The association, to the extent it determines necessary or desirable, may request the department to issue bonds pursuant to Article 14.25 (commencing with Section 1063.50) to provide funds to pay covered claims of insolvent insurers. The association may act as agent of the department to collect premium payments levied by the department on its member insurers. If the association borrows the proceeds of the bonds from the department, the association may assess an additional premium, not to exceed 2 percent of the net direct premium written by the member insurer, to be applied exclusively to the repayment of the loan. The revenue received from the additional premium shall be pledged to the repayment of the loan and shall be used exclusively for that purpose until the bonds have been paid or provision for the payment of them has been made.
(Added by Stats. 1996, Ch. 793, Sec. 1. Effective January 1, 1997.)