BILL NUMBER: AB 228	AMENDED
	BILL TEXT

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

INTRODUCED BY   Assembly Member Fuentes

                        FEBRUARY 2, 2011

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


	LEGISLATIVE COUNSEL'S DIGEST


   AB 228, as amended, Fuentes. State Compensation Insurance Fund:
out-of-state risks.
   Existing law creates the State Compensation Insurance Fund
administered by a board of directors for the purpose of transacting
workers' compensation insurance, insurance against the expense of
defending any suit for serious and willful misconduct against an
employer or his or her agent, and insurance for employees and other
persons for the compensation fixed by the workers' compensation laws
for employees and their dependents. Existing law authorizes the fund
to insure a California employer against the employer's liability for
workers' compensation benefits, under the law of any other state, for
California employees temporarily working outside of California on a
specific assignment if the fund insures the employer's other
employees who work within California.
   This bill would expand that authorization so that the fund would
be authorized to insure  an  a qualified 
employer whose principal place of business is in California against
the employer's liability for workers' compensation benefits, under
the law of any other state, if the fund insured the employees who
work within California , as specified  .  The bill would
require the Department of Insurance, on or before March 1, 2015, to
report to the Assembly Committee on Insurance and the Senate
Committee on Insurance regarding the experience of the fund in
engaging in these transactions and make recommendations, as provided.

   Vote: majority. Appropriation: no. Fiscal committee:  no
  yes  . State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
   
  SECTION 1.    Section 11780.5 of the Insurance
Code is amended to read:
   11780.5.  The fund may also insure an employer whose principal
place of business is in California against his or her liability for
workers' compensation benefits, under the law of any other state, if
the fund insures the employees who work within California. 
  SECTION 1.    Section 11780.5 of the  
Insurance Code   is amended to read: 
   11780.5.   (a)    The fund may also insure a
California employer against his  or her  liability for
workers' compensation benefits, under the law of any other state, for
California employees temporarily working outside of California on a
specific assignment if the fund insures the employer's other
employees who work within California. 
   (b) (1) The fund is only authorized under this subdivision to
insure an employer whose principal place of business is in
California, provided the majority of the employer's operations and
employees are located within California, against his or her liability
for workers' compensation benefits, under the law of any other
state, if the fund insures the employer's employees who work within
California.  
   (2) The fund is only authorized to transact insurance pursuant to
this subdivision by contract with an insurer that is admitted to
transact workers' compensation insurance in California and in the
out-of-state jurisdiction where the non-California employees are
located. The fund may only contract with an admitted insurer for
purposes of this subdivision if the insurer meets all of the
following criteria:  
   (A) The insurer has an A minus (A-) rating or better from A.M.
Best Company.  
   (B) The insurer has substantial prior experience in transacting
workers' compensation business on another insurer's behalf in a
fronting arrangement.  
   (C) The insurer has a minimum surplus of one hundred million
dollars ($100,000,000).  
   (c) (1) On or before March 1, 2015, the Department of Insurance
shall provide to the Assembly Committee on Insurance and the Senate
Committee on Insurance a report assessing the experience of the fund
that is authorized pursuant to this subdivision and shall make
recommendations concerning its continuation, limitation, or expansion
with special attention to the extent of advantages this practice
offers California employers, the California workers' compensation
marketplace, and the impact of this class of insurance, whether pro
or con, on the fund, its management, and the California marketplace.
The costs incurred by the Department of Insurance in the assessment,
writing, and publication of this report shall be provided by the
fund.  
   (2) The requirement for submitting a report imposed under this
subdivision is inoperative on March 1, 2019, pursuant to Section
10231.5 of the Government Code.