BILL NUMBER: AB 1051 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Fletcher
FEBRUARY 27, 2009
An act to add Article 3.7 (commencing with Section 989) to Chapter
6 of Division 4 of the Military and Veterans Code, relating to
veterans.
LEGISLATIVE COUNSEL'S DIGEST
AB 1051, as introduced, Fletcher. Veterans: Pooled Self-Insurance
Fund.
Under existing law, the Department of Veterans Affairs has
specified powers and duties relating to veterans, including the
administration of insurance reserve funds.
This bill would create the Pooled Self-Insurance Fund to receive
various reserves and moneys, and would allow the department, from the
moneys appropriated from the fund, to purchase insurance related to
its veteran home loan program.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Article 3.7 (commencing with Section 989) is added to
Chapter 6 of Division 4 of the Military and Veterans Code, to read:
Article 3.7. Pooled Self-Insurance
989. It is the intent of the Legislature to establish the Pooled
Self-Insurance Fund in order to ensure that each of the department's
insurance reserve funds are self-sufficient and adequately maintained
for the benefit of the contract purchasers. For reasons of prudent
financial management, the department will pool the reserves for the
purpose of providing reliable, consistent, and affordable home
protection, and to encourage the strengthening of bond ratings,
thereby increasing the efficacy of the Veterans' Farm and Home
Purchase Act of 1974.
989.1. (a) The department shall maintain a Pooled Self-Insurance
Fund, which is hereby created in the State Treasury. The Pooled
Self-Insurance Fund includes the reserves and moneys held by the
department, as authorized by Sections 987.25, 987.71, 987.74, 987.76,
987.88, and 989.4.
(b) The department shall, consistent with the purposes of this
article, prescribe and publish rules and regulations for the
administration of the Pooled Self-Insurance Fund.
(c) The department may purchase insurance against any risk, or
portion of any risk, otherwise payable out of appropriated moneys in
the Pooled Self-Insurance Fund. The department shall make an annual
report on or before September 1 of each year to the Legislature
regarding any insurance coverage implemented or required by it. The
report shall include, but not be limited to, the type of insurance
coverage, its cost, loss-ratio information, the reason for purchasing
the insurance, and any changes in existing insurance coverage and
the reason for those changes.
(d) In each annual report to the Legislature regarding the status
of the Pooled Self-Insurance Fund, all subfunds must show within
three years of borrowing from the other subfunds that rates have
effectively been adjusted to balance income to expenses, and that any
internal borrowing between the various accounts and funds has been
repaid in full. Each subfund must be self-sufficient within a period
of time not to exceed three years of having borrowed from the other
members of the Pooled Self-Insurance Fund.
(e) Beginning six months after the inception of the Pooled
Self-Insurance Fund, there will be a biennial audit of each subfund
to ensure adequate rates are being charged to meet expenses. Premium
rates of each subfund will be monitored and adjusted annually
according to need to ensure self-sufficiency and reconcile internal
borrowing between the members of the Pooled Self-Insurance Fund.
(f) Upon declaration of emergency by the Secretary, the Pooled
Self-Insurance Fund may borrow from the Veterans' Farm and Home
Building Fund of 1943. The borrowed funds are to be fully repaid from
the Pooled Self-Insurance Fund within a period of time not to exceed
three years.
(g) Upon dissolution or termination of any of the subaccounts or
subfunds within the Pooled Self-Insurance Fund, whether established
by statute or otherwise, any excess moneys shall revert to the
Veterans' Farm and Home Building Fund of 1943.