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AB-1541 Insurance: Guarantee Association.(2021-2022)

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Date Published: 09/27/2021 02:00 PM
AB1541:v97#DOCUMENT

Assembly Bill No. 1541
CHAPTER 305

An act to amend Section 1063.75 of the Insurance Code, relating to insurance.

[ Approved by Governor  September 24, 2021. Filed with Secretary of State  September 24, 2021. ]

LEGISLATIVE COUNSEL'S DIGEST


AB 1541, Committee on Insurance. Insurance: Guarantee Association.
Existing law establishes the California Insurance Guarantee Association (CIGA) to provide coverage against losses arising from the failure of an insolvent property, casualty, or workers’ compensation insurer to discharge its obligations under its insurance policies. Existing law gives CIGA the ability to request the issuance of bonds by the California Infrastructure and Economic Development Bank to more expeditiously and effectively provide for the payment of covered claims arising from the insolvencies of insurance companies providing workers’ compensation insurance. Existing law requires that any bonds that provide funds for covered claim obligations for workers’ compensation claims be issued, as specified, prior to January 1, 2023.
This bill would extend the date for bonds to be issued to provide funds for covered claim obligations for workers’ compensation claims, as specified, to January 1, 2026.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 1063.75 of the Insurance Code is amended to read:

1063.75.
 Any bonds issued to provide funds for covered claim obligations for workers’ compensation claims shall be issued prior to January 1, 2026, in an aggregate principal amount outstanding at any one time not to exceed one billion five hundred million dollars ($1,500,000,000), and 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.