CALIFORNIA INSURANCE GUARANTEE ASSOCIATION

2005

HISTORY

ESTABLISHED IN 1969

CALIFORNA INSURANCE CODE, – ARTICLES 14.2 AND 14.25– §1063

CIGA Structure

BOARD OF GOVERNORS

– APPOINTED BY THE INSURANCE COMMISSIONER

– 9 MEMBER COMPANIES– 4 MEMBERS FROM PUBLIC SECTOR

CIGA ORGANIZATION

Board of Governors

– Executive Director Finance Department Human Resources Operations Audit Claims

- Liability Department

- Workers’ Compensation Department

FUNDING Assessments

Distributions form Estates

Investment income

Borrowed funds

CIGA FUNDS

WORKERS’ COMPENSATION

PERSONAL LINES

OTHER

NOT COVERED

Life, Annuity and Disability Title Fidelity and Surety Credit Mortgage & financial Ocean marine

IMPORTANT

CIGA

IS NOT

AN

INSURANCE COMPANY

ISSUES NO POLICIES

COLLECTS NO PREMIUM

NO PROFITS

ASSUMES NO CONTRACTUAL OBLIGATIONS TO THE INSUREDS

HOW IS CIGA TRIGGERED?

SUPERIOR COURT LIQUIDATION ORDER

AND A FINDING OF INSOLVENCY OF THE INSURER

Pre-2000

4,100 Claims WC claims– 5 WC claims staff– 1 TPA

2,360 Liability claims– 6 liability claims staff– 1 TPA

Post 2000

LMI Insurance Co. – 727 liability claims

Superior National Ins. Companies– 31, 140 wc claims

Credit General Ins. – Ohio– 2,800 wc claims– 942 liability claims

HIH & Great States Ins.– 7,492 wc claims

2001

Amwest Surety Ins. Co– 174 Auto & Liability claims

Sable Ins. Co – 578 wc claims– 279 liability claims

Frontier Pacific Ins. – 2,824 auto & liability

2001

Far West Insurance – 284 auto & liability claims

Reliance Insurance Companies – 7,984 wc claims– 7,900 auto & liability claims

PHICO– 506 wc claims– 77 liability claims

2002

National Auto & Casualty – 75 wc claims– 1,610 auto & homeowners

Western Specialty .– 655 auto & liability claims

Paula Insurance Co– 3,593 wc claims

2002

American Horizon– 159 auto & liability

Alistar Insurance– 380 wc claims– 1,039 auto & liability claims

2003

Western Growers– 600 wc claim

Millers Insurance Co.– 138 auto & liability

Legion & Villanova Insurance Companies– 15,000 wc claims– 12,100 auto & liability claims

2003

Home Insurance Co.– 1,000 wc claims– 3,500 liability claims

Fremont Indemnity– 15,000 wc claims– 500 liability claims

Pacific National Insurance Co.– 1,750 wc claims– 365 liability claims

2003

Wasatch Crest– 138 liability claims

2004

Commercial Casualty Ins. of NC– 1,168 liability claims

Protective National Ins. Co.– 10 liability claims

Casualty Reciprocal Exchange– 500 wc claims– 2 liability claims

American Bonding.– 12 liability claims

Growth by Year

Year Takeover 2000 33,466

2001 28,771

2002 8,127

2003 50,091

2004 1,692

2005 ???...................

Staffing Today

In house claims staffing: – 50 WC– 24 Auto & Liability

TPA’s– 12 with 23 locations– Approximately 560 claims staff

adjusters, supervisors & managers

CURRENT OBLIGATIONS

5,445 Liability Claims– 3,969 handled in-house

54,000 Workers’ Compensation Claims– 4,600 handled in-house– 49,400 handled by Third Party Claims

Administrators (TPA)

TPA OVERSIGHT CIGA PHILOSOPHY

7 COMPLIANCE REPRESENTATIVES

• IRVINE• CALABASAS• RANCHO CORDOVA• SAN DIEGO• PASADENA

COVERED CLAIMS

– DUTIES1063.2(a)1063.2(b)

SPECIFIC NON-COVERED CLAIMS

1063.1(c)– CT claims with other insurance– Contribution– DWD– MEDI-CAL/Medicare

SPECIFIC NON-COVERED CLAIMS

CT CLAIMS– Insurance Code §1063.1(c)(9)(i) -- other coverage

available to employee

SPECIFIC NON-COVERED CLAIMS

CONTRIBUTION– Insurance Code §1063.1(c)(5)

SPECIFIC NON-COVERED CLAIMS

General Special Employment

SPECIFIC NON-COVERED CLAIMS

GOVERNMENT CLAIMS– §1063.1(c)(4) – EDD – LC §4706.5 (DWD)