BILL NUMBER: SB 1011	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Monning

                        FEBRUARY 13, 2014

   An act to amend Section 5005.1 of the Corporations Code, relating
to corporations.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1011, as introduced, Monning. Nonprofit corporations:
self-insurance.
   The Nonprofit Corporation Law authorizes certain nonprofit
corporations that are organized chiefly to provide health or human
services, other than hospitals, to establish an insurance pool to
self-insure against various risks, including, among others, tort
liability and any loss arising from physical damage to motor vehicles
owned or operated by the nonprofit corporation.
   This bill would extend these provisions to authorize the
establishment of an insurance pool to self-insure against the loss or
damage to property of every kind, including, but not limited to,
losses and expenses related to the loss of property.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 5005.1 of the Corporations Code is amended to
read:
   5005.1.  (a) Except for a liability which may be insured against
pursuant to Division 4 (commencing with Section 3200) of the Labor
Code, an authorized corporation may do any of the following:
   (1) Insure itself against all or any part of any tort liability.
   (2) Insure any employee of the corporation against all or any part
of his or her liability for injury resulting from an act or omission
in the scope of employment.
   (3) Insure any board member, officer, or volunteer of the
corporation against any liability that may arise from any act or
omission in the scope of participation with the corporation.
   (4) Insure itself against any loss arising from physical damage to
motor vehicles owned or operated by the corporation. 
   (5) Insure itself against the loss or damage to property of every
kind, including, but not limited to, losses and expenses related to
the loss of property. 
   (b) The insurance authorized pursuant to this section shall only
be available to an authorized corporation where that corporation has
joined with two or more other authorized corporations in an
arrangement providing for the pooling of self-insured claims or
losses. The pooling arrangement shall not be considered insurance nor
be subject to regulation under the Insurance Code.
   (c) Nothing in this section shall be construed to authorize a
corporation organized pursuant to this division to pay for, or to
insure, contract, or provide for payment for, any part of a claim or
judgment against an employee of the corporation for punitive or
exemplary damages.
   (d) Any insurance pool established pursuant to this section shall
have initial pooled resources of not less than two hundred fifty
thousand dollars ($250,000).
   (e) All participating corporations in any pool established
pursuant to this section must agree to pay premiums or make other
mandatory financial contributions or commitments necessary to ensure
a financially sound risk pool.
   (f) For the purpose of this section, an authorized "corporation"
means any corporation that meets all of the following criteria:
   (1) Is organized chiefly to provide or fund health or human
services, but does not include a hospital.
   (2) Is exempt from  fed   eral income  taxation
 under paragraph (3) of subsection (c) of Section 501
  as an organization described in Section 501 (c)(3)
 of the United States Internal Revenue Code.