, the net direct written premiums shown on a member insurers annual statement by excluding any premiums written for any lines of insurance or types of coverage not covered by this article under paragraph (3) of subdivision (c) of Section 1063.1.(e) (1) The premium charged to any member insurer for any of the three categories or a category established by the association shall not be more than 2 percent of the net direct written premium unless there are bonds outstanding that were issued pursuant to Article 14.25 (commencing with Section 1063.50) or Article 14.26 (commencing with Section 1063.70).(2) If bonds issued pursuant to either article Article 14.26 (commencing with Section 1063.70) are outstanding, the premium charged to a member insurer for the category for which the bond proceeds are being used to pay claims and expenses shall not be more than 1 percent of the net direct written premium for that category.(f) (1) The association may exempt or defer, in whole or in part, the premium charge of any member insurer, if the premium charge would cause the member insurers financial statement to reflect an amount of capital or surplus less than the minimum amounts required for a certificate of authority by any jurisdiction in which the member insurer is authorized to transact insurance. However, during the period of deferment, no dividends shall be paid to shareholders or policyholders by the company whose premium charge was deferred.(2) Deferred premium charges shall be paid when the payment will not reduce capital or surplus below required minimums.(g) After all covered claims of insolvent insurers and expenses of administration have been paid, any unused premiums and any reimbursements or claims dividends from liquidators remaining in any category shall be retained by the association and applied to reduce future premium charges in the appropriate category.(h) The commissioner may suspend or revoke the certificate of authority to transact business in this state of a member insurer that fails to pay a premium when due and after demand has been made.(i) Interest at a rate equal to the current federal reserve discount rate plus 21/2 percent per annum shall be added to the premium of any member insurer that fails to submit the premium requested by the association within 30 days after the mailing request. However, in no event shall the interest rate exceed the legal maximum.(j) This section shall apply only to premium charges paid on or after January 1, 2017.SEC. 3. Section 1063.14 of the Insurance Code is amended to read:1063.14. (a) (1) The plan of operation adopted pursuant to subdivision (c) of Section 1063 shall contain provisions whereby each member insurer is required to recoup, in the year following the premium charge, a sum calculated to recoup the premium charge paid by the member insurer under this article by way of a surcharge on premiums charged for insurance policies to which this article applies.(2) Amounts recouped shall not be considered premiums for any other purpose, including the computation of gross premium tax or agents commission.(b) The plan of operation adopted pursuant to subdivision (c) of Section 1063 shall contain a provision requiring a member insurer to recoup the premium charge amount, as determined by the association, through a surcharge on premiums charged for insurance policies to which this article applies, even if a premium charge was not yet paid to the association because the member insurer had no direct written premium for insurance policies to which this article applies for the prior year. All surcharges collected in this manner shall be remitted to the association within 60 days of the end of the calendar year in which the surcharge is collected.(b)(c) (1) The amount of any surcharge shall be separately stated on either a billing or policy declaration sent to an insured. The association shall determine the rate of the surcharge and the collection period for each category, and these shall be mandatory for all member insurers of the association who write business in those categories.(2) Each member insurer shall file a report in accordance with the provisions of the plan of operation indicating the amount of surcharges it has collected.(A) Member insurers who collect surcharges in excess of premium charges paid in the preceding year pursuant to Section 1063.5 shall remit the excess to the association as an additional premium within 30 days after the association has determined the amount of the excess recoupment and given notice to the member insurer of that amount. The excess shall be applied to reduce future premium charges in the appropriate category.(B) Member insurers who report surcharge collections that are less than what they paid in the preceding years premium charge shall receive reimbursement from the association for the shortfall in surcharge collection.(C) Member insurers may amend their reports indicating the amount of surcharges collected for the prior five years if they discover there was an error in the original reports filed with the association.(c)(d) The plan of operation may permit a member insurer to omit collection of the surcharge from any of its insureds only if the expense of collecting the surcharge would exceed the amount of the surcharge, provided, however, that a member insurer is not entitled to reimbursement from the association pursuant to subparagraph (B) of paragraph (2) of subdivision (b) of any amount omitted from collection pursuant to this subdivision.(d)(e) This section applies only to premium charges paid on or after January 1, 2017.SEC. 4. Section 1063.16 of the Insurance Code is repealed.1063.16.The association, to the extent it determines necessary or desirable, may issue bonds pursuant to Article 14.26 (commencing with Section 1063.70) to provide funds to pay covered claims of insolvent insurers. The association may act as agent of the department to collect premium payments levied by the department on its member insurers. If the association borrows the proceeds of the bonds from the department, the association may assess an additional premium, not to exceed 2 percent of the net direct premium written by the member insurer, to be applied exclusively to the repayment of the loan. The revenue received from the additional premium shall be pledged to the repayment of the loan and shall be used exclusively for that purpose until the bonds have been paid or provision for the payment of them has been made.SEC. 5. Article 14.25 (commencing with Section 1063.50) of Chapter 1 of Part 2 of Division 1 of the Insurance Code is repealed.SEC. 6. The heading of Article 14.26 (commencing with Section 1063.70) of Chapter 1 of Part 2 of Division 1 of the Insurance Code is amended to read: Article 14.26. Workers Compensation California Insurance Guarantee Association Bond Fund FundsSEC. 7. Section 1063.70 of the Insurance Code is amended to read:1063.70. The California Insurance Guarantee Association is authorized to pay and discharge certain claims of insolvent insurers as defined in Section 1063.1 through the collection of premiums from its members, which amounts are limited by law and take time to assess and collect. This article provides for the ability of CIGA to request the issuance of bonds by the California Infrastructure and Economic Development Bank pursuant to Article 8 (commencing with Section 63049.6) of Chapter 2 of Division 1 of Title 6.7 of the Government Code to more expeditiously and effectively provide for the payment of covered claims that arise as a result of the insolvencies of insurance companies providing workers compensation insurance. insurers admitted to transact insurance in at least one of the categories described in paragraph (2) of subdivision (a) of Section 1063.5. The bonds are to be paid from the special bond assessments assessed by CIGA for those purposes and the other funds provided pursuant to Section 1063.74. Special bond assessments to repay bonds issued for payment of workers compensation insurance benefits shall be assessed, to the extent necessary, for the claims category. respective category for which bonds are issued. It is a public purpose and in the best interest of the public health, safety, and general welfare of the residents of this state to provide for the issuance of bonds to pay claimants and policyholders having covered claims against insolvent insurers operating in this state.SEC. 8. Section 1063.71 of the Insurance Code is amended to read:1063.71. (a) The terms member insurer, insolvent insurer, and covered claims have the meanings assigned those terms in Section 1063.1.(b)The terms CIGA, commissioner, board, and department have the meanings assigned those terms in Section 1063.51.(c)(b) Bank means the California Infrastructure and Economic Development Bank created pursuant to Article 1 (commencing with Section 63020) of Chapter 2, Division 1 of Title 6.7 of the Government Code.(c) Board means the board of governors of CIGA.(d) Bonds means bonds issued by the Bank pursuant to Article 8 (commencing with Section 63049.6) of Chapter 2 of Division 1 of Title 6.7 of the Government Code to provide funds for the payment of the covered claims and the adjusting and defense expenses relating to those claims that are issued at the request of the board pursuant to Section 1063.73.(e) Collateral means the special bond assessments, the right of CIGA to be paid the special bond assessments, all revenues therefrom, the separate account accounts of the Workers Comp Compensation Bond Fund, the Homeowners and Automobile Bond Fund, and the Other Bond Fund into which special bond assessments are deposited, and the proceeds thereof.(f) CIGA means the California Insurance Guarantee Association, established pursuant to Article 14.2 (commencing with Section 1063).(g) Commissioner means the Insurance Commissioner.(h) Department means the Department of Insurance.(i) Homeowners and Automobile Bond Fund means the fund created pursuant to subdivision (b) of Section 1063.72.(j) Other Bond Fund means the fund created pursuant to subdivision (c) of Section 1063.72.(f)(k) Special bond assessment means the premiums collected by CIGA pursuant to Section 1063.74.(g)(l) Workers Comp Compensation Bond Fund means the fund created pursuant to subdivision (a) of Section 1063.72.SEC. 9. Section 1063.72 of the Insurance Code is repealed.1063.72.The Workers Comp Bond Fund is hereby created. Proceeds from the sale of bonds shall be deposited in a separate account in the Workers Comp Bond Fund. Only CIGA, and with respect to payment of the bonds, the trustee for the bonds, shall have the ability to authorize disbursements from the separate account. Special bond assessments shall be deposited in a separate account in the Workers Comp Bond Fund and shall not be commingled with any other moneys. Only the trustee for the bonds shall have the ability to authorize disbursements from this separate account, and CIGA shall have no right or authority to authorize disbursements from this separate account. The Workers Comp Bond Fund shall be maintained with the trustee for the bonds. Following payment or provision for payment of the bonds, amounts in the Workers Comp Bond Fund shall be transferred to the fund that is designated in the indenture. All money in the Workers Comp Bond Fund and all special bond assessments shall be used by CIGA for the exclusive purpose of carrying out the purposes of this part, and, notwithstanding any other provisions of law, the Workers Comp Bond Fund shall not be a state fund, shall not be subject to the rules or procedures of any fund in the State Treasury, and application of the fund shall not be subject to the supervision or budgetary approval of any officer or division of state government. CIGA and the trustee for the bonds may as necessary or convenient to the accomplishment of any other purpose under this article, divide the fund into separate accounts.SEC. 10. Section 1063.72 is added to the Insurance Code, to read:1063.72. (a) The Workers Compensation Bond Fund is hereby created. (1) Proceeds from the sale of bonds with respect to the workers compensation category described in subparagraph (A) of paragraph (2) of subdivision (a) of Section 1063.5 shall be deposited in a separate account in the Workers Compensation Bond Fund. Only CIGA, and, with respect to payment of the bonds, the trustee for the bonds, shall have the ability to authorize disbursements from the separate account within the Workers Compensation Bond Fund.(2) Special bond assessments levied pursuant to Section 1063.74 with respect to the workers compensation category shall be deposited in a separate account in the Workers Compensation Bond Fund and shall not be commingled with any other moneys. Only the trustee for the bonds shall have the ability to authorize disbursements from this separate account within the Workers Compensation Bond Fund, and CIGA shall have no right or authority to authorize disbursements from this separate account.(3) The Workers Compensation Bond Fund shall be maintained with the trustee for the bonds. Following payment or provision for payment of the bonds, amounts in the Workers Compensation Bond Fund shall be transferred to the fund that is designated in the indenture for the bonds.(4) All money in the Workers Compensation Bond Fund and all special bond assessments levied pursuant to Section 1063.74 with respect to the workers compensation category shall be used by CIGA for the exclusive purpose of carrying out the purposes of this part. Notwithstanding any other law, the Workers Compensation Bond Fund is not a state fund and shall not be subject to the rules or procedures of any fund in the State Treasury, and application of the fund shall not be subject to the supervision or budgetary approval of any officer or division of state government.(5) CIGA and the trustee for the bonds may, as necessary or convenient to the accomplishment of any other purpose under this article, divide the Workers Compensation Bond Fund into separate accounts.(b) The Homeowners and Automobile Bond Fund is hereby created.(1) Proceeds from the sale of bonds with respect to the homeowners and automobile category described in subparagraph (B) of paragraph (2) of subdivision (a) of Section 1063.5 shall be deposited in a separate account in the Homeowners and Automobile Bond Fund. Only CIGA, and, with respect to payment of the bonds, the trustee for the bonds, shall have the ability to authorize disbursements from the separate account within the Homeowners and Automobile Bond Fund.(2) Special bond assessments levied pursuant to Section 1063.74 with respect to the homeowners and automobile category shall be deposited in a separate account in the Homeowners and Automobile Bond Fund and shall not be commingled with any other moneys. Only the trustee for the bonds shall have the ability to authorize disbursements from this separate account within the Homeowners and Automobile Bond Fund, and CIGA shall have no right or authority to authorize disbursements from this separate account.(3) The Homeowners and Automobile Bond Fund shall be maintained with the trustee for the bonds. Following payment or provision for payment of the bonds, amounts in the Homeowners and Automobile Bond Fund shall be transferred to the fund that is designated in the indenture for the bonds.(4) All money in the Homeowners and Automobile Bond Fund and all special bond assessments levied pursuant to Section 1063.74 with respect to the homeowners and automobile category shall be used by CIGA for the exclusive purpose of carrying out the purposes of this part. Notwithstanding any other law, the Homeowners and Automobile Bond Fund is not a state fund and shall not be subject to the rules or procedures of any fund in the State Treasury, and application of the fund shall not be subject to the supervision or budgetary approval of any officer or division of state government.(5) CIGA and the trustee for the bonds may, as necessary or convenient to the accomplishment of any other purpose under this article, divide the Homeowners and Automobile Bond Fund into separate accounts.(c) The Other Bond Fund is hereby created.(1) Proceeds from the sale of bonds with respect to the other category described in subparagraph (C) of paragraph (2) of subdivision (a) of Section 1063.5 shall be deposited in a separate account in the Other Bond Fund. Only CIGA, and, with respect to payment of the bonds, the trustee for the bonds, shall have the ability to authorize disbursements from the separate account within the Other Bond Fund.(2) Special bond assessments levied pursuant to Section 1063.74 with respect to the other category shall be deposited in a separate account in the Other Bond Fund and shall not be commingled with any other moneys. Only the trustee for the bonds shall have the ability to authorize disbursements from this separate account within the Other Bond Fund, and CIGA shall have no right or authority to authorize disbursements from this separate account.(3) The Other Bond Fund shall be maintained with the trustee for the bonds. Following payment or provision for payment of the bonds, amounts in the Other Bond Fund shall be transferred to the fund that is designated in the indenture for the bonds.(4) All money in the Other Bond Fund and all special bond assessments levied pursuant to Section 1063.74 with respect to the other category shall be used by CIGA for the exclusive purpose of carrying out the purposes of this part. Notwithstanding any other law, the Other Bond Fund is not a state fund and shall not be subject to the rules or procedures of any fund in the State Treasury, and application of the fund shall not be subject to the supervision or budgetary approval of any officer or division of state government.(5) CIGA and the trustee for the bonds may, as necessary or convenient to the accomplishment of any other purpose under this article, divide the Other Bond Fund into separate accounts.SEC. 11. Section 1063.73 of the Insurance Code is amended to read:1063.73. In the event CIGA determines that the insolvency of one or more member insurers providing workers compensation insurance insurance in at least one of the categories described in paragraph (2) of subdivision (a) of Section 1063.5 will result in covered claim obligations for workers compensation claims in excess of CIGAs capacity to pay from current funds, the board, in its sole discretion, may by resolution request the Bank to issue bonds pursuant to Article 8 (commencing with Section 63049.6) of Chapter 2 of Division 1 of Title 6.7 of the Government Code to provide funds for the payment of the covered claims and the adjusting and defense expenses relating to those claims. Notwithstanding any other provision of law, CIGA is hereby authorized to borrow proceeds of the bonds to provide for those purposes. CIGA may request the Bank to issue bonds pursuant to Article 8 (commencing with Section 63049.6) of Chapter 2 of Division 1 of Title 6.7 of the Government Code. CIGA shall provide the commissioner with a copy of the request and the commissioner may, within 30 days of receipt of the request, modify, cancel, or require a delay in the requested issuance. The proceeds of bonds issued for workers compensation any category of insurance benefits may be used by CIGA to reimburse funds advanced or temporarily loaned from other categories to fund workers compensation claims. categories.SEC. 12. 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, insurance in the category described in paragraph (2) of subdivision (a) of Section 1063.5 for which the bonds are issued, and shall be applied 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 initial 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.(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 of and interest on any bonds issued at the boards request and shall utilize, to the extent feasible, the recoveries from the liquidators of the estates of insolvent workers compensation carriers insurers in the respective category of insurance to pay bonds issued at the boards request to fund workers compensation claims. the corresponding insurance claims in that category of insurance.SEC. 13. Section 1063.75 of the Insurance Code is amended to read:1063.75. Any bonds Bonds issued to provide funds for covered claim obligations for workers compensation claims claims, homeowners and automobile claims, as described in subparagraph (B) of paragraph (2) of subdivision (a) of Section 1063.5, and other claims, as described in subparagraph (C) of paragraph (2) of subdivision (a) of Section 1063.5, shall be issued prior to January 1, 2026, in an aggregate principal amount outstanding for each category not to exceed at any one time not to exceed one billion five hundred million dollars ($1,500,000,000), and any ($1,500,000,000) for that category. Any bonds issued or issued to refund bonds shall not have a final maturity exceeding 20 years from the date of issuance. The bonds shall be issued at the request of CIGA, shall be in the form, shall bear the date or dates, and shall mature at the time or times as the indenture authorized by the request may provide. The bonds may be issued in one or more series, as serial bonds or as term bonds, or as a combination thereof, and, notwithstanding any other provision of law, the amount of principal of, or interest on, bonds maturing at each date of maturity need not be equal. The bonds shall bear interest at the rate or rates, variable or fixed or a combination thereof, be in the denominations, be in the form, either coupon or registered, carry the registration privileges, be executed in the manner, be payable in the medium of payment at the place or places within or without the state, be subject to the terms of redemption, contain the terms and conditions, and be secured by the covenants as the indenture may provide. The indenture may provide for the proceeds of the bonds and funds securing the bonds to be invested in any securities and investments, including investment agreements, as specified therein. CIGA may enter into or authorize any ancillary obligations or derivative agreements as it determines necessary or desirable to manage interest rate risk or security features related to the bonds. The bonds shall be sold at public or private sale by the Treasurer at, above, or below the principal amount thereof, on the terms and conditions and for the consideration in the medium of payment that the Treasurer shall determine prior to the sale.
The people of the State of California do enact as follows:
## The people of the State of California do enact as follows:
SECTION 1. Section 63049.64 of the Government Code is amended to read:63049.64. (a) The bank may issue bonds pursuant to Chapter 5 (commencing with Section 63070) and may loan the proceeds thereof to the association, and deposit the proceeds into a separate account in the fund, or use the proceeds to refund bonds previously issued under this article. Bond proceeds may also be used to fund necessary reserves, capitalized interest, credit enhancement costs, or costs of issuance.(b) Bonds issued under this article shall not be deemed to constitute a debt or liability of the state or of any political subdivision thereof, other than the bank, or a pledge of the faith and credit of the state or of any political subdivision, but shall be payable solely from the fund and other revenues and assets securing the bonds. All bonds issued under this article shall contain on the face of the bonds a statement to that effect.(c) For purposes of this article, the term project, as defined in subdivision (p) of Section 63010, shall include financing of the costs of claims of insolvent workers compensation insurers, insurers admitted to transact insurance in at least one of the categories described in paragraph (2) of subdivision (a) of Section 1063.5 of the Insurance Code, in an amount (together with associated costs of financing) that may be determined by the association in making a request for financing to the bank.
SECTION 1. Section 63049.64 of the Government Code is amended to read:
### SECTION 1.
63049.64. (a) The bank may issue bonds pursuant to Chapter 5 (commencing with Section 63070) and may loan the proceeds thereof to the association, and deposit the proceeds into a separate account in the fund, or use the proceeds to refund bonds previously issued under this article. Bond proceeds may also be used to fund necessary reserves, capitalized interest, credit enhancement costs, or costs of issuance.(b) Bonds issued under this article shall not be deemed to constitute a debt or liability of the state or of any political subdivision thereof, other than the bank, or a pledge of the faith and credit of the state or of any political subdivision, but shall be payable solely from the fund and other revenues and assets securing the bonds. All bonds issued under this article shall contain on the face of the bonds a statement to that effect.(c) For purposes of this article, the term project, as defined in subdivision (p) of Section 63010, shall include financing of the costs of claims of insolvent workers compensation insurers, insurers admitted to transact insurance in at least one of the categories described in paragraph (2) of subdivision (a) of Section 1063.5 of the Insurance Code, in an amount (together with associated costs of financing) that may be determined by the association in making a request for financing to the bank.
63049.64. (a) The bank may issue bonds pursuant to Chapter 5 (commencing with Section 63070) and may loan the proceeds thereof to the association, and deposit the proceeds into a separate account in the fund, or use the proceeds to refund bonds previously issued under this article. Bond proceeds may also be used to fund necessary reserves, capitalized interest, credit enhancement costs, or costs of issuance.(b) Bonds issued under this article shall not be deemed to constitute a debt or liability of the state or of any political subdivision thereof, other than the bank, or a pledge of the faith and credit of the state or of any political subdivision, but shall be payable solely from the fund and other revenues and assets securing the bonds. All bonds issued under this article shall contain on the face of the bonds a statement to that effect.(c) For purposes of this article, the term project, as defined in subdivision (p) of Section 63010, shall include financing of the costs of claims of insolvent workers compensation insurers, insurers admitted to transact insurance in at least one of the categories described in paragraph (2) of subdivision (a) of Section 1063.5 of the Insurance Code, in an amount (together with associated costs of financing) that may be determined by the association in making a request for financing to the bank.
63049.64. (a) The bank may issue bonds pursuant to Chapter 5 (commencing with Section 63070) and may loan the proceeds thereof to the association, and deposit the proceeds into a separate account in the fund, or use the proceeds to refund bonds previously issued under this article. Bond proceeds may also be used to fund necessary reserves, capitalized interest, credit enhancement costs, or costs of issuance.(b) Bonds issued under this article shall not be deemed to constitute a debt or liability of the state or of any political subdivision thereof, other than the bank, or a pledge of the faith and credit of the state or of any political subdivision, but shall be payable solely from the fund and other revenues and assets securing the bonds. All bonds issued under this article shall contain on the face of the bonds a statement to that effect.(c) For purposes of this article, the term project, as defined in subdivision (p) of Section 63010, shall include financing of the costs of claims of insolvent workers compensation insurers, insurers admitted to transact insurance in at least one of the categories described in paragraph (2) of subdivision (a) of Section 1063.5 of the Insurance Code, in an amount (together with associated costs of financing) that may be determined by the association in making a request for financing to the bank.
63049.64. (a) The bank may issue bonds pursuant to Chapter 5 (commencing with Section 63070) and may loan the proceeds thereof to the association, and deposit the proceeds into a separate account in the fund, or use the proceeds to refund bonds previously issued under this article. Bond proceeds may also be used to fund necessary reserves, capitalized interest, credit enhancement costs, or costs of issuance.
(b) Bonds issued under this article shall not be deemed to constitute a debt or liability of the state or of any political subdivision thereof, other than the bank, or a pledge of the faith and credit of the state or of any political subdivision, but shall be payable solely from the fund and other revenues and assets securing the bonds. All bonds issued under this article shall contain on the face of the bonds a statement to that effect.
(c) For purposes of this article, the term project, as defined in subdivision (p) of Section 63010, shall include financing of the costs of claims of insolvent workers compensation insurers, insurers admitted to transact insurance in at least one of the categories described in paragraph (2) of subdivision (a) of Section 1063.5 of the Insurance Code, in an amount (together with associated costs of financing) that may be determined by the association in making a request for financing to the bank.
SEC. 2. Section 1063.5 of the Insurance Code is amended to read:1063.5. (a) (1) To the extent necessary to secure funds for the association for payment of the administrative expenses of the association, covered claims of insolvent insurers, and for payment of reasonable costs of adjusting the claims, the association shall collect premium payments from its member insurers sufficient to discharge its obligations.(2) The association shall allocate its claim payments and costs, incurred or estimated to be incurred, to one or more of the following categories:(A) Workers compensation claims.(B) Homeowners claims and automobile claims, including all of the following:(i) Automobile material damage.(ii) Automobile liability (both personal injury and death and property damage).(iii) Medical payments.(iv) Uninsured motorist claims.(C) Claims other than workers compensation, homeowners, and automobile, as defined above.(3) Separate premium payments shall be required for each category.(4) The premium payments for each category shall be used to pay the claims and costs allocated to that category.(b) (1) The rate of premium charged shall be a uniform percentage of net direct written premium in the preceding calendar year applicable to that category.(2) The rate of premium charges to each member insurer in the appropriate categories shall be based on the net direct written premium of each member insurer as shown in the latest years annual financial statement on file with the commissioner.(3) In cases of a dispute as to the amount of the net direct written premium between the association and one of its member insurers, the written decision of the commissioner shall be final.(c) Within 90 days after the filing of an annual statement, each member insurer shall file a report to the association indicating the amount of premiums not subject to the associations premium charge and the amount of special excess workers compensation premiums for the preceding calendar year. The report is not required in any year in which a premium charge is not made by the association.(d) In charging premiums to member insurers, the association shall adjust, if necessary, the net direct written premiums shown on a member insurers annual statement by excluding any premiums written for any lines of insurance or types of coverage not covered by this article under paragraph (3) of subdivision (c) of Section 1063.1.(e) (1) The premium charged to any member insurer for any of the three categories or a category established by the association shall not be more than 2 percent of the net direct written premium unless there are bonds outstanding that were issued pursuant to Article 14.25 (commencing with Section 1063.50) or Article 14.26 (commencing with Section 1063.70).(2) If bonds issued pursuant to either article Article 14.26 (commencing with Section 1063.70) are outstanding, the premium charged to a member insurer for the category for which the bond proceeds are being used to pay claims and expenses shall not be more than 1 percent of the net direct written premium for that category.(f) (1) The association may exempt or defer, in whole or in part, the premium charge of any member insurer, if the premium charge would cause the member insurers financial statement to reflect an amount of capital or surplus less than the minimum amounts required for a certificate of authority by any jurisdiction in which the member insurer is authorized to transact insurance. However, during the period of deferment, no dividends shall be paid to shareholders or policyholders by the company whose premium charge was deferred.(2) Deferred premium charges shall be paid when the payment will not reduce capital or surplus below required minimums.(g) After all covered claims of insolvent insurers and expenses of administration have been paid, any unused premiums and any reimbursements or claims dividends from liquidators remaining in any category shall be retained by the association and applied to reduce future premium charges in the appropriate category.(h) The commissioner may suspend or revoke the certificate of authority to transact business in this state of a member insurer that fails to pay a premium when due and after demand has been made.(i) Interest at a rate equal to the current federal reserve discount rate plus 21/2 percent per annum shall be added to the premium of any member insurer that fails to submit the premium requested by the association within 30 days after the mailing request. However, in no event shall the interest rate exceed the legal maximum.(j) This section shall apply only to premium charges paid on or after January 1, 2017.
SEC. 2. Section 1063.5 of the Insurance Code is amended to read:
### SEC. 2.
1063.5. (a) (1) To the extent necessary to secure funds for the association for payment of the administrative expenses of the association, covered claims of insolvent insurers, and for payment of reasonable costs of adjusting the claims, the association shall collect premium payments from its member insurers sufficient to discharge its obligations.(2) The association shall allocate its claim payments and costs, incurred or estimated to be incurred, to one or more of the following categories:(A) Workers compensation claims.(B) Homeowners claims and automobile claims, including all of the following:(i) Automobile material damage.(ii) Automobile liability (both personal injury and death and property damage).(iii) Medical payments.(iv) Uninsured motorist claims.(C) Claims other than workers compensation, homeowners, and automobile, as defined above.(3) Separate premium payments shall be required for each category.(4) The premium payments for each category shall be used to pay the claims and costs allocated to that category.(b) (1) The rate of premium charged shall be a uniform percentage of net direct written premium in the preceding calendar year applicable to that category.(2) The rate of premium charges to each member insurer in the appropriate categories shall be based on the net direct written premium of each member insurer as shown in the latest years annual financial statement on file with the commissioner.(3) In cases of a dispute as to the amount of the net direct written premium between the association and one of its member insurers, the written decision of the commissioner shall be final.(c) Within 90 days after the filing of an annual statement, each member insurer shall file a report to the association indicating the amount of premiums not subject to the associations premium charge and the amount of special excess workers compensation premiums for the preceding calendar year. The report is not required in any year in which a premium charge is not made by the association.(d) In charging premiums to member insurers, the association shall adjust, if necessary, the net direct written premiums shown on a member insurers annual statement by excluding any premiums written for any lines of insurance or types of coverage not covered by this article under paragraph (3) of subdivision (c) of Section 1063.1.(e) (1) The premium charged to any member insurer for any of the three categories or a category established by the association shall not be more than 2 percent of the net direct written premium unless there are bonds outstanding that were issued pursuant to Article 14.25 (commencing with Section 1063.50) or Article 14.26 (commencing with Section 1063.70).(2) If bonds issued pursuant to either article Article 14.26 (commencing with Section 1063.70) are outstanding, the premium charged to a member insurer for the category for which the bond proceeds are being used to pay claims and expenses shall not be more than 1 percent of the net direct written premium for that category.(f) (1) The association may exempt or defer, in whole or in part, the premium charge of any member insurer, if the premium charge would cause the member insurers financial statement to reflect an amount of capital or surplus less than the minimum amounts required for a certificate of authority by any jurisdiction in which the member insurer is authorized to transact insurance. However, during the period of deferment, no dividends shall be paid to shareholders or policyholders by the company whose premium charge was deferred.(2) Deferred premium charges shall be paid when the payment will not reduce capital or surplus below required minimums.(g) After all covered claims of insolvent insurers and expenses of administration have been paid, any unused premiums and any reimbursements or claims dividends from liquidators remaining in any category shall be retained by the association and applied to reduce future premium charges in the appropriate category.(h) The commissioner may suspend or revoke the certificate of authority to transact business in this state of a member insurer that fails to pay a premium when due and after demand has been made.(i) Interest at a rate equal to the current federal reserve discount rate plus 21/2 percent per annum shall be added to the premium of any member insurer that fails to submit the premium requested by the association within 30 days after the mailing request. However, in no event shall the interest rate exceed the legal maximum.(j) This section shall apply only to premium charges paid on or after January 1, 2017.
1063.5. (a) (1) To the extent necessary to secure funds for the association for payment of the administrative expenses of the association, covered claims of insolvent insurers, and for payment of reasonable costs of adjusting the claims, the association shall collect premium payments from its member insurers sufficient to discharge its obligations.(2) The association shall allocate its claim payments and costs, incurred or estimated to be incurred, to one or more of the following categories:(A) Workers compensation claims.(B) Homeowners claims and automobile claims, including all of the following:(i) Automobile material damage.(ii) Automobile liability (both personal injury and death and property damage).(iii) Medical payments.(iv) Uninsured motorist claims.(C) Claims other than workers compensation, homeowners, and automobile, as defined above.(3) Separate premium payments shall be required for each category.(4) The premium payments for each category shall be used to pay the claims and costs allocated to that category.(b) (1) The rate of premium charged shall be a uniform percentage of net direct written premium in the preceding calendar year applicable to that category.(2) The rate of premium charges to each member insurer in the appropriate categories shall be based on the net direct written premium of each member insurer as shown in the latest years annual financial statement on file with the commissioner.(3) In cases of a dispute as to the amount of the net direct written premium between the association and one of its member insurers, the written decision of the commissioner shall be final.(c) Within 90 days after the filing of an annual statement, each member insurer shall file a report to the association indicating the amount of premiums not subject to the associations premium charge and the amount of special excess workers compensation premiums for the preceding calendar year. The report is not required in any year in which a premium charge is not made by the association.(d) In charging premiums to member insurers, the association shall adjust, if necessary, the net direct written premiums shown on a member insurers annual statement by excluding any premiums written for any lines of insurance or types of coverage not covered by this article under paragraph (3) of subdivision (c) of Section 1063.1.(e) (1) The premium charged to any member insurer for any of the three categories or a category established by the association shall not be more than 2 percent of the net direct written premium unless there are bonds outstanding that were issued pursuant to Article 14.25 (commencing with Section 1063.50) or Article 14.26 (commencing with Section 1063.70).(2) If bonds issued pursuant to either article Article 14.26 (commencing with Section 1063.70) are outstanding, the premium charged to a member insurer for the category for which the bond proceeds are being used to pay claims and expenses shall not be more than 1 percent of the net direct written premium for that category.(f) (1) The association may exempt or defer, in whole or in part, the premium charge of any member insurer, if the premium charge would cause the member insurers financial statement to reflect an amount of capital or surplus less than the minimum amounts required for a certificate of authority by any jurisdiction in which the member insurer is authorized to transact insurance. However, during the period of deferment, no dividends shall be paid to shareholders or policyholders by the company whose premium charge was deferred.(2) Deferred premium charges shall be paid when the payment will not reduce capital or surplus below required minimums.(g) After all covered claims of insolvent insurers and expenses of administration have been paid, any unused premiums and any reimbursements or claims dividends from liquidators remaining in any category shall be retained by the association and applied to reduce future premium charges in the appropriate category.(h) The commissioner may suspend or revoke the certificate of authority to transact business in this state of a member insurer that fails to pay a premium when due and after demand has been made.(i) Interest at a rate equal to the current federal reserve discount rate plus 21/2 percent per annum shall be added to the premium of any member insurer that fails to submit the premium requested by the association within 30 days after the mailing request. However, in no event shall the interest rate exceed the legal maximum.(j) This section shall apply only to premium charges paid on or after January 1, 2017.
1063.5. (a) (1) To the extent necessary to secure funds for the association for payment of the administrative expenses of the association, covered claims of insolvent insurers, and for payment of reasonable costs of adjusting the claims, the association shall collect premium payments from its member insurers sufficient to discharge its obligations.(2) The association shall allocate its claim payments and costs, incurred or estimated to be incurred, to one or more of the following categories:(A) Workers compensation claims.(B) Homeowners claims and automobile claims, including all of the following:(i) Automobile material damage.(ii) Automobile liability (both personal injury and death and property damage).(iii) Medical payments.(iv) Uninsured motorist claims.(C) Claims other than workers compensation, homeowners, and automobile, as defined above.(3) Separate premium payments shall be required for each category.(4) The premium payments for each category shall be used to pay the claims and costs allocated to that category.(b) (1) The rate of premium charged shall be a uniform percentage of net direct written premium in the preceding calendar year applicable to that category.(2) The rate of premium charges to each member insurer in the appropriate categories shall be based on the net direct written premium of each member insurer as shown in the latest years annual financial statement on file with the commissioner.(3) In cases of a dispute as to the amount of the net direct written premium between the association and one of its member insurers, the written decision of the commissioner shall be final.(c) Within 90 days after the filing of an annual statement, each member insurer shall file a report to the association indicating the amount of premiums not subject to the associations premium charge and the amount of special excess workers compensation premiums for the preceding calendar year. The report is not required in any year in which a premium charge is not made by the association.(d) In charging premiums to member insurers, the association shall adjust, if necessary, the net direct written premiums shown on a member insurers annual statement by excluding any premiums written for any lines of insurance or types of coverage not covered by this article under paragraph (3) of subdivision (c) of Section 1063.1.(e) (1) The premium charged to any member insurer for any of the three categories or a category established by the association shall not be more than 2 percent of the net direct written premium unless there are bonds outstanding that were issued pursuant to Article 14.25 (commencing with Section 1063.50) or Article 14.26 (commencing with Section 1063.70).(2) If bonds issued pursuant to either article Article 14.26 (commencing with Section 1063.70) are outstanding, the premium charged to a member insurer for the category for which the bond proceeds are being used to pay claims and expenses shall not be more than 1 percent of the net direct written premium for that category.(f) (1) The association may exempt or defer, in whole or in part, the premium charge of any member insurer, if the premium charge would cause the member insurers financial statement to reflect an amount of capital or surplus less than the minimum amounts required for a certificate of authority by any jurisdiction in which the member insurer is authorized to transact insurance. However, during the period of deferment, no dividends shall be paid to shareholders or policyholders by the company whose premium charge was deferred.(2) Deferred premium charges shall be paid when the payment will not reduce capital or surplus below required minimums.(g) After all covered claims of insolvent insurers and expenses of administration have been paid, any unused premiums and any reimbursements or claims dividends from liquidators remaining in any category shall be retained by the association and applied to reduce future premium charges in the appropriate category.(h) The commissioner may suspend or revoke the certificate of authority to transact business in this state of a member insurer that fails to pay a premium when due and after demand has been made.(i) Interest at a rate equal to the current federal reserve discount rate plus 21/2 percent per annum shall be added to the premium of any member insurer that fails to submit the premium requested by the association within 30 days after the mailing request. However, in no event shall the interest rate exceed the legal maximum.(j) This section shall apply only to premium charges paid on or after January 1, 2017.
1063.5. (a) (1) To the extent necessary to secure funds for the association for payment of the administrative expenses of the association, covered claims of insolvent insurers, and for payment of reasonable costs of adjusting the claims, the association shall collect premium payments from its member insurers sufficient to discharge its obligations.
(2) The association shall allocate its claim payments and costs, incurred or estimated to be incurred, to one or more of the following categories:
(A) Workers compensation claims.
(B) Homeowners claims and automobile claims, including all of the following:
(i) Automobile material damage.
(ii) Automobile liability (both personal injury and death and property damage).
(iii) Medical payments.
(iv) Uninsured motorist claims.
(C) Claims other than workers compensation, homeowners, and automobile, as defined above.
(3) Separate premium payments shall be required for each category.
(4) The premium payments for each category shall be used to pay the claims and costs allocated to that category.
(b) (1) The rate of premium charged shall be a uniform percentage of net direct written premium in the preceding calendar year applicable to that category.
(2) The rate of premium charges to each member insurer in the appropriate categories shall be based on the net direct written premium of each member insurer as shown in the latest years annual financial statement on file with the commissioner.
(3) In cases of a dispute as to the amount of the net direct written premium between the association and one of its member insurers, the written decision of the commissioner shall be final.
(c) Within 90 days after the filing of an annual statement, each member insurer shall file a report to the association indicating the amount of premiums not subject to the associations premium charge and the amount of special excess workers compensation premiums for the preceding calendar year. The report is not required in any year in which a premium charge is not made by the association.
(d) In charging premiums to member insurers, the association shall adjust, if necessary, the net direct written premiums shown on a member insurers annual statement by excluding any premiums written for any lines of insurance or types of coverage not covered by this article under paragraph (3) of subdivision (c) of Section 1063.1.
(e) (1) The premium charged to any member insurer for any of the three categories or a category established by the association shall not be more than 2 percent of the net direct written premium unless there are bonds outstanding that were issued pursuant to Article 14.25 (commencing with Section 1063.50) or Article 14.26 (commencing with Section 1063.70).
(2) If bonds issued pursuant to either article Article 14.26 (commencing with Section 1063.70) are outstanding, the premium charged to a member insurer for the category for which the bond proceeds are being used to pay claims and expenses shall not be more than 1 percent of the net direct written premium for that category.
(f) (1) The association may exempt or defer, in whole or in part, the premium charge of any member insurer, if the premium charge would cause the member insurers financial statement to reflect an amount of capital or surplus less than the minimum amounts required for a certificate of authority by any jurisdiction in which the member insurer is authorized to transact insurance. However, during the period of deferment, no dividends shall be paid to shareholders or policyholders by the company whose premium charge was deferred.
(2) Deferred premium charges shall be paid when the payment will not reduce capital or surplus below required minimums.
(g) After all covered claims of insolvent insurers and expenses of administration have been paid, any unused premiums and any reimbursements or claims dividends from liquidators remaining in any category shall be retained by the association and applied to reduce future premium charges in the appropriate category.
(h) The commissioner may suspend or revoke the certificate of authority to transact business in this state of a member insurer that fails to pay a premium when due and after demand has been made.
(i) Interest at a rate equal to the current federal reserve discount rate plus 21/2 percent per annum shall be added to the premium of any member insurer that fails to submit the premium requested by the association within 30 days after the mailing request. However, in no event shall the interest rate exceed the legal maximum.
(j) This section shall apply only to premium charges paid on or after January 1, 2017.
SEC. 3. Section 1063.14 of the Insurance Code is amended to read:1063.14. (a) (1) The plan of operation adopted pursuant to subdivision (c) of Section 1063 shall contain provisions whereby each member insurer is required to recoup, in the year following the premium charge, a sum calculated to recoup the premium charge paid by the member insurer under this article by way of a surcharge on premiums charged for insurance policies to which this article applies.(2) Amounts recouped shall not be considered premiums for any other purpose, including the computation of gross premium tax or agents commission.(b) The plan of operation adopted pursuant to subdivision (c) of Section 1063 shall contain a provision requiring a member insurer to recoup the premium charge amount, as determined by the association, through a surcharge on premiums charged for insurance policies to which this article applies, even if a premium charge was not yet paid to the association because the member insurer had no direct written premium for insurance policies to which this article applies for the prior year. All surcharges collected in this manner shall be remitted to the association within 60 days of the end of the calendar year in which the surcharge is collected.(b)(c) (1) The amount of any surcharge shall be separately stated on either a billing or policy declaration sent to an insured. The association shall determine the rate of the surcharge and the collection period for each category, and these shall be mandatory for all member insurers of the association who write business in those categories.(2) Each member insurer shall file a report in accordance with the provisions of the plan of operation indicating the amount of surcharges it has collected.(A) Member insurers who collect surcharges in excess of premium charges paid in the preceding year pursuant to Section 1063.5 shall remit the excess to the association as an additional premium within 30 days after the association has determined the amount of the excess recoupment and given notice to the member insurer of that amount. The excess shall be applied to reduce future premium charges in the appropriate category.(B) Member insurers who report surcharge collections that are less than what they paid in the preceding years premium charge shall receive reimbursement from the association for the shortfall in surcharge collection.(C) Member insurers may amend their reports indicating the amount of surcharges collected for the prior five years if they discover there was an error in the original reports filed with the association.(c)(d) The plan of operation may permit a member insurer to omit collection of the surcharge from any of its insureds only if the expense of collecting the surcharge would exceed the amount of the surcharge, provided, however, that a member insurer is not entitled to reimbursement from the association pursuant to subparagraph (B) of paragraph (2) of subdivision (b) of any amount omitted from collection pursuant to this subdivision.(d)(e) This section applies only to premium charges paid on or after January 1, 2017.
SEC. 3. Section 1063.14 of the Insurance Code is amended to read:
### SEC. 3.
1063.14. (a) (1) The plan of operation adopted pursuant to subdivision (c) of Section 1063 shall contain provisions whereby each member insurer is required to recoup, in the year following the premium charge, a sum calculated to recoup the premium charge paid by the member insurer under this article by way of a surcharge on premiums charged for insurance policies to which this article applies.(2) Amounts recouped shall not be considered premiums for any other purpose, including the computation of gross premium tax or agents commission.(b) The plan of operation adopted pursuant to subdivision (c) of Section 1063 shall contain a provision requiring a member insurer to recoup the premium charge amount, as determined by the association, through a surcharge on premiums charged for insurance policies to which this article applies, even if a premium charge was not yet paid to the association because the member insurer had no direct written premium for insurance policies to which this article applies for the prior year. All surcharges collected in this manner shall be remitted to the association within 60 days of the end of the calendar year in which the surcharge is collected.(b)(c) (1) The amount of any surcharge shall be separately stated on either a billing or policy declaration sent to an insured. The association shall determine the rate of the surcharge and the collection period for each category, and these shall be mandatory for all member insurers of the association who write business in those categories.(2) Each member insurer shall file a report in accordance with the provisions of the plan of operation indicating the amount of surcharges it has collected.(A) Member insurers who collect surcharges in excess of premium charges paid in the preceding year pursuant to Section 1063.5 shall remit the excess to the association as an additional premium within 30 days after the association has determined the amount of the excess recoupment and given notice to the member insurer of that amount. The excess shall be applied to reduce future premium charges in the appropriate category.(B) Member insurers who report surcharge collections that are less than what they paid in the preceding years premium charge shall receive reimbursement from the association for the shortfall in surcharge collection.(C) Member insurers may amend their reports indicating the amount of surcharges collected for the prior five years if they discover there was an error in the original reports filed with the association.(c)(d) The plan of operation may permit a member insurer to omit collection of the surcharge from any of its insureds only if the expense of collecting the surcharge would exceed the amount of the surcharge, provided, however, that a member insurer is not entitled to reimbursement from the association pursuant to subparagraph (B) of paragraph (2) of subdivision (b) of any amount omitted from collection pursuant to this subdivision.(d)(e) This section applies only to premium charges paid on or after January 1, 2017.
1063.14. (a) (1) The plan of operation adopted pursuant to subdivision (c) of Section 1063 shall contain provisions whereby each member insurer is required to recoup, in the year following the premium charge, a sum calculated to recoup the premium charge paid by the member insurer under this article by way of a surcharge on premiums charged for insurance policies to which this article applies.(2) Amounts recouped shall not be considered premiums for any other purpose, including the computation of gross premium tax or agents commission.(b) The plan of operation adopted pursuant to subdivision (c) of Section 1063 shall contain a provision requiring a member insurer to recoup the premium charge amount, as determined by the association, through a surcharge on premiums charged for insurance policies to which this article applies, even if a premium charge was not yet paid to the association because the member insurer had no direct written premium for insurance policies to which this article applies for the prior year. All surcharges collected in this manner shall be remitted to the association within 60 days of the end of the calendar year in which the surcharge is collected.(b)(c) (1) The amount of any surcharge shall be separately stated on either a billing or policy declaration sent to an insured. The association shall determine the rate of the surcharge and the collection period for each category, and these shall be mandatory for all member insurers of the association who write business in those categories.(2) Each member insurer shall file a report in accordance with the provisions of the plan of operation indicating the amount of surcharges it has collected.(A) Member insurers who collect surcharges in excess of premium charges paid in the preceding year pursuant to Section 1063.5 shall remit the excess to the association as an additional premium within 30 days after the association has determined the amount of the excess recoupment and given notice to the member insurer of that amount. The excess shall be applied to reduce future premium charges in the appropriate category.(B) Member insurers who report surcharge collections that are less than what they paid in the preceding years premium charge shall receive reimbursement from the association for the shortfall in surcharge collection.(C) Member insurers may amend their reports indicating the amount of surcharges collected for the prior five years if they discover there was an error in the original reports filed with the association.(c)(d) The plan of operation may permit a member insurer to omit collection of the surcharge from any of its insureds only if the expense of collecting the surcharge would exceed the amount of the surcharge, provided, however, that a member insurer is not entitled to reimbursement from the association pursuant to subparagraph (B) of paragraph (2) of subdivision (b) of any amount omitted from collection pursuant to this subdivision.(d)(e) This section applies only to premium charges paid on or after January 1, 2017.
1063.14. (a) (1) The plan of operation adopted pursuant to subdivision (c) of Section 1063 shall contain provisions whereby each member insurer is required to recoup, in the year following the premium charge, a sum calculated to recoup the premium charge paid by the member insurer under this article by way of a surcharge on premiums charged for insurance policies to which this article applies.(2) Amounts recouped shall not be considered premiums for any other purpose, including the computation of gross premium tax or agents commission.(b) The plan of operation adopted pursuant to subdivision (c) of Section 1063 shall contain a provision requiring a member insurer to recoup the premium charge amount, as determined by the association, through a surcharge on premiums charged for insurance policies to which this article applies, even if a premium charge was not yet paid to the association because the member insurer had no direct written premium for insurance policies to which this article applies for the prior year. All surcharges collected in this manner shall be remitted to the association within 60 days of the end of the calendar year in which the surcharge is collected.(b)(c) (1) The amount of any surcharge shall be separately stated on either a billing or policy declaration sent to an insured. The association shall determine the rate of the surcharge and the collection period for each category, and these shall be mandatory for all member insurers of the association who write business in those categories.(2) Each member insurer shall file a report in accordance with the provisions of the plan of operation indicating the amount of surcharges it has collected.(A) Member insurers who collect surcharges in excess of premium charges paid in the preceding year pursuant to Section 1063.5 shall remit the excess to the association as an additional premium within 30 days after the association has determined the amount of the excess recoupment and given notice to the member insurer of that amount. The excess shall be applied to reduce future premium charges in the appropriate category.(B) Member insurers who report surcharge collections that are less than what they paid in the preceding years premium charge shall receive reimbursement from the association for the shortfall in surcharge collection.(C) Member insurers may amend their reports indicating the amount of surcharges collected for the prior five years if they discover there was an error in the original reports filed with the association.(c)(d) The plan of operation may permit a member insurer to omit collection of the surcharge from any of its insureds only if the expense of collecting the surcharge would exceed the amount of the surcharge, provided, however, that a member insurer is not entitled to reimbursement from the association pursuant to subparagraph (B) of paragraph (2) of subdivision (b) of any amount omitted from collection pursuant to this subdivision.(d)(e) This section applies only to premium charges paid on or after January 1, 2017.
1063.14. (a) (1) The plan of operation adopted pursuant to subdivision (c) of Section 1063 shall contain provisions whereby each member insurer is required to recoup, in the year following the premium charge, a sum calculated to recoup the premium charge paid by the member insurer under this article by way of a surcharge on premiums charged for insurance policies to which this article applies.
(2) Amounts recouped shall not be considered premiums for any other purpose, including the computation of gross premium tax or agents commission.
(b) The plan of operation adopted pursuant to subdivision (c) of Section 1063 shall contain a provision requiring a member insurer to recoup the premium charge amount, as determined by the association, through a surcharge on premiums charged for insurance policies to which this article applies, even if a premium charge was not yet paid to the association because the member insurer had no direct written premium for insurance policies to which this article applies for the prior year. All surcharges collected in this manner shall be remitted to the association within 60 days of the end of the calendar year in which the surcharge is collected.
(b)
(c) (1) The amount of any surcharge shall be separately stated on either a billing or policy declaration sent to an insured. The association shall determine the rate of the surcharge and the collection period for each category, and these shall be mandatory for all member insurers of the association who write business in those categories.
(2) Each member insurer shall file a report in accordance with the provisions of the plan of operation indicating the amount of surcharges it has collected.
(A) Member insurers who collect surcharges in excess of premium charges paid in the preceding year pursuant to Section 1063.5 shall remit the excess to the association as an additional premium within 30 days after the association has determined the amount of the excess recoupment and given notice to the member insurer of that amount. The excess shall be applied to reduce future premium charges in the appropriate category.
(B) Member insurers who report surcharge collections that are less than what they paid in the preceding years premium charge shall receive reimbursement from the association for the shortfall in surcharge collection.
(C) Member insurers may amend their reports indicating the amount of surcharges collected for the prior five years if they discover there was an error in the original reports filed with the association.
(c)
(d) The plan of operation may permit a member insurer to omit collection of the surcharge from any of its insureds only if the expense of collecting the surcharge would exceed the amount of the surcharge, provided, however, that a member insurer is not entitled to reimbursement from the association pursuant to subparagraph (B) of paragraph (2) of subdivision (b) of any amount omitted from collection pursuant to this subdivision.
(d)
(e) This section applies only to premium charges paid on or after January 1, 2017.
SEC. 4. Section 1063.16 of the Insurance Code is repealed.1063.16.The association, to the extent it determines necessary or desirable, may issue bonds pursuant to Article 14.26 (commencing with Section 1063.70) to provide funds to pay covered claims of insolvent insurers. The association may act as agent of the department to collect premium payments levied by the department on its member insurers. If the association borrows the proceeds of the bonds from the department, the association may assess an additional premium, not to exceed 2 percent of the net direct premium written by the member insurer, to be applied exclusively to the repayment of the loan. The revenue received from the additional premium shall be pledged to the repayment of the loan and shall be used exclusively for that purpose until the bonds have been paid or provision for the payment of them has been made.
SEC. 4. Section 1063.16 of the Insurance Code is repealed.
### SEC. 4.
1063.16.The association, to the extent it determines necessary or desirable, may issue bonds pursuant to Article 14.26 (commencing with Section 1063.70) to provide funds to pay covered claims of insolvent insurers. The association may act as agent of the department to collect premium payments levied by the department on its member insurers. If the association borrows the proceeds of the bonds from the department, the association may assess an additional premium, not to exceed 2 percent of the net direct premium written by the member insurer, to be applied exclusively to the repayment of the loan. The revenue received from the additional premium shall be pledged to the repayment of the loan and shall be used exclusively for that purpose until the bonds have been paid or provision for the payment of them has been made.
The association, to the extent it determines necessary or desirable, may issue bonds pursuant to Article 14.26 (commencing with Section 1063.70) to provide funds to pay covered claims of insolvent insurers. The association may act as agent of the department to collect premium payments levied by the department on its member insurers. If the association borrows the proceeds of the bonds from the department, the association may assess an additional premium, not to exceed 2 percent of the net direct premium written by the member insurer, to be applied exclusively to the repayment of the loan. The revenue received from the additional premium shall be pledged to the repayment of the loan and shall be used exclusively for that purpose until the bonds have been paid or provision for the payment of them has been made.
SEC. 5. Article 14.25 (commencing with Section 1063.50) of Chapter 1 of Part 2 of Division 1 of the Insurance Code is repealed.
SEC. 5. Article 14.25 (commencing with Section 1063.50) of Chapter 1 of Part 2 of Division 1 of the Insurance Code is repealed.
### SEC. 5.
SEC. 6. The heading of Article 14.26 (commencing with Section 1063.70) of Chapter 1 of Part 2 of Division 1 of the Insurance Code is amended to read: Article 14.26. Workers Compensation California Insurance Guarantee Association Bond Fund Funds
SEC. 6. The heading of Article 14.26 (commencing with Section 1063.70) of Chapter 1 of Part 2 of Division 1 of the Insurance Code is amended to read:
### SEC. 6.
Article 14.26. Workers Compensation California Insurance Guarantee Association Bond Fund Funds
Article 14.26. Workers Compensation California Insurance Guarantee Association Bond Fund Funds
Article 14.26. Workers Compensation California Insurance Guarantee Association Bond Fund Funds
Article 14.26. Workers Compensation California Insurance Guarantee Association Bond Fund Funds
SEC. 7. Section 1063.70 of the Insurance Code is amended to read:1063.70. The California Insurance Guarantee Association is authorized to pay and discharge certain claims of insolvent insurers as defined in Section 1063.1 through the collection of premiums from its members, which amounts are limited by law and take time to assess and collect. This article provides for the ability of CIGA to request the issuance of bonds by the California Infrastructure and Economic Development Bank pursuant to Article 8 (commencing with Section 63049.6) of Chapter 2 of Division 1 of Title 6.7 of the Government Code to more expeditiously and effectively provide for the payment of covered claims that arise as a result of the insolvencies of insurance companies providing workers compensation insurance. insurers admitted to transact insurance in at least one of the categories described in paragraph (2) of subdivision (a) of Section 1063.5. The bonds are to be paid from the special bond assessments assessed by CIGA for those purposes and the other funds provided pursuant to Section 1063.74. Special bond assessments to repay bonds issued for payment of workers compensation insurance benefits shall be assessed, to the extent necessary, for the claims category. respective category for which bonds are issued. It is a public purpose and in the best interest of the public health, safety, and general welfare of the residents of this state to provide for the issuance of bonds to pay claimants and policyholders having covered claims against insolvent insurers operating in this state.
SEC. 7. Section 1063.70 of the Insurance Code is amended to read:
### SEC. 7.
1063.70. The California Insurance Guarantee Association is authorized to pay and discharge certain claims of insolvent insurers as defined in Section 1063.1 through the collection of premiums from its members, which amounts are limited by law and take time to assess and collect. This article provides for the ability of CIGA to request the issuance of bonds by the California Infrastructure and Economic Development Bank pursuant to Article 8 (commencing with Section 63049.6) of Chapter 2 of Division 1 of Title 6.7 of the Government Code to more expeditiously and effectively provide for the payment of covered claims that arise as a result of the insolvencies of insurance companies providing workers compensation insurance. insurers admitted to transact insurance in at least one of the categories described in paragraph (2) of subdivision (a) of Section 1063.5. The bonds are to be paid from the special bond assessments assessed by CIGA for those purposes and the other funds provided pursuant to Section 1063.74. Special bond assessments to repay bonds issued for payment of workers compensation insurance benefits shall be assessed, to the extent necessary, for the claims category. respective category for which bonds are issued. It is a public purpose and in the best interest of the public health, safety, and general welfare of the residents of this state to provide for the issuance of bonds to pay claimants and policyholders having covered claims against insolvent insurers operating in this state.
1063.70. The California Insurance Guarantee Association is authorized to pay and discharge certain claims of insolvent insurers as defined in Section 1063.1 through the collection of premiums from its members, which amounts are limited by law and take time to assess and collect. This article provides for the ability of CIGA to request the issuance of bonds by the California Infrastructure and Economic Development Bank pursuant to Article 8 (commencing with Section 63049.6) of Chapter 2 of Division 1 of Title 6.7 of the Government Code to more expeditiously and effectively provide for the payment of covered claims that arise as a result of the insolvencies of insurance companies providing workers compensation insurance. insurers admitted to transact insurance in at least one of the categories described in paragraph (2) of subdivision (a) of Section 1063.5. The bonds are to be paid from the special bond assessments assessed by CIGA for those purposes and the other funds provided pursuant to Section 1063.74. Special bond assessments to repay bonds issued for payment of workers compensation insurance benefits shall be assessed, to the extent necessary, for the claims category. respective category for which bonds are issued. It is a public purpose and in the best interest of the public health, safety, and general welfare of the residents of this state to provide for the issuance of bonds to pay claimants and policyholders having covered claims against insolvent insurers operating in this state.
1063.70. The California Insurance Guarantee Association is authorized to pay and discharge certain claims of insolvent insurers as defined in Section 1063.1 through the collection of premiums from its members, which amounts are limited by law and take time to assess and collect. This article provides for the ability of CIGA to request the issuance of bonds by the California Infrastructure and Economic Development Bank pursuant to Article 8 (commencing with Section 63049.6) of Chapter 2 of Division 1 of Title 6.7 of the Government Code to more expeditiously and effectively provide for the payment of covered claims that arise as a result of the insolvencies of insurance companies providing workers compensation insurance. insurers admitted to transact insurance in at least one of the categories described in paragraph (2) of subdivision (a) of Section 1063.5. The bonds are to be paid from the special bond assessments assessed by CIGA for those purposes and the other funds provided pursuant to Section 1063.74. Special bond assessments to repay bonds issued for payment of workers compensation insurance benefits shall be assessed, to the extent necessary, for the claims category. respective category for which bonds are issued. It is a public purpose and in the best interest of the public health, safety, and general welfare of the residents of this state to provide for the issuance of bonds to pay claimants and policyholders having covered claims against insolvent insurers operating in this state.
1063.70. The California Insurance Guarantee Association is authorized to pay and discharge certain claims of insolvent insurers as defined in Section 1063.1 through the collection of premiums from its members, which amounts are limited by law and take time to assess and collect. This article provides for the ability of CIGA to request the issuance of bonds by the California Infrastructure and Economic Development Bank pursuant to Article 8 (commencing with Section 63049.6) of Chapter 2 of Division 1 of Title 6.7 of the Government Code to more expeditiously and effectively provide for the payment of covered claims that arise as a result of the insolvencies of insurance companies providing workers compensation insurance. insurers admitted to transact insurance in at least one of the categories described in paragraph (2) of subdivision (a) of Section 1063.5. The bonds are to be paid from the special bond assessments assessed by CIGA for those purposes and the other funds provided pursuant to Section 1063.74. Special bond assessments to repay bonds issued for payment of workers compensation insurance benefits shall be assessed, to the extent necessary, for the claims category. respective category for which bonds are issued. It is a public purpose and in the best interest of the public health, safety, and general welfare of the residents of this state to provide for the issuance of bonds to pay claimants and policyholders having covered claims against insolvent insurers operating in this state.
SEC. 8. Section 1063.71 of the Insurance Code is amended to read:1063.71. (a) The terms member insurer, insolvent insurer, and covered claims have the meanings assigned those terms in Section 1063.1.(b)The terms CIGA, commissioner, board, and department have the meanings assigned those terms in Section 1063.51.(c)(b) Bank means the California Infrastructure and Economic Development Bank created pursuant to Article 1 (commencing with Section 63020) of Chapter 2, Division 1 of Title 6.7 of the Government Code.(c) Board means the board of governors of CIGA.(d) Bonds means bonds issued by the Bank pursuant to Article 8 (commencing with Section 63049.6) of Chapter 2 of Division 1 of Title 6.7 of the Government Code to provide funds for the payment of the covered claims and the adjusting and defense expenses relating to those claims that are issued at the request of the board pursuant to Section 1063.73.(e) Collateral means the special bond assessments, the right of CIGA to be paid the special bond assessments, all revenues therefrom, the separate account accounts of the Workers Comp Compensation Bond Fund, the Homeowners and Automobile Bond Fund, and the Other Bond Fund into which special bond assessments are deposited, and the proceeds thereof.(f) CIGA means the California Insurance Guarantee Association, established pursuant to Article 14.2 (commencing with Section 1063).(g) Commissioner means the Insurance Commissioner.(h) Department means the Department of Insurance.(i) Homeowners and Automobile Bond Fund means the fund created pursuant to subdivision (b) of Section 1063.72.(j) Other Bond Fund means the fund created pursuant to subdivision (c) of Section 1063.72.(f)(k) Special bond assessment means the premiums collected by CIGA pursuant to Section 1063.74.(g)(l) Workers Comp Compensation Bond Fund means the fund created pursuant to subdivision (a) of Section 1063.72.
SEC. 8. Section 1063.71 of the Insurance Code is amended to read:
### SEC. 8.
1063.71. (a) The terms member insurer, insolvent insurer, and covered claims have the meanings assigned those terms in Section 1063.1.(b)The terms CIGA, commissioner, board, and department have the meanings assigned those terms in Section 1063.51.(c)(b) Bank means the California Infrastructure and Economic Development Bank created pursuant to Article 1 (commencing with Section 63020) of Chapter 2, Division 1 of Title 6.7 of the Government Code.(c) Board means the board of governors of CIGA.(d) Bonds means bonds issued by the Bank pursuant to Article 8 (commencing with Section 63049.6) of Chapter 2 of Division 1 of Title 6.7 of the Government Code to provide funds for the payment of the covered claims and the adjusting and defense expenses relating to those claims that are issued at the request of the board pursuant to Section 1063.73.(e) Collateral means the special bond assessments, the right of CIGA to be paid the special bond assessments, all revenues therefrom, the separate account accounts of the Workers Comp Compensation Bond Fund, the Homeowners and Automobile Bond Fund, and the Other Bond Fund into which special bond assessments are deposited, and the proceeds thereof.(f) CIGA means the California Insurance Guarantee Association, established pursuant to Article 14.2 (commencing with Section 1063).(g) Commissioner means the Insurance Commissioner.(h) Department means the Department of Insurance.(i) Homeowners and Automobile Bond Fund means the fund created pursuant to subdivision (b) of Section 1063.72.(j) Other Bond Fund means the fund created pursuant to subdivision (c) of Section 1063.72.(f)(k) Special bond assessment means the premiums collected by CIGA pursuant to Section 1063.74.(g)(l) Workers Comp Compensation Bond Fund means the fund created pursuant to subdivision (a) of Section 1063.72.
1063.71. (a) The terms member insurer, insolvent insurer, and covered claims have the meanings assigned those terms in Section 1063.1.(b)The terms CIGA, commissioner, board, and department have the meanings assigned those terms in Section 1063.51.(c)(b) Bank means the California Infrastructure and Economic Development Bank created pursuant to Article 1 (commencing with Section 63020) of Chapter 2, Division 1 of Title 6.7 of the Government Code.(c) Board means the board of governors of CIGA.(d) Bonds means bonds issued by the Bank pursuant to Article 8 (commencing with Section 63049.6) of Chapter 2 of Division 1 of Title 6.7 of the Government Code to provide funds for the payment of the covered claims and the adjusting and defense expenses relating to those claims that are issued at the request of the board pursuant to Section 1063.73.(e) Collateral means the special bond assessments, the right of CIGA to be paid the special bond assessments, all revenues therefrom, the separate account accounts of the Workers Comp Compensation Bond Fund, the Homeowners and Automobile Bond Fund, and the Other Bond Fund into which special bond assessments are deposited, and the proceeds thereof.(f) CIGA means the California Insurance Guarantee Association, established pursuant to Article 14.2 (commencing with Section 1063).(g) Commissioner means the Insurance Commissioner.(h) Department means the Department of Insurance.(i) Homeowners and Automobile Bond Fund means the fund created pursuant to subdivision (b) of Section 1063.72.(j) Other Bond Fund means the fund created pursuant to subdivision (c) of Section 1063.72.(f)(k) Special bond assessment means the premiums collected by CIGA pursuant to Section 1063.74.(g)(l) Workers Comp Compensation Bond Fund means the fund created pursuant to subdivision (a) of Section 1063.72.
1063.71. (a) The terms member insurer, insolvent insurer, and covered claims have the meanings assigned those terms in Section 1063.1.(b)The terms CIGA, commissioner, board, and department have the meanings assigned those terms in Section 1063.51.(c)(b) Bank means the California Infrastructure and Economic Development Bank created pursuant to Article 1 (commencing with Section 63020) of Chapter 2, Division 1 of Title 6.7 of the Government Code.(c) Board means the board of governors of CIGA.(d) Bonds means bonds issued by the Bank pursuant to Article 8 (commencing with Section 63049.6) of Chapter 2 of Division 1 of Title 6.7 of the Government Code to provide funds for the payment of the covered claims and the adjusting and defense expenses relating to those claims that are issued at the request of the board pursuant to Section 1063.73.(e) Collateral means the special bond assessments, the right of CIGA to be paid the special bond assessments, all revenues therefrom, the separate account accounts of the Workers Comp Compensation Bond Fund, the Homeowners and Automobile Bond Fund, and the Other Bond Fund into which special bond assessments are deposited, and the proceeds thereof.(f) CIGA means the California Insurance Guarantee Association, established pursuant to Article 14.2 (commencing with Section 1063).(g) Commissioner means the Insurance Commissioner.(h) Department means the Department of Insurance.(i) Homeowners and Automobile Bond Fund means the fund created pursuant to subdivision (b) of Section 1063.72.(j) Other Bond Fund means the fund created pursuant to subdivision (c) of Section 1063.72.(f)(k) Special bond assessment means the premiums collected by CIGA pursuant to Section 1063.74.(g)(l) Workers Comp Compensation Bond Fund means the fund created pursuant to subdivision (a) of Section 1063.72.
1063.71. (a) The terms member insurer, insolvent insurer, and covered claims have the meanings assigned those terms in Section 1063.1.
(b)The terms CIGA, commissioner, board, and department have the meanings assigned those terms in Section 1063.51.
(c)
(b) Bank means the California Infrastructure and Economic Development Bank created pursuant to Article 1 (commencing with Section 63020) of Chapter 2, Division 1 of Title 6.7 of the Government Code.
(c) Board means the board of governors of CIGA.
(d) Bonds means bonds issued by the Bank pursuant to Article 8 (commencing with Section 63049.6) of Chapter 2 of Division 1 of Title 6.7 of the Government Code to provide funds for the payment of the covered claims and the adjusting and defense expenses relating to those claims that are issued at the request of the board pursuant to Section 1063.73.
(e) Collateral means the special bond assessments, the right of CIGA to be paid the special bond assessments, all revenues therefrom, the separate account accounts of the Workers Comp Compensation Bond Fund, the Homeowners and Automobile Bond Fund, and the Other Bond Fund into which special bond assessments are deposited, and the proceeds thereof.
(f) CIGA means the California Insurance Guarantee Association, established pursuant to Article 14.2 (commencing with Section 1063).
(g) Commissioner means the Insurance Commissioner.
(h) Department means the Department of Insurance.
(i) Homeowners and Automobile Bond Fund means the fund created pursuant to subdivision (b) of Section 1063.72.
(j) Other Bond Fund means the fund created pursuant to subdivision (c) of Section 1063.72.
(f)
(k) Special bond assessment means the premiums collected by CIGA pursuant to Section 1063.74.
(g)
(l) Workers Comp Compensation Bond Fund means the fund created pursuant to subdivision (a) of Section 1063.72.
SEC. 9. Section 1063.72 of the Insurance Code is repealed.1063.72.The Workers Comp Bond Fund is hereby created. Proceeds from the sale of bonds shall be deposited in a separate account in the Workers Comp Bond Fund. Only CIGA, and with respect to payment of the bonds, the trustee for the bonds, shall have the ability to authorize disbursements from the separate account. Special bond assessments shall be deposited in a separate account in the Workers Comp Bond Fund and shall not be commingled with any other moneys. Only the trustee for the bonds shall have the ability to authorize disbursements from this separate account, and CIGA shall have no right or authority to authorize disbursements from this separate account. The Workers Comp Bond Fund shall be maintained with the trustee for the bonds. Following payment or provision for payment of the bonds, amounts in the Workers Comp Bond Fund shall be transferred to the fund that is designated in the indenture. All money in the Workers Comp Bond Fund and all special bond assessments shall be used by CIGA for the exclusive purpose of carrying out the purposes of this part, and, notwithstanding any other provisions of law, the Workers Comp Bond Fund shall not be a state fund, shall not be subject to the rules or procedures of any fund in the State Treasury, and application of the fund shall not be subject to the supervision or budgetary approval of any officer or division of state government. CIGA and the trustee for the bonds may as necessary or convenient to the accomplishment of any other purpose under this article, divide the fund into separate accounts.
SEC. 9. Section 1063.72 of the Insurance Code is repealed.
### SEC. 9.
1063.72.The Workers Comp Bond Fund is hereby created. Proceeds from the sale of bonds shall be deposited in a separate account in the Workers Comp Bond Fund. Only CIGA, and with respect to payment of the bonds, the trustee for the bonds, shall have the ability to authorize disbursements from the separate account. Special bond assessments shall be deposited in a separate account in the Workers Comp Bond Fund and shall not be commingled with any other moneys. Only the trustee for the bonds shall have the ability to authorize disbursements from this separate account, and CIGA shall have no right or authority to authorize disbursements from this separate account. The Workers Comp Bond Fund shall be maintained with the trustee for the bonds. Following payment or provision for payment of the bonds, amounts in the Workers Comp Bond Fund shall be transferred to the fund that is designated in the indenture. All money in the Workers Comp Bond Fund and all special bond assessments shall be used by CIGA for the exclusive purpose of carrying out the purposes of this part, and, notwithstanding any other provisions of law, the Workers Comp Bond Fund shall not be a state fund, shall not be subject to the rules or procedures of any fund in the State Treasury, and application of the fund shall not be subject to the supervision or budgetary approval of any officer or division of state government. CIGA and the trustee for the bonds may as necessary or convenient to the accomplishment of any other purpose under this article, divide the fund into separate accounts.
The Workers Comp Bond Fund is hereby created. Proceeds from the sale of bonds shall be deposited in a separate account in the Workers Comp Bond Fund. Only CIGA, and with respect to payment of the bonds, the trustee for the bonds, shall have the ability to authorize disbursements from the separate account. Special bond assessments shall be deposited in a separate account in the Workers Comp Bond Fund and shall not be commingled with any other moneys. Only the trustee for the bonds shall have the ability to authorize disbursements from this separate account, and CIGA shall have no right or authority to authorize disbursements from this separate account. The Workers Comp Bond Fund shall be maintained with the trustee for the bonds. Following payment or provision for payment of the bonds, amounts in the Workers Comp Bond Fund shall be transferred to the fund that is designated in the indenture. All money in the Workers Comp Bond Fund and all special bond assessments shall be used by CIGA for the exclusive purpose of carrying out the purposes of this part, and, notwithstanding any other provisions of law, the Workers Comp Bond Fund shall not be a state fund, shall not be subject to the rules or procedures of any fund in the State Treasury, and application of the fund shall not be subject to the supervision or budgetary approval of any officer or division of state government. CIGA and the trustee for the bonds may as necessary or convenient to the accomplishment of any other purpose under this article, divide the fund into separate accounts.
SEC. 10. Section 1063.72 is added to the Insurance Code, to read:1063.72. (a) The Workers Compensation Bond Fund is hereby created. (1) Proceeds from the sale of bonds with respect to the workers compensation category described in subparagraph (A) of paragraph (2) of subdivision (a) of Section 1063.5 shall be deposited in a separate account in the Workers Compensation Bond Fund. Only CIGA, and, with respect to payment of the bonds, the trustee for the bonds, shall have the ability to authorize disbursements from the separate account within the Workers Compensation Bond Fund.(2) Special bond assessments levied pursuant to Section 1063.74 with respect to the workers compensation category shall be deposited in a separate account in the Workers Compensation Bond Fund and shall not be commingled with any other moneys. Only the trustee for the bonds shall have the ability to authorize disbursements from this separate account within the Workers Compensation Bond Fund, and CIGA shall have no right or authority to authorize disbursements from this separate account.(3) The Workers Compensation Bond Fund shall be maintained with the trustee for the bonds. Following payment or provision for payment of the bonds, amounts in the Workers Compensation Bond Fund shall be transferred to the fund that is designated in the indenture for the bonds.(4) All money in the Workers Compensation Bond Fund and all special bond assessments levied pursuant to Section 1063.74 with respect to the workers compensation category shall be used by CIGA for the exclusive purpose of carrying out the purposes of this part. Notwithstanding any other law, the Workers Compensation Bond Fund is not a state fund and shall not be subject to the rules or procedures of any fund in the State Treasury, and application of the fund shall not be subject to the supervision or budgetary approval of any officer or division of state government.(5) CIGA and the trustee for the bonds may, as necessary or convenient to the accomplishment of any other purpose under this article, divide the Workers Compensation Bond Fund into separate accounts.(b) The Homeowners and Automobile Bond Fund is hereby created.(1) Proceeds from the sale of bonds with respect to the homeowners and automobile category described in subparagraph (B) of paragraph (2) of subdivision (a) of Section 1063.5 shall be deposited in a separate account in the Homeowners and Automobile Bond Fund. Only CIGA, and, with respect to payment of the bonds, the trustee for the bonds, shall have the ability to authorize disbursements from the separate account within the Homeowners and Automobile Bond Fund.(2) Special bond assessments levied pursuant to Section 1063.74 with respect to the homeowners and automobile category shall be deposited in a separate account in the Homeowners and Automobile Bond Fund and shall not be commingled with any other moneys. Only the trustee for the bonds shall have the ability to authorize disbursements from this separate account within the Homeowners and Automobile Bond Fund, and CIGA shall have no right or authority to authorize disbursements from this separate account.(3) The Homeowners and Automobile Bond Fund shall be maintained with the trustee for the bonds. Following payment or provision for payment of the bonds, amounts in the Homeowners and Automobile Bond Fund shall be transferred to the fund that is designated in the indenture for the bonds.(4) All money in the Homeowners and Automobile Bond Fund and all special bond assessments levied pursuant to Section 1063.74 with respect to the homeowners and automobile category shall be used by CIGA for the exclusive purpose of carrying out the purposes of this part. Notwithstanding any other law, the Homeowners and Automobile Bond Fund is not a state fund and shall not be subject to the rules or procedures of any fund in the State Treasury, and application of the fund shall not be subject to the supervision or budgetary approval of any officer or division of state government.(5) CIGA and the trustee for the bonds may, as necessary or convenient to the accomplishment of any other purpose under this article, divide the Homeowners and Automobile Bond Fund into separate accounts.(c) The Other Bond Fund is hereby created.(1) Proceeds from the sale of bonds with respect to the other category described in subparagraph (C) of paragraph (2) of subdivision (a) of Section 1063.5 shall be deposited in a separate account in the Other Bond Fund. Only CIGA, and, with respect to payment of the bonds, the trustee for the bonds, shall have the ability to authorize disbursements from the separate account within the Other Bond Fund.(2) Special bond assessments levied pursuant to Section 1063.74 with respect to the other category shall be deposited in a separate account in the Other Bond Fund and shall not be commingled with any other moneys. Only the trustee for the bonds shall have the ability to authorize disbursements from this separate account within the Other Bond Fund, and CIGA shall have no right or authority to authorize disbursements from this separate account.(3) The Other Bond Fund shall be maintained with the trustee for the bonds. Following payment or provision for payment of the bonds, amounts in the Other Bond Fund shall be transferred to the fund that is designated in the indenture for the bonds.(4) All money in the Other Bond Fund and all special bond assessments levied pursuant to Section 1063.74 with respect to the other category shall be used by CIGA for the exclusive purpose of carrying out the purposes of this part. Notwithstanding any other law, the Other Bond Fund is not a state fund and shall not be subject to the rules or procedures of any fund in the State Treasury, and application of the fund shall not be subject to the supervision or budgetary approval of any officer or division of state government.(5) CIGA and the trustee for the bonds may, as necessary or convenient to the accomplishment of any other purpose under this article, divide the Other Bond Fund into separate accounts.
SEC. 10. Section 1063.72 is added to the Insurance Code, to read:
### SEC. 10.
1063.72. (a) The Workers Compensation Bond Fund is hereby created. (1) Proceeds from the sale of bonds with respect to the workers compensation category described in subparagraph (A) of paragraph (2) of subdivision (a) of Section 1063.5 shall be deposited in a separate account in the Workers Compensation Bond Fund. Only CIGA, and, with respect to payment of the bonds, the trustee for the bonds, shall have the ability to authorize disbursements from the separate account within the Workers Compensation Bond Fund.(2) Special bond assessments levied pursuant to Section 1063.74 with respect to the workers compensation category shall be deposited in a separate account in the Workers Compensation Bond Fund and shall not be commingled with any other moneys. Only the trustee for the bonds shall have the ability to authorize disbursements from this separate account within the Workers Compensation Bond Fund, and CIGA shall have no right or authority to authorize disbursements from this separate account.(3) The Workers Compensation Bond Fund shall be maintained with the trustee for the bonds. Following payment or provision for payment of the bonds, amounts in the Workers Compensation Bond Fund shall be transferred to the fund that is designated in the indenture for the bonds.(4) All money in the Workers Compensation Bond Fund and all special bond assessments levied pursuant to Section 1063.74 with respect to the workers compensation category shall be used by CIGA for the exclusive purpose of carrying out the purposes of this part. Notwithstanding any other law, the Workers Compensation Bond Fund is not a state fund and shall not be subject to the rules or procedures of any fund in the State Treasury, and application of the fund shall not be subject to the supervision or budgetary approval of any officer or division of state government.(5) CIGA and the trustee for the bonds may, as necessary or convenient to the accomplishment of any other purpose under this article, divide the Workers Compensation Bond Fund into separate accounts.(b) The Homeowners and Automobile Bond Fund is hereby created.(1) Proceeds from the sale of bonds with respect to the homeowners and automobile category described in subparagraph (B) of paragraph (2) of subdivision (a) of Section 1063.5 shall be deposited in a separate account in the Homeowners and Automobile Bond Fund. Only CIGA, and, with respect to payment of the bonds, the trustee for the bonds, shall have the ability to authorize disbursements from the separate account within the Homeowners and Automobile Bond Fund.(2) Special bond assessments levied pursuant to Section 1063.74 with respect to the homeowners and automobile category shall be deposited in a separate account in the Homeowners and Automobile Bond Fund and shall not be commingled with any other moneys. Only the trustee for the bonds shall have the ability to authorize disbursements from this separate account within the Homeowners and Automobile Bond Fund, and CIGA shall have no right or authority to authorize disbursements from this separate account.(3) The Homeowners and Automobile Bond Fund shall be maintained with the trustee for the bonds. Following payment or provision for payment of the bonds, amounts in the Homeowners and Automobile Bond Fund shall be transferred to the fund that is designated in the indenture for the bonds.(4) All money in the Homeowners and Automobile Bond Fund and all special bond assessments levied pursuant to Section 1063.74 with respect to the homeowners and automobile category shall be used by CIGA for the exclusive purpose of carrying out the purposes of this part. Notwithstanding any other law, the Homeowners and Automobile Bond Fund is not a state fund and shall not be subject to the rules or procedures of any fund in the State Treasury, and application of the fund shall not be subject to the supervision or budgetary approval of any officer or division of state government.(5) CIGA and the trustee for the bonds may, as necessary or convenient to the accomplishment of any other purpose under this article, divide the Homeowners and Automobile Bond Fund into separate accounts.(c) The Other Bond Fund is hereby created.(1) Proceeds from the sale of bonds with respect to the other category described in subparagraph (C) of paragraph (2) of subdivision (a) of Section 1063.5 shall be deposited in a separate account in the Other Bond Fund. Only CIGA, and, with respect to payment of the bonds, the trustee for the bonds, shall have the ability to authorize disbursements from the separate account within the Other Bond Fund.(2) Special bond assessments levied pursuant to Section 1063.74 with respect to the other category shall be deposited in a separate account in the Other Bond Fund and shall not be commingled with any other moneys. Only the trustee for the bonds shall have the ability to authorize disbursements from this separate account within the Other Bond Fund, and CIGA shall have no right or authority to authorize disbursements from this separate account.(3) The Other Bond Fund shall be maintained with the trustee for the bonds. Following payment or provision for payment of the bonds, amounts in the Other Bond Fund shall be transferred to the fund that is designated in the indenture for the bonds.(4) All money in the Other Bond Fund and all special bond assessments levied pursuant to Section 1063.74 with respect to the other category shall be used by CIGA for the exclusive purpose of carrying out the purposes of this part. Notwithstanding any other law, the Other Bond Fund is not a state fund and shall not be subject to the rules or procedures of any fund in the State Treasury, and application of the fund shall not be subject to the supervision or budgetary approval of any officer or division of state government.(5) CIGA and the trustee for the bonds may, as necessary or convenient to the accomplishment of any other purpose under this article, divide the Other Bond Fund into separate accounts.
1063.72. (a) The Workers Compensation Bond Fund is hereby created. (1) Proceeds from the sale of bonds with respect to the workers compensation category described in subparagraph (A) of paragraph (2) of subdivision (a) of Section 1063.5 shall be deposited in a separate account in the Workers Compensation Bond Fund. Only CIGA, and, with respect to payment of the bonds, the trustee for the bonds, shall have the ability to authorize disbursements from the separate account within the Workers Compensation Bond Fund.(2) Special bond assessments levied pursuant to Section 1063.74 with respect to the workers compensation category shall be deposited in a separate account in the Workers Compensation Bond Fund and shall not be commingled with any other moneys. Only the trustee for the bonds shall have the ability to authorize disbursements from this separate account within the Workers Compensation Bond Fund, and CIGA shall have no right or authority to authorize disbursements from this separate account.(3) The Workers Compensation Bond Fund shall be maintained with the trustee for the bonds. Following payment or provision for payment of the bonds, amounts in the Workers Compensation Bond Fund shall be transferred to the fund that is designated in the indenture for the bonds.(4) All money in the Workers Compensation Bond Fund and all special bond assessments levied pursuant to Section 1063.74 with respect to the workers compensation category shall be used by CIGA for the exclusive purpose of carrying out the purposes of this part. Notwithstanding any other law, the Workers Compensation Bond Fund is not a state fund and shall not be subject to the rules or procedures of any fund in the State Treasury, and application of the fund shall not be subject to the supervision or budgetary approval of any officer or division of state government.(5) CIGA and the trustee for the bonds may, as necessary or convenient to the accomplishment of any other purpose under this article, divide the Workers Compensation Bond Fund into separate accounts.(b) The Homeowners and Automobile Bond Fund is hereby created.(1) Proceeds from the sale of bonds with respect to the homeowners and automobile category described in subparagraph (B) of paragraph (2) of subdivision (a) of Section 1063.5 shall be deposited in a separate account in the Homeowners and Automobile Bond Fund. Only CIGA, and, with respect to payment of the bonds, the trustee for the bonds, shall have the ability to authorize disbursements from the separate account within the Homeowners and Automobile Bond Fund.(2) Special bond assessments levied pursuant to Section 1063.74 with respect to the homeowners and automobile category shall be deposited in a separate account in the Homeowners and Automobile Bond Fund and shall not be commingled with any other moneys. Only the trustee for the bonds shall have the ability to authorize disbursements from this separate account within the Homeowners and Automobile Bond Fund, and CIGA shall have no right or authority to authorize disbursements from this separate account.(3) The Homeowners and Automobile Bond Fund shall be maintained with the trustee for the bonds. Following payment or provision for payment of the bonds, amounts in the Homeowners and Automobile Bond Fund shall be transferred to the fund that is designated in the indenture for the bonds.(4) All money in the Homeowners and Automobile Bond Fund and all special bond assessments levied pursuant to Section 1063.74 with respect to the homeowners and automobile category shall be used by CIGA for the exclusive purpose of carrying out the purposes of this part. Notwithstanding any other law, the Homeowners and Automobile Bond Fund is not a state fund and shall not be subject to the rules or procedures of any fund in the State Treasury, and application of the fund shall not be subject to the supervision or budgetary approval of any officer or division of state government.(5) CIGA and the trustee for the bonds may, as necessary or convenient to the accomplishment of any other purpose under this article, divide the Homeowners and Automobile Bond Fund into separate accounts.(c) The Other Bond Fund is hereby created.(1) Proceeds from the sale of bonds with respect to the other category described in subparagraph (C) of paragraph (2) of subdivision (a) of Section 1063.5 shall be deposited in a separate account in the Other Bond Fund. Only CIGA, and, with respect to payment of the bonds, the trustee for the bonds, shall have the ability to authorize disbursements from the separate account within the Other Bond Fund.(2) Special bond assessments levied pursuant to Section 1063.74 with respect to the other category shall be deposited in a separate account in the Other Bond Fund and shall not be commingled with any other moneys. Only the trustee for the bonds shall have the ability to authorize disbursements from this separate account within the Other Bond Fund, and CIGA shall have no right or authority to authorize disbursements from this separate account.(3) The Other Bond Fund shall be maintained with the trustee for the bonds. Following payment or provision for payment of the bonds, amounts in the Other Bond Fund shall be transferred to the fund that is designated in the indenture for the bonds.(4) All money in the Other Bond Fund and all special bond assessments levied pursuant to Section 1063.74 with respect to the other category shall be used by CIGA for the exclusive purpose of carrying out the purposes of this part. Notwithstanding any other law, the Other Bond Fund is not a state fund and shall not be subject to the rules or procedures of any fund in the State Treasury, and application of the fund shall not be subject to the supervision or budgetary approval of any officer or division of state government.(5) CIGA and the trustee for the bonds may, as necessary or convenient to the accomplishment of any other purpose under this article, divide the Other Bond Fund into separate accounts.
1063.72. (a) The Workers Compensation Bond Fund is hereby created. (1) Proceeds from the sale of bonds with respect to the workers compensation category described in subparagraph (A) of paragraph (2) of subdivision (a) of Section 1063.5 shall be deposited in a separate account in the Workers Compensation Bond Fund. Only CIGA, and, with respect to payment of the bonds, the trustee for the bonds, shall have the ability to authorize disbursements from the separate account within the Workers Compensation Bond Fund.(2) Special bond assessments levied pursuant to Section 1063.74 with respect to the workers compensation category shall be deposited in a separate account in the Workers Compensation Bond Fund and shall not be commingled with any other moneys. Only the trustee for the bonds shall have the ability to authorize disbursements from this separate account within the Workers Compensation Bond Fund, and CIGA shall have no right or authority to authorize disbursements from this separate account.(3) The Workers Compensation Bond Fund shall be maintained with the trustee for the bonds. Following payment or provision for payment of the bonds, amounts in the Workers Compensation Bond Fund shall be transferred to the fund that is designated in the indenture for the bonds.(4) All money in the Workers Compensation Bond Fund and all special bond assessments levied pursuant to Section 1063.74 with respect to the workers compensation category shall be used by CIGA for the exclusive purpose of carrying out the purposes of this part. Notwithstanding any other law, the Workers Compensation Bond Fund is not a state fund and shall not be subject to the rules or procedures of any fund in the State Treasury, and application of the fund shall not be subject to the supervision or budgetary approval of any officer or division of state government.(5) CIGA and the trustee for the bonds may, as necessary or convenient to the accomplishment of any other purpose under this article, divide the Workers Compensation Bond Fund into separate accounts.(b) The Homeowners and Automobile Bond Fund is hereby created.(1) Proceeds from the sale of bonds with respect to the homeowners and automobile category described in subparagraph (B) of paragraph (2) of subdivision (a) of Section 1063.5 shall be deposited in a separate account in the Homeowners and Automobile Bond Fund. Only CIGA, and, with respect to payment of the bonds, the trustee for the bonds, shall have the ability to authorize disbursements from the separate account within the Homeowners and Automobile Bond Fund.(2) Special bond assessments levied pursuant to Section 1063.74 with respect to the homeowners and automobile category shall be deposited in a separate account in the Homeowners and Automobile Bond Fund and shall not be commingled with any other moneys. Only the trustee for the bonds shall have the ability to authorize disbursements from this separate account within the Homeowners and Automobile Bond Fund, and CIGA shall have no right or authority to authorize disbursements from this separate account.(3) The Homeowners and Automobile Bond Fund shall be maintained with the trustee for the bonds. Following payment or provision for payment of the bonds, amounts in the Homeowners and Automobile Bond Fund shall be transferred to the fund that is designated in the indenture for the bonds.(4) All money in the Homeowners and Automobile Bond Fund and all special bond assessments levied pursuant to Section 1063.74 with respect to the homeowners and automobile category shall be used by CIGA for the exclusive purpose of carrying out the purposes of this part. Notwithstanding any other law, the Homeowners and Automobile Bond Fund is not a state fund and shall not be subject to the rules or procedures of any fund in the State Treasury, and application of the fund shall not be subject to the supervision or budgetary approval of any officer or division of state government.(5) CIGA and the trustee for the bonds may, as necessary or convenient to the accomplishment of any other purpose under this article, divide the Homeowners and Automobile Bond Fund into separate accounts.(c) The Other Bond Fund is hereby created.(1) Proceeds from the sale of bonds with respect to the other category described in subparagraph (C) of paragraph (2) of subdivision (a) of Section 1063.5 shall be deposited in a separate account in the Other Bond Fund. Only CIGA, and, with respect to payment of the bonds, the trustee for the bonds, shall have the ability to authorize disbursements from the separate account within the Other Bond Fund.(2) Special bond assessments levied pursuant to Section 1063.74 with respect to the other category shall be deposited in a separate account in the Other Bond Fund and shall not be commingled with any other moneys. Only the trustee for the bonds shall have the ability to authorize disbursements from this separate account within the Other Bond Fund, and CIGA shall have no right or authority to authorize disbursements from this separate account.(3) The Other Bond Fund shall be maintained with the trustee for the bonds. Following payment or provision for payment of the bonds, amounts in the Other Bond Fund shall be transferred to the fund that is designated in the indenture for the bonds.(4) All money in the Other Bond Fund and all special bond assessments levied pursuant to Section 1063.74 with respect to the other category shall be used by CIGA for the exclusive purpose of carrying out the purposes of this part. Notwithstanding any other law, the Other Bond Fund is not a state fund and shall not be subject to the rules or procedures of any fund in the State Treasury, and application of the fund shall not be subject to the supervision or budgetary approval of any officer or division of state government.(5) CIGA and the trustee for the bonds may, as necessary or convenient to the accomplishment of any other purpose under this article, divide the Other Bond Fund into separate accounts.
1063.72. (a) The Workers Compensation Bond Fund is hereby created.
(1) Proceeds from the sale of bonds with respect to the workers compensation category described in subparagraph (A) of paragraph (2) of subdivision (a) of Section 1063.5 shall be deposited in a separate account in the Workers Compensation Bond Fund. Only CIGA, and, with respect to payment of the bonds, the trustee for the bonds, shall have the ability to authorize disbursements from the separate account within the Workers Compensation Bond Fund.
(2) Special bond assessments levied pursuant to Section 1063.74 with respect to the workers compensation category shall be deposited in a separate account in the Workers Compensation Bond Fund and shall not be commingled with any other moneys. Only the trustee for the bonds shall have the ability to authorize disbursements from this separate account within the Workers Compensation Bond Fund, and CIGA shall have no right or authority to authorize disbursements from this separate account.
(3) The Workers Compensation Bond Fund shall be maintained with the trustee for the bonds. Following payment or provision for payment of the bonds, amounts in the Workers Compensation Bond Fund shall be transferred to the fund that is designated in the indenture for the bonds.
(4) All money in the Workers Compensation Bond Fund and all special bond assessments levied pursuant to Section 1063.74 with respect to the workers compensation category shall be used by CIGA for the exclusive purpose of carrying out the purposes of this part. Notwithstanding any other law, the Workers Compensation Bond Fund is not a state fund and shall not be subject to the rules or procedures of any fund in the State Treasury, and application of the fund shall not be subject to the supervision or budgetary approval of any officer or division of state government.
(5) CIGA and the trustee for the bonds may, as necessary or convenient to the accomplishment of any other purpose under this article, divide the Workers Compensation Bond Fund into separate accounts.
(b) The Homeowners and Automobile Bond Fund is hereby created.
(1) Proceeds from the sale of bonds with respect to the homeowners and automobile category described in subparagraph (B) of paragraph (2) of subdivision (a) of Section 1063.5 shall be deposited in a separate account in the Homeowners and Automobile Bond Fund. Only CIGA, and, with respect to payment of the bonds, the trustee for the bonds, shall have the ability to authorize disbursements from the separate account within the Homeowners and Automobile Bond Fund.
(2) Special bond assessments levied pursuant to Section 1063.74 with respect to the homeowners and automobile category shall be deposited in a separate account in the Homeowners and Automobile Bond Fund and shall not be commingled with any other moneys. Only the trustee for the bonds shall have the ability to authorize disbursements from this separate account within the Homeowners and Automobile Bond Fund, and CIGA shall have no right or authority to authorize disbursements from this separate account.
(3) The Homeowners and Automobile Bond Fund shall be maintained with the trustee for the bonds. Following payment or provision for payment of the bonds, amounts in the Homeowners and Automobile Bond Fund shall be transferred to the fund that is designated in the indenture for the bonds.
(4) All money in the Homeowners and Automobile Bond Fund and all special bond assessments levied pursuant to Section 1063.74 with respect to the homeowners and automobile category shall be used by CIGA for the exclusive purpose of carrying out the purposes of this part. Notwithstanding any other law, the Homeowners and Automobile Bond Fund is not a state fund and shall not be subject to the rules or procedures of any fund in the State Treasury, and application of the fund shall not be subject to the supervision or budgetary approval of any officer or division of state government.
(5) CIGA and the trustee for the bonds may, as necessary or convenient to the accomplishment of any other purpose under this article, divide the Homeowners and Automobile Bond Fund into separate accounts.
(c) The Other Bond Fund is hereby created.
(1) Proceeds from the sale of bonds with respect to the other category described in subparagraph (C) of paragraph (2) of subdivision (a) of Section 1063.5 shall be deposited in a separate account in the Other Bond Fund. Only CIGA, and, with respect to payment of the bonds, the trustee for the bonds, shall have the ability to authorize disbursements from the separate account within the Other Bond Fund.
(2) Special bond assessments levied pursuant to Section 1063.74 with respect to the other category shall be deposited in a separate account in the Other Bond Fund and shall not be commingled with any other moneys. Only the trustee for the bonds shall have the ability to authorize disbursements from this separate account within the Other Bond Fund, and CIGA shall have no right or authority to authorize disbursements from this separate account.
(3) The Other Bond Fund shall be maintained with the trustee for the bonds. Following payment or provision for payment of the bonds, amounts in the Other Bond Fund shall be transferred to the fund that is designated in the indenture for the bonds.
(4) All money in the Other Bond Fund and all special bond assessments levied pursuant to Section 1063.74 with respect to the other category shall be used by CIGA for the exclusive purpose of carrying out the purposes of this part. Notwithstanding any other law, the Other Bond Fund is not a state fund and shall not be subject to the rules or procedures of any fund in the State Treasury, and application of the fund shall not be subject to the supervision or budgetary approval of any officer or division of state government.
(5) CIGA and the trustee for the bonds may, as necessary or convenient to the accomplishment of any other purpose under this article, divide the Other Bond Fund into separate accounts.
SEC. 11. Section 1063.73 of the Insurance Code is amended to read:1063.73. In the event CIGA determines that the insolvency of one or more member insurers providing workers compensation insurance insurance in at least one of the categories described in paragraph (2) of subdivision (a) of Section 1063.5 will result in covered claim obligations for workers compensation claims in excess of CIGAs capacity to pay from current funds, the board, in its sole discretion, may by resolution request the Bank to issue bonds pursuant to Article 8 (commencing with Section 63049.6) of Chapter 2 of Division 1 of Title 6.7 of the Government Code to provide funds for the payment of the covered claims and the adjusting and defense expenses relating to those claims. Notwithstanding any other provision of law, CIGA is hereby authorized to borrow proceeds of the bonds to provide for those purposes. CIGA may request the Bank to issue bonds pursuant to Article 8 (commencing with Section 63049.6) of Chapter 2 of Division 1 of Title 6.7 of the Government Code. CIGA shall provide the commissioner with a copy of the request and the commissioner may, within 30 days of receipt of the request, modify, cancel, or require a delay in the requested issuance. The proceeds of bonds issued for workers compensation any category of insurance benefits may be used by CIGA to reimburse funds advanced or temporarily loaned from other categories to fund workers compensation claims. categories.
SEC. 11. Section 1063.73 of the Insurance Code is amended to read:
### SEC. 11.
1063.73. In the event CIGA determines that the insolvency of one or more member insurers providing workers compensation insurance insurance in at least one of the categories described in paragraph (2) of subdivision (a) of Section 1063.5 will result in covered claim obligations for workers compensation claims in excess of CIGAs capacity to pay from current funds, the board, in its sole discretion, may by resolution request the Bank to issue bonds pursuant to Article 8 (commencing with Section 63049.6) of Chapter 2 of Division 1 of Title 6.7 of the Government Code to provide funds for the payment of the covered claims and the adjusting and defense expenses relating to those claims. Notwithstanding any other provision of law, CIGA is hereby authorized to borrow proceeds of the bonds to provide for those purposes. CIGA may request the Bank to issue bonds pursuant to Article 8 (commencing with Section 63049.6) of Chapter 2 of Division 1 of Title 6.7 of the Government Code. CIGA shall provide the commissioner with a copy of the request and the commissioner may, within 30 days of receipt of the request, modify, cancel, or require a delay in the requested issuance. The proceeds of bonds issued for workers compensation any category of insurance benefits may be used by CIGA to reimburse funds advanced or temporarily loaned from other categories to fund workers compensation claims. categories.
1063.73. In the event CIGA determines that the insolvency of one or more member insurers providing workers compensation insurance insurance in at least one of the categories described in paragraph (2) of subdivision (a) of Section 1063.5 will result in covered claim obligations for workers compensation claims in excess of CIGAs capacity to pay from current funds, the board, in its sole discretion, may by resolution request the Bank to issue bonds pursuant to Article 8 (commencing with Section 63049.6) of Chapter 2 of Division 1 of Title 6.7 of the Government Code to provide funds for the payment of the covered claims and the adjusting and defense expenses relating to those claims. Notwithstanding any other provision of law, CIGA is hereby authorized to borrow proceeds of the bonds to provide for those purposes. CIGA may request the Bank to issue bonds pursuant to Article 8 (commencing with Section 63049.6) of Chapter 2 of Division 1 of Title 6.7 of the Government Code. CIGA shall provide the commissioner with a copy of the request and the commissioner may, within 30 days of receipt of the request, modify, cancel, or require a delay in the requested issuance. The proceeds of bonds issued for workers compensation any category of insurance benefits may be used by CIGA to reimburse funds advanced or temporarily loaned from other categories to fund workers compensation claims. categories.
1063.73. In the event CIGA determines that the insolvency of one or more member insurers providing workers compensation insurance insurance in at least one of the categories described in paragraph (2) of subdivision (a) of Section 1063.5 will result in covered claim obligations for workers compensation claims in excess of CIGAs capacity to pay from current funds, the board, in its sole discretion, may by resolution request the Bank to issue bonds pursuant to Article 8 (commencing with Section 63049.6) of Chapter 2 of Division 1 of Title 6.7 of the Government Code to provide funds for the payment of the covered claims and the adjusting and defense expenses relating to those claims. Notwithstanding any other provision of law, CIGA is hereby authorized to borrow proceeds of the bonds to provide for those purposes. CIGA may request the Bank to issue bonds pursuant to Article 8 (commencing with Section 63049.6) of Chapter 2 of Division 1 of Title 6.7 of the Government Code. CIGA shall provide the commissioner with a copy of the request and the commissioner may, within 30 days of receipt of the request, modify, cancel, or require a delay in the requested issuance. The proceeds of bonds issued for workers compensation any category of insurance benefits may be used by CIGA to reimburse funds advanced or temporarily loaned from other categories to fund workers compensation claims. categories.
1063.73. In the event CIGA determines that the insolvency of one or more member insurers providing workers compensation insurance insurance in at least one of the categories described in paragraph (2) of subdivision (a) of Section 1063.5 will result in covered claim obligations for workers compensation claims in excess of CIGAs capacity to pay from current funds, the board, in its sole discretion, may by resolution request the Bank to issue bonds pursuant to Article 8 (commencing with Section 63049.6) of Chapter 2 of Division 1 of Title 6.7 of the Government Code to provide funds for the payment of the covered claims and the adjusting and defense expenses relating to those claims. Notwithstanding any other provision of law, CIGA is hereby authorized to borrow proceeds of the bonds to provide for those purposes. CIGA may request the Bank to issue bonds pursuant to Article 8 (commencing with Section 63049.6) of Chapter 2 of Division 1 of Title 6.7 of the Government Code. CIGA shall provide the commissioner with a copy of the request and the commissioner may, within 30 days of receipt of the request, modify, cancel, or require a delay in the requested issuance. The proceeds of bonds issued for workers compensation any category of insurance benefits may be used by CIGA to reimburse funds advanced or temporarily loaned from other categories to fund workers compensation claims. categories.
SEC. 12. 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, insurance in the category described in paragraph (2) of subdivision (a) of Section 1063.5 for which the bonds are issued, and shall be applied 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 initial 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.(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 of and interest on any bonds issued at the boards request and shall utilize, to the extent feasible, the recoveries from the liquidators of the estates of insolvent workers compensation carriers insurers in the respective category of insurance to pay bonds issued at the boards request to fund workers compensation claims. the corresponding insurance claims in that category of insurance.
SEC. 12. Section 1063.74 of the Insurance Code is amended to read:
### SEC. 12.
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, insurance in the category described in paragraph (2) of subdivision (a) of Section 1063.5 for which the bonds are issued, and shall be applied 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 initial 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.(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 of and interest on any bonds issued at the boards request and shall utilize, to the extent feasible, the recoveries from the liquidators of the estates of insolvent workers compensation carriers insurers in the respective category of insurance to pay bonds issued at the boards request to fund workers compensation claims. the corresponding insurance claims in that category of insurance.
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, insurance in the category described in paragraph (2) of subdivision (a) of Section 1063.5 for which the bonds are issued, and shall be applied 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 initial 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.(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 of and interest on any bonds issued at the boards request and shall utilize, to the extent feasible, the recoveries from the liquidators of the estates of insolvent workers compensation carriers insurers in the respective category of insurance to pay bonds issued at the boards request to fund workers compensation claims. the corresponding insurance claims in that category of insurance.
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, insurance in the category described in paragraph (2) of subdivision (a) of Section 1063.5 for which the bonds are issued, and shall be applied 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 initial 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.(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 of and interest on any bonds issued at the boards request and shall utilize, to the extent feasible, the recoveries from the liquidators of the estates of insolvent workers compensation carriers insurers in the respective category of insurance to pay bonds issued at the boards request to fund workers compensation claims. the corresponding insurance claims in that category of insurance.
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, insurance in the category described in paragraph (2) of subdivision (a) of Section 1063.5 for which the bonds are issued, and shall be applied 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 initial 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.
(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 of and interest on any bonds issued at the boards request and shall utilize, to the extent feasible, the recoveries from the liquidators of the estates of insolvent workers compensation carriers insurers in the respective category of insurance to pay bonds issued at the boards request to fund workers compensation claims. the corresponding insurance claims in that category of insurance.
SEC. 13. Section 1063.75 of the Insurance Code is amended to read:1063.75. Any bonds Bonds issued to provide funds for covered claim obligations for workers compensation claims claims, homeowners and automobile claims, as described in subparagraph (B) of paragraph (2) of subdivision (a) of Section 1063.5, and other claims, as described in subparagraph (C) of paragraph (2) of subdivision (a) of Section 1063.5, shall be issued prior to January 1, 2026, in an aggregate principal amount outstanding for each category not to exceed at any one time not to exceed one billion five hundred million dollars ($1,500,000,000), and any ($1,500,000,000) for that category. Any bonds issued or issued to refund bonds shall not have a final maturity exceeding 20 years from the date of issuance. The bonds shall be issued at the request of CIGA, shall be in the form, shall bear the date or dates, and shall mature at the time or times as the indenture authorized by the request may provide. The bonds may be issued in one or more series, as serial bonds or as term bonds, or as a combination thereof, and, notwithstanding any other provision of law, the amount of principal of, or interest on, bonds maturing at each date of maturity need not be equal. The bonds shall bear interest at the rate or rates, variable or fixed or a combination thereof, be in the denominations, be in the form, either coupon or registered, carry the registration privileges, be executed in the manner, be payable in the medium of payment at the place or places within or without the state, be subject to the terms of redemption, contain the terms and conditions, and be secured by the covenants as the indenture may provide. The indenture may provide for the proceeds of the bonds and funds securing the bonds to be invested in any securities and investments, including investment agreements, as specified therein. CIGA may enter into or authorize any ancillary obligations or derivative agreements as it determines necessary or desirable to manage interest rate risk or security features related to the bonds. The bonds shall be sold at public or private sale by the Treasurer at, above, or below the principal amount thereof, on the terms and conditions and for the consideration in the medium of payment that the Treasurer shall determine prior to the sale.
SEC. 13. Section 1063.75 of the Insurance Code is amended to read:
### SEC. 13.
1063.75. Any bonds Bonds issued to provide funds for covered claim obligations for workers compensation claims claims, homeowners and automobile claims, as described in subparagraph (B) of paragraph (2) of subdivision (a) of Section 1063.5, and other claims, as described in subparagraph (C) of paragraph (2) of subdivision (a) of Section 1063.5, shall be issued prior to January 1, 2026, in an aggregate principal amount outstanding for each category not to exceed at any one time not to exceed one billion five hundred million dollars ($1,500,000,000), and any ($1,500,000,000) for that category. Any bonds issued or issued to refund bonds shall not have a final maturity exceeding 20 years from the date of issuance. The bonds shall be issued at the request of CIGA, shall be in the form, shall bear the date or dates, and shall mature at the time or times as the indenture authorized by the request may provide. The bonds may be issued in one or more series, as serial bonds or as term bonds, or as a combination thereof, and, notwithstanding any other provision of law, the amount of principal of, or interest on, bonds maturing at each date of maturity need not be equal. The bonds shall bear interest at the rate or rates, variable or fixed or a combination thereof, be in the denominations, be in the form, either coupon or registered, carry the registration privileges, be executed in the manner, be payable in the medium of payment at the place or places within or without the state, be subject to the terms of redemption, contain the terms and conditions, and be secured by the covenants as the indenture may provide. The indenture may provide for the proceeds of the bonds and funds securing the bonds to be invested in any securities and investments, including investment agreements, as specified therein. CIGA may enter into or authorize any ancillary obligations or derivative agreements as it determines necessary or desirable to manage interest rate risk or security features related to the bonds. The bonds shall be sold at public or private sale by the Treasurer at, above, or below the principal amount thereof, on the terms and conditions and for the consideration in the medium of payment that the Treasurer shall determine prior to the sale.
1063.75. Any bonds Bonds issued to provide funds for covered claim obligations for workers compensation claims claims, homeowners and automobile claims, as described in subparagraph (B) of paragraph (2) of subdivision (a) of Section 1063.5, and other claims, as described in subparagraph (C) of paragraph (2) of subdivision (a) of Section 1063.5, shall be issued prior to January 1, 2026, in an aggregate principal amount outstanding for each category not to exceed at any one time not to exceed one billion five hundred million dollars ($1,500,000,000), and any ($1,500,000,000) for that category. Any bonds issued or issued to refund bonds shall not have a final maturity exceeding 20 years from the date of issuance. The bonds shall be issued at the request of CIGA, shall be in the form, shall bear the date or dates, and shall mature at the time or times as the indenture authorized by the request may provide. The bonds may be issued in one or more series, as serial bonds or as term bonds, or as a combination thereof, and, notwithstanding any other provision of law, the amount of principal of, or interest on, bonds maturing at each date of maturity need not be equal. The bonds shall bear interest at the rate or rates, variable or fixed or a combination thereof, be in the denominations, be in the form, either coupon or registered, carry the registration privileges, be executed in the manner, be payable in the medium of payment at the place or places within or without the state, be subject to the terms of redemption, contain the terms and conditions, and be secured by the covenants as the indenture may provide. The indenture may provide for the proceeds of the bonds and funds securing the bonds to be invested in any securities and investments, including investment agreements, as specified therein. CIGA may enter into or authorize any ancillary obligations or derivative agreements as it determines necessary or desirable to manage interest rate risk or security features related to the bonds. The bonds shall be sold at public or private sale by the Treasurer at, above, or below the principal amount thereof, on the terms and conditions and for the consideration in the medium of payment that the Treasurer shall determine prior to the sale.
1063.75. Any bonds Bonds issued to provide funds for covered claim obligations for workers compensation claims claims, homeowners and automobile claims, as described in subparagraph (B) of paragraph (2) of subdivision (a) of Section 1063.5, and other claims, as described in subparagraph (C) of paragraph (2) of subdivision (a) of Section 1063.5, shall be issued prior to January 1, 2026, in an aggregate principal amount outstanding for each category not to exceed at any one time not to exceed one billion five hundred million dollars ($1,500,000,000), and any ($1,500,000,000) for that category. Any bonds issued or issued to refund bonds shall not have a final maturity exceeding 20 years from the date of issuance. The bonds shall be issued at the request of CIGA, shall be in the form, shall bear the date or dates, and shall mature at the time or times as the indenture authorized by the request may provide. The bonds may be issued in one or more series, as serial bonds or as term bonds, or as a combination thereof, and, notwithstanding any other provision of law, the amount of principal of, or interest on, bonds maturing at each date of maturity need not be equal. The bonds shall bear interest at the rate or rates, variable or fixed or a combination thereof, be in the denominations, be in the form, either coupon or registered, carry the registration privileges, be executed in the manner, be payable in the medium of payment at the place or places within or without the state, be subject to the terms of redemption, contain the terms and conditions, and be secured by the covenants as the indenture may provide. The indenture may provide for the proceeds of the bonds and funds securing the bonds to be invested in any securities and investments, including investment agreements, as specified therein. CIGA may enter into or authorize any ancillary obligations or derivative agreements as it determines necessary or desirable to manage interest rate risk or security features related to the bonds. The bonds shall be sold at public or private sale by the Treasurer at, above, or below the principal amount thereof, on the terms and conditions and for the consideration in the medium of payment that the Treasurer shall determine prior to the sale.
1063.75. Any bonds Bonds issued to provide funds for covered claim obligations for workers compensation claims claims, homeowners and automobile claims, as described in subparagraph (B) of paragraph (2) of subdivision (a) of Section 1063.5, and other claims, as described in subparagraph (C) of paragraph (2) of subdivision (a) of Section 1063.5, shall be issued prior to January 1, 2026, in an aggregate principal amount outstanding for each category not to exceed at any one time not to exceed one billion five hundred million dollars ($1,500,000,000), and any ($1,500,000,000) for that category. Any bonds issued or issued to refund bonds shall not have a final maturity exceeding 20 years from the date of issuance. The bonds shall be issued at the request of CIGA, shall be in the form, shall bear the date or dates, and shall mature at the time or times as the indenture authorized by the request may provide. The bonds may be issued in one or more series, as serial bonds or as term bonds, or as a combination thereof, and, notwithstanding any other provision of law, the amount of principal of, or interest on, bonds maturing at each date of maturity need not be equal. The bonds shall bear interest at the rate or rates, variable or fixed or a combination thereof, be in the denominations, be in the form, either coupon or registered, carry the registration privileges, be executed in the manner, be payable in the medium of payment at the place or places within or without the state, be subject to the terms of redemption, contain the terms and conditions, and be secured by the covenants as the indenture may provide. The indenture may provide for the proceeds of the bonds and funds securing the bonds to be invested in any securities and investments, including investment agreements, as specified therein. CIGA may enter into or authorize any ancillary obligations or derivative agreements as it determines necessary or desirable to manage interest rate risk or security features related to the bonds. The bonds shall be sold at public or private sale by the Treasurer at, above, or below the principal amount thereof, on the terms and conditions and for the consideration in the medium of payment that the Treasurer shall determine prior to the sale.