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April 22, 2024
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| | Two Percent Legislation, 50 Percent Complete
By Robert Warne - September 12, 2002With the two percent premium surcharge carriers pay to fund the California Insurance Guarantee Association (CIGA) set to expire Sept. 12, Governor Gray Davis broke out the pen and threw some ink on AB 2007.
Even though he had till Sept. 30, the governor took the first step Sept. 11 to preserve the two percent surcharge until December 31, 2007.
CIGA thinks the two percent per year premium limit will allow it to continue to pay claims and keep itself from falling into insolvency.
Tied to AB 2007 is SB 2093, which must be signed before the conditions set forth in AB 2007 can be enacted.
SB 2093 is expected to help the insurance commissioner recover money from insolvent carriers and reinsurers at the time of insolvency. The bill establishes a new deposit schedule and eliminates the use of surety bonds in lieu of deposits. But it would allow certain liquid securities or letters of credit to be used as a deposit by workers' compensation insurers.
The double-header legislation will be complete when the governor signs SB 2093, barring a balk, which isn’t expected now he’s in his wind-up. Sometime between now and Sept. 30, with 10 to 1 odds, he’ll send his signature across the plate on SB 2093. |
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