BILL NUMBER: AB 228	CHAPTERED
	BILL TEXT

	CHAPTER  670
	FILED WITH SECRETARY OF STATE  OCTOBER 9, 2011
	APPROVED BY GOVERNOR  OCTOBER 9, 2011
	PASSED THE SENATE  AUGUST 31, 2011
	PASSED THE ASSEMBLY  SEPTEMBER 9, 2011
	AMENDED IN SENATE  AUGUST 17, 2011
	AMENDED IN SENATE  JULY 12, 2011
	AMENDED IN SENATE  JUNE 27, 2011
	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, 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 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 Secretary of the Senate and
the Chief Clerk of the Assembly regarding the experience of the fund
in engaging in these transactions and make recommendations, as
provided, and to post the report on the department's Internet Web
site. The bill would prohibit the fund from initiating paid
advertising or soliciting sponsorship of advertising campaigns to
market or promote to prospective insureds the ability to insure
qualified employers under the law of any other state and would make
specified provisions inoperative on December 31, 2016.


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.  (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 pursuant to this subdivision to
contract as a reinsurer with a ceding insurer that has responded to a
request for proposal from the fund and 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 for purposes of this subdivision if the ceding
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.
   (C) The insurer has a minimum surplus of one hundred million
dollars ($100,000,000).
   (c) On or before March 1, 2015, the Department of Insurance shall
provide to the Secretary of the Senate and Chief Clerk of the
Assembly, pursuant to Section 9795 of the Government Code, 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 report shall be posted on the
Department of Insurance Internet Web site upon completion. The costs
incurred by the Department of Insurance in the assessment, writing,
and publication of this report shall be provided by the fund.
   (d) The fund shall not initiate paid advertising or solicit
sponsorship of advertising campaigns to market or promote to
prospective insureds the ability to insure qualified employers under
the law of any other state.
   (e) Subdivisions (b), (c), and (d) shall be operative only until
December 31, 2016.