BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 1407
                                                                  Page  1

          Date of Hearing:   August 4, 2010

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

              SB 1407 (Committee on Banking, Finance and Insurance) - As  
                              Amended:  April 12, 2010 

          Policy Committee:                             InsuranceVote:12-0

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              

           SUMMARY  

          This bill addresses the classes of investments in which the  
          State Compensation Insurance Fund (SCIF) is authorized to  
          invest. Specifically this bill expands SCIF choices for  
          investment to include interest-bearing obligations by  
          nonaffiliated institutions, deposits and debts insured by an  
          agency of the federal government, and bonds issued by counties,  
          municipalities, and school districts. 

           FISCAL EFFECT  

          No direct public fiscal impact. SCIF is funded by workers'  
          compensation premiums, not GF. 

           COMMENTS  

           1)Rationale  . This bill clarifies the scope of SCIF investment  
            authority to obtain clear authority related to specified  
            investment vehicles. 

           2)Background  . California employers must provide workers'  
            compensation benefits to their employees under state labor  
            law. Employers must purchase workers' compensation insurance  
            from either a licensed insurance company, or through SCIF, or  
            employers may choose to self-insure, which means they use a  
            pay-as-you go model, paying benefits to and on behalf of  
            workers as the costs are incurred. SCIF, created by the  
            Legislature in 1914, is the insurer of last resort in  
            California's private insurance market and is one of the  
            largest workers' compensation insurers in the country. 









                                                                  SB 1407
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           Analysis Prepared by  :    Mary Ader / APPR. / (916) 319-2081