Amended in Assembly April 6, 2015

California Legislature—2015–16 Regular Session

Assembly BillNo. 822


Introduced by Assembly Member Cooley

February 26, 2015


An act to add Section 1063.18 to the Insurance Code, relating to insurance.

LEGISLATIVE COUNSEL’S DIGEST

AB 822, as amended, Cooley. Insurance: California Insurance Guarantee Association: insolvency.

Existing law creates the California Insurance Guarantee Association (CIGA) and requires all insurers admitted to transact insurance in this state to become members. Existing law requires CIGA to collect premium payments from members and to discharge covered claims, as defined, of an insolvent insurer. CIGA is required to allocate its claim payments and costs based on categories of insurance, including, but not limited to, workers’ compensation claims andbegin delete homeowners’claimsend deletebegin insert homeowners’ claimsend insert.

This bill would provide that the laws described above governing CIGA do not requirebegin delete theend deletebegin insert aend insert finalbegin delete adjudicationend deletebegin insert determinationend insert ofbegin delete claimsend deletebegin insert a claimend insert in an insolvent insurer’s liquidationbegin delete proceedingsend deletebegin insert proceedingend insert before a covered claim may be submitted to CIGA. The bill would provide that these laws also do not require a claim to first bebegin delete adjudicatedend deletebegin insert determinedend insert and approved by the liquidator before CIGA pays and discharges a covered claim. The bill would also provide that if the association provides written denial of a claim, the person asserting the claimbegin insert against the associationend insert has one year to bring an actionbegin delete against the associationend delete challenging the denialbegin insert, including an action for declaratory reliefend insert. This bill would alsobegin delete provide thatend deletebegin insert require,end insert if the written denial is based on a failure to exhaust other insurance available to pay the claim, a claimbegin delete mustend deletebegin insert toend insert be reasserted against the association within 6 months after all other insurance has been exhausted.

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

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

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SECTION 1.  

Section 1063.18 is added to the Insurance Code,
2to read:

3

1063.18.  

(a) Nothing in this article requiresbegin delete theend deletebegin insert aend insert final
4begin delete adjudication of claimsend deletebegin insert determination of a claimend insert in an insolvent
5insurer’s liquidationbegin delete proceedingsend deletebegin insert proceedingend insert before a covered
6claim may be submitted to the California Insurance Guarantee
7Association (CIGA). Nothing in this article requires a claim to
8first bebegin delete adjudicatedend deletebegin insert determinedend insert and approved by the liquidator
9before CIGA pays and discharges a covered claim. If a claim is
10presented to the association and all requirements for processing a
11covered claim are satisfied, the association shallbegin insert proceed toend insert process
12the claim for payment under this article.

13(b) If the association provides a written denial of a claim,begin insert thenend insert
14 the person asserting the claimbegin insert against the associationend insert shall have
15one year to bring an actionbegin delete against the associationend delete challenging the
16denialbegin insert, including an action for declaratory reliefend insert. If the written
17denial is based onbegin delete theend deletebegin insert aend insert failure to exhaust other insurance available
18to pay the claim, a claimbegin delete mustend deletebegin insert shallend insert be reasserted against the
19association within six months after all other insurance has been
20exhausted.



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