BILL ANALYSIS
AB 2327
Page 1
Date of Hearing: May 12, 2010
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 2327 (Harkey) - As Amended: May 4, 2010
Policy Committee: Insurance
Vote:11-0
Housing & Community Development 7-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill creates a framework by which private affordable
housing entities are able to join a multi-state risk pool for
the purposes of procuring liability coverage. Specifically, this
bill:
1)Defines affordable housing.
2)Establishes financial requirements for the risk pooling.
3)Specifies these risk pooling arrangements are not insurance
and not subject to regulation by the California Department of
Insurance.
4)Requires any pool established pursuant to this bill to furnish
a copy of the pool's annual audited financial statement to the
California Secretary of State within 180 days of the close of
the pool's fiscal year.
FISCAL EFFECT
Unknown, likely absorbable workload to the California Secretary
of State to review pool annual audited financial information.
COMMENTS
1) Rationale . This bill is sponsored by the Housing
Authorities Risk Retention Pool, a self-insurance pool of 90
public housing authorities from California, Oregon,
Washington, and Nevada. This bill broadens definitions and
requirements to authorize non-public housing authorities to
enter into risk pooling arrangements for the provision of
AB 2327
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tort, employee injury, board member, and physical property
liability coverage.
2) Background . The Housing Authority Risk Retention Pool
(HARRP) was established in 1987 as a response to rapidly
escalating insurance costs. The mission of HARRP is to pool
risk associated with housing authorities administered by
public agencies and to provide claims administration, risk
management, financial services, and underwriting in-house.
HARRP insures its members for $2 million for each liability
and property loss. Excess coverage is purchased in the
commercial insurance market. This bill enables private
affordable housing entities to join HARRP to take advantage of
the risk pooling arrangements and services.
Analysis Prepared by : Mary Ader / APPR. / (916) 319-2081