BILL NUMBER: SB 711	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  SEPTEMBER 1, 2011
	AMENDED IN ASSEMBLY  JUNE 14, 2011

INTRODUCED BY    Committee on Insurance   (
  Senators Calderon (Chair), Anderson, Corbett,
Correa, Gaines, Lowenthal, Price, and Wyland   )
  Senator   Rubio 
    (   Coauthor:   Senator   Calderon
  ) 

                        FEBRUARY 18, 2011

    An act to amend Sections 1063.75 and 1067.17 of, and to
add Section 1067.19 to, the Insurance Code, and to repeal Section 16
of Chapter 334 of the Statutes of 2010, relating to insurance.
  An act to add Section 3016 to the Public Resources
Code, relating to public resources. 


	LEGISLATIVE COUNSEL'S DIGEST


   SB 711, as amended,  Committee on Insurance  
Rubio  .  Insurance: Insurance Guarantee Association:
California Life and Health Insurance Guarantee Association Act.
  Public resources: oil and gas: underground injection
of gas   .  
   Existing law establishes the Division of Oil, Gas, and Geothermal
Resources in the Department of Conservation and provides the division
with the authority to regulate oil and gas wells and production
facilities.  
   This bill would authorize the division to permit the underground
injection of a gas, as defined, including the constituents associated
with the gas that are produced in downhole in connection with
exploration, development, or production operations for the purposes
of disposal.  
   Existing law establishes the California Insurance Guarantee
Association to provide coverage against losses arising from the
failure of an insolvent property, casualty, or workers' compensation
insurer to discharge its obligations under its insurance policies.
The association is managed by a board of governors appointed by the
Insurance Commissioner, the President pro Tempore of the Senate, and
the Speaker of the Assembly.  
   Existing law provides that any bonds to provide funds for covered
claim obligations for workers' compensation claims shall be issued,
as specified, prior to January 1, 2013.  
   This bill would extend the date for bonds to be issued to provide
funds for covered claim obligations for workers' compensation claims,
as specified, to January 1, 2023.  
   Existing law, the California Life and Health Insurance Guarantee
Association Act, establishes an association of insurers to pay
benefits and continue coverage pursuant to contractual obligations
under life and health insurance policies and annuity contracts in the
event of the impairment or insolvency of a member insurer that
issued the policies or contracts. Existing uncodified law states that
specified changes made to the act during the 2009-10 Regular Session
of the Legislature do not apply to any member insurer that, before
the effective date of those changes, has been placed under an order
of liquidation with a finding of insolvency.  
   This bill would codify that provision.  
   The bill would make conforming changes. 
   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.    Section 3016 is added to the  
Public Resources Code   , to read:  
   3016.  The division shall have the authority to permit the
underground injection of gas, as defined in Section 3007, including
the constituents associated with the gas that are produced from
downhole in connection with exploration, development, or production
operations for the purposes of disposal.  
  SECTION 1.    Section 1063.75 of the Insurance
Code is amended to read:
   1063.75.  Any bonds issued to provide funds for covered claim
obligations for workers' compensation claims shall be issued prior to
January 1, 2023, in an aggregate principal amount outstanding at any
one time not to exceed $1.5 billion dollars ($1,500,000,000), and
any bonds issued or issued to refund bonds shall not have a final
maturity exceeding 20 years from the date of issuance. The bonds
shall be issued at the request of CIGA, shall be in the form, shall
bear the date or dates, and shall mature at the time or times as the
indenture authorized by the request may provide. The bonds may be
issued in one or more series, as serial bonds or as term bonds, or as
a combination thereof, and, notwithstanding any other provision of
law, the amount of principal of, or interest on, bonds maturing at
each date of maturity need not be equal. The bonds shall bear
interest at the rate or rates, variable or fixed or a combination
thereof, be in the denominations, be in the form, either coupon or
registered, carry the registration privileges, be executed in the
manner, be payable in the medium of payment at the place or places
within or without the state, be subject to the terms of redemption,
contain the terms and conditions, and be secured by the covenants as
the indenture may provide. The indenture may provide for the proceeds
of the bonds and funds securing the bonds to be invested in any
securities and investments, including investment agreements, as
specified therein. CIGA may enter into or authorize any ancillary
obligations or derivative agreements as it determines necessary or
desirable to manage interest rate risk or security features related
to the bonds. The bonds shall be sold at public or private sale by
the Treasurer at, above, or below the principal amount thereof, on
the terms and conditions and for the consideration in the medium of
payment that the Treasurer shall determine prior to the sale.
 
  SEC. 2.    Section 1067.17 of the Insurance Code
is amended to read:
   1067.17.  (a) No person, including an insurer, agent, or affiliate
of an insurer shall make, publish, disseminate, circulate, or place
before the public, or cause directly or indirectly, to be made,
published, disseminated, circulated, or placed before the public, in
any newspaper, magazine, or other publication, or in the form of a
notice, circular, pamphlet, letter, or poster, or over any radio
station or television station, or in any other way, any
advertisement, announcement, or statement, written or oral, which
uses the existence of the California Life and Health Insurance
Guarantee Association for the purpose of sales, solicitation, or
inducement to purchase any form of insurance covered by the
California Life and Health Insurance Guarantee Association Act.
Provided, however, that this section shall not apply to the
California Life and Health Insurance Guarantee Association or any
other entity that does not sell or solicit insurance.
   (b) (1) The association shall prepare a summary document
describing the general purposes and current limitations of the
article and complying with subdivision (c). This document shall be
submitted to the commissioner for approval. Sixty days after
receiving approval, no insurer may deliver a policy or contract
described in paragraph (1) of subdivision (b) of Section 1067.02 to a
policyholder or contractholder unless the document is delivered to
the policy or contractholder prior to or at the time of delivery of
the policy or contract. The document should also be available upon
request by the policyholder. The distribution, delivery, or contents
or interpretation of this document shall not mean that either the
policy or the contract or the holder thereof would be covered in the
event of the impairment or insolvency of a member insurer. The
description document shall be revised by the association as
amendments to the article may require. Failure to receive this
document does not give the policyholder, contractholder, certificate
holder, or insured any greater rights than those stated in this
article. This paragraph shall remain operative only until paragraph
(2) becomes operative.
   (2) Within 180 days of the effective date of the act that amended
this section in the 2009-10 Regular Session, the association shall
prepare a summary document describing the general purposes and
current limitations of the article and complying with subdivision
(c). This document shall be submitted to the commissioner for
approval. At the expiration of the 60th day after the date on which
the commissioner approves the document, an insurer may not deliver a
policy or contract described in paragraph (1) of subdivision (b) of
Section 1067.02 to a policy or contract owner unless the summary
document is delivered to the policy or contract owner at the time of
delivery of the policy or contract. The document shall also be
available upon request by a policy owner. The distribution, delivery,
or contents or interpretation of this document does not guarantee
that either the policy or the contract or the owner of the policy or
contract is covered in the event of the impairment or insolvency of a
member insurer. The description document shall be revised by the
association, as amendments to the article may require. Failure to
receive this document does not give the policy owner, contract owner,
certificate holder, or insured any greater rights than those stated
in this article.
   (c) The document prepared under subdivision (b) shall contain a
clear and conspicuous disclaimer on its face. The commissioner shall
promulgate a rule establishing the form and content of the
disclaimer. The disclaimer shall do all of the following:
   (1) State the name and address of the life and health insurance
guarantee association and insurance department.
   (2) Prominently warn the policy owner or contract owner that the
California Life and Health Insurance Guarantee Association may not
cover the policy or, if coverage is available, it will be subject to
substantial limitations and exclusions and conditioned on continued
residence in the state.
   (3) State that the insurer and its agents are prohibited by law
from using the existence of the California Life and Health Insurance
Guarantee Association for the purpose of sales, solicitation, or
inducement to purchase any form of insurance.
   (4) State that the policy owner or contract owner should not rely
on coverage under the California Life and Health Insurance Guarantee
Association when selecting an insurer.
   (5) Provide other information as directed by the commissioner.
 
  SEC. 3.    Section 1067.19 is added to the
Insurance Code, to read:
   1067.19.  The amendments made to this article by Chapter 334 of
the Statutes of 2010 during the 2009-10 Regular Session of the
Legislature shall not apply to any member insurer that, before the
effective date of those amendments, has been placed under an order of
liquidation with a finding of insolvency.  
  SEC. 4.    Section 16 of Chapter 334 of the
Statutes of 2010 is repealed.