BILL NUMBER: AB 2327	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Harkey

                        FEBRUARY 19, 2010

   An act to add Division 4 (commencing with Section 13900) to the
Insurance Code, relating to risk pools.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2327, as introduced, Harkey. Affordable housing: risk retention
pool.
   Existing law authorizes local agencies to enter into a joint
pooling agreement to form a single statewide insurance pooling
arrangement for the payment of tort liability or public liability
losses incurred by those agencies.
   This bill would authorize an affordable housing entity, as
defined, to include affordable housing entities that are created
under the laws of another jurisdiction or organized under the laws of
another state to join with one or more affordable housing entities
in an arrangement providing for the pooling of self-insured claims or
losses, as specified. The pool would be authorized to include a
separate legal or administrative entity whose duty it would be to
administer the insurance pool, organized under the laws of this state
or another state or operating in this state or another state. The
bill would prohibit the pooling arrangement from being considered
insurance or being subject to regulation under the Insurance Code.
   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.  Division 4 (commencing with Section 13900) is added to
the Insurance Code, to read:

      DIVISION 4.  Affordable Housing Entities Risk Retention Pool


   13900.  An affordable housing entity may join with one or more
other affordable housing entities in an arrangement providing for the
pooling of self-insured claims or losses with respect to any of the
following:
   (a) Insurance covering all or any part of any tort liability.
   (b) Insurance covering any employee of the affordable housing
entity against all or any part of his or her liability for injury
resulting from an act or omission in the scope of employment.
   (c) Insurance covering any board member, officer, partner,
manager, member, or volunteer of the affordable housing entity
against any liability that may arise from any act or omission in the
scope of participation with the affordable housing entity.
   (d) Insurance covering any loss arising from physical damage to
motor vehicles, personal property, real property, or other property
owned or operated by the affordable housing entity.
   13901.  The pooling arrangement established pursuant to this
division shall not be considered insurance, and shall not be subject
to regulation under this code.
   13902.  (a) Any insurance pool, established pursuant to this
division, may include the organization of a separate legal or
administrative entity whose duty it is to administer the insurance
pool, which may be a nonprofit corporation, limited liability
company, partnership, trust, or other form of entity, whether
organized under the laws of this state or another state or operating
in another state.
   (b) Any insurance pool established pursuant to this division shall
have initial pooled resources of not less than two hundred fifty
thousand dollars ($250,000).
   13903.  All participating affordable housing entities in any
insurance pool, established pursuant to this division, are required
to agree to pay premiums or make other mandatory financial
contributions, as determined by the governing board, provided for by
the insurance pool arrangement, that are necessary to ensure a
financially sound risk pool.
   13904.  Any insurance pool, established pursuant to this division,
shall not insure against any liability that may be insured against
pursuant to Division 4 (commencing with Section 3200) of the Labor
Code.
   13905.  Nothing in this division shall be construed to authorize
an affordable housing entity to pay for, to insure, to contract for
payment of, or to provide for payment for, any part of a claim or
judgment against an employee of the affordable housing entity for
punitive or exemplary damages.
   13906.  For the purpose of this division, "affordable housing"
means housing developments in which some of the dwelling units may be
purchased or rented, with or without government assistance, on a
basis that is affordable to individuals of low income, as defined in
Section 50093 of the Health and Safety Code.
   13907.  For the purpose of this division, an "affordable housing
entity" means any of the following:
   (a) A housing authority created under the laws of this state or
another jurisdiction and any agency or instrumentality of a housing
authority, including, but not limited to, a legal entity created to
conduct a self-insurance program for housing authorities that
complies with Chapter 5 (commencing with Section 6500) of Division 7
of Title 1 of the Government Code.
   (b) A nonprofit corporation organized under the laws of this state
or another state that is engaged in providing affordable housing.
   (c) A partnership, general or limited, or limited liability
company that is engaged in providing affordable housing and that is
affiliated with a housing authority described in subdivision (a) or a
nonprofit corporation described in subdivision (b) if the housing
authority or nonprofit corporation has one or more of the following:
   (1) A financial or ownership interest in the partnership or
limited liability company or the right to acquire that interest.
   (2) The power to direct the management or policies of the
partnership or limited liability company.
   (3) A contract to lease, manage, or operate the affordable housing
owned by the partnership or limited liability company.
   (4) Any other material relationship with the partnership or
limited liability company.