BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 711|
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UNFINISHED BUSINESS
Bill No: SB 711
Author: Senate Insurance Committee
Amended: 6/14/11
Vote: 21
SENATE INSURANCE COMMITTEE : 8-0, 04/27/11
AYES: Calderon, Gaines, Anderson, Corbett, Lieu,
Lowenthal, Price, Wyland
NO VOTE RECORDED: Correa
SENATE FLOOR : 40-0, 05/05/11
AYES: Alquist, Anderson, Berryhill, Blakeslee, Calderon,
Cannella, Corbett, Correa, De Le�n, DeSaulnier, Dutton,
Emmerson, Evans, Fuller, Gaines, Hancock, Harman,
Hernandez, Huff, Kehoe, La Malfa, Leno, Lieu, Liu,
Lowenthal, Negrete McLeod, Padilla, Pavley, Price, Rubio,
Runner, Simitian, Steinberg, Strickland, Vargas, Walters,
Wolk, Wright, Wyland, Yee
ASSEMBLY FLOOR : 74-0, 08/31/11 See last page for vote
SUBJECT : California Life and Health Insurance Guarantee
Association
Act
SOURCE : Author
DIGEST : This bill extends the time for bonds to be
issued on behalf of the California Insurance Guarantee
Association to pay claims of insolvent workers compensation
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SB 711
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insurers from January 1, 2013, to January 1, 2023, codifies
the uncodified "prospective-only application" provision of
last session's SB 1408 (Banking, Finance, and Insurance
Committee), Chapter 334, Statutes of 2010, and deletes an
erroneous cross-reference.
Assembly Amendments extend from January 1, 2013, until
January 1, 2023, the time for bonds to be issued to pay for
workers' compensation claims of insolvent workers'
compensation insurers. The bonds may be issued when the
California Insurance Guarantee Association requests the
bond issuance by the California Infrastructure and Economic
Development Bank.
ANALYSIS : Existing law:
1.Authorizes the California Insurance Guarantee Association
(CIGA) to pay eligible claims of insolvent insurers
through the collection of premiums from its members. Its
members are property, casualty, and workers' compensation
insurers.
2.Authorizes CIGA to request the issuance of bonds by the
California Infrastructure and Economic Development Bank
to more effectively provide for the payment of covered
claims that arise from insolvencies of insurers providing
workers' compensation insurance.
3.Specifies that any bonds issued to provide funds for
covered workers' compensation claims shall be issued
prior to January 1, 2013, in an aggregate principal
amount outstanding not to exceed $1.5 billion. Any bonds
issued shall not mature more than 20 years from the date
of issuance.
4.Authorizes eligible claimants to obtain payment for
claims against insolvent life and health insurance
companies pursuant to the California Life and Health
Insurance Guarantee Association Act. Member insurance
companies of this association are subject to an
assessment to provide funds for these payments.
5.Places in an uncodified section of law the stipulation
that amendments made to the California Life and Health
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SB 711
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Insurance Guarantee Association Act made by Chapter 334
of the Statutes of 2010 (SB 1408) shall not apply to any
member insurer that, prior to the effective date of that
chapter, has been placed under an order of liquidation
with a finding of insolvency.
6.References a nonexistent subdivision in one section of
the Insurance Code governing the conduct of insurance
companies subject to the California Life and Health
Insurance Guarantee Association Act.
This bill:
1.Extends the time for bonds to be issued on behalf of CIGA
to pay claims of insolvent workers compensation insurers
from January 1, 2013, to January 1, 2023.
2.Places in the California Life and Health Insurance
Guarantee Association law an uncodified provision
included in SB 1408 (See Section 16) which was signed
into law last year as Chapter 334 Statutes of 2010. The
uncodified provision made the application of SB 1408
prospective only by stating that the amendments made to
the California Life and Health Insurance Guarantee
Association Act by SB 1408 shall not apply to any member
insurer that, before the effective date of this act, has
been placed under an order of liquidation with a finding
of insolvency.
3.Strikes a single erroneous cross-reference to a provision
no longer in the law.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 8/18/11)
Association of California Life and Health Insurance
Companies
Pacific Life Insurance Company
California Life and Health Guarantee association
ASSEMBLY FLOOR : 74-0, 08/18/11
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SB 711
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AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall,
Bill Berryhill, Block, Blumenfield, Bradford, Brownley,
Buchanan, Butler, Charles Calderon, Campos, Carter,
Chesbro, Conway, Cook, Davis, Dickinson, Donnelly, Eng,
Feuer, Fletcher, Fong, Fuentes, Furutani, Beth Gaines,
Galgiani, Garrick, Gatto, Gordon, Grove, Hagman,
Halderman, Hall, Harkey, Hayashi, Roger Hern�ndez, Huber,
Hueso, Huffman, Jeffries, Jones, Knight, Lara, Logue,
Bonnie Lowenthal, Ma, Mansoor, Mendoza, Miller, Mitchell,
Monning, Morrell, Nestande, Nielsen, Norby, Olsen, Pan,
Perea, V. Manuel P�rez, Portantino, Silva, Skinner,
Smyth, Solorio, Swanson, Wagner, Wieckowski, Williams,
Yamada, John A. P�rez
NO VOTE RECORDED: Bonilla, Cedillo, Gorell, Hill, Torres,
Valadao
JJA:nl 8/18/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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