The California Insurance Guarantee Association is authorized to pay and discharge certain claims of insolvent insurers as defined in Section 1063.1 through the collection of premiums from its members, which amounts are limited by law and take time to assess and collect. If a natural disaster such as a major earthquake or fire were to occur in California, California’s housing stock could be adversely affected and there could be an immediate need for large sums of money to pay covered claims of insolvent insurers. This article provides for the ability of the department to issue bonds to more expeditiously and effectively provide for the payment of covered claims that arise as a result of a natural disaster. The bonds are to be paid from the premiums assessed by the department or by CIGA for those purposes. It is a public purpose and in the best interest of the public health, safety, and general welfare of the residents of this state to provide for the issuance of bonds by the department to pay claimants and policyholders having covered claims against insolvent insurers operating in this state.
(Added by Stats. 1996, Ch. 793, Sec. 2. Effective January 1, 1997.)