Cal. INS § 10100.3 — California Code / Code ins / Division 2 / Part 1 / Chapter 9 / Section 10100.3
Section 10100.3
Status: in_force

(a) If granted prior approval from the commissioner, the association may do all of the following:

(1) Request the California Infrastructure and Economic Development Bank to issue bonds from time to time to finance all or any portion of the costs of claims or to increase liquidity and claims-paying capacity, pursuant to Section 63049.75 of the Government Code.

(2) Enter into loan agreements with the California Infrastructure and Economic Development Bank, pursuant to Section 63049.75 of the Government Code.

(3) Enter into line of credit agreements with one or more entities for the purpose of financing the costs of claims or to increase liquidity and claims-paying capacity and to refund lines of credit previously incurred for that purpose.

(4) Secure those loan agreements, line of credit agreements, or agreements described in paragraph (5) by a pledge of, and the grant of a lien and security interest in, collateral, which may include premiums, revenues, receivables, assessments, and any other assets of the association. That pledge, lien, and security interest is subject to Division 9 (commencing with Section 9101) of the Commercial Code.

(5) Enter into any other agreement or take any other action necessary or convenient to the execution and delivery of bonds, loan agreements, or line of credit agreements.

(b) (1) If the bonds, loan agreements, or lines of credit described in subdivision (a) have received the prior approval of the commissioner as provided in subdivision (a), and if the association is otherwise unable to timely and fully meet its repayment obligation, the association shall assess members in the amounts and at the times necessary to timely pay in full all obligations of the association with respect to those bonds, loan agreements, lines of credit, and all obligations of the association under agreements entered into pursuant to paragraph (5) of subdivision (a).

(2) The FAIR Plan shall not act pursuant to this subdivision without the prior review and approval of the commissioner.

(c) (1) Once approved by the commissioner, specific repayment terms shall not be altered by subsequent amendment to the plan of operation, and amendments to the plan of operation shall not impair the timely payment in full of any obligations of the association with respect to those bonds, loan agreements, lines of credit, and all obligations of the association under agreements entered into pursuant to paragraph (5) of subdivision (a).

(2) The state shall not alter, amend, or restrict the provisions of this section in a manner adverse to the rights and interests of bondholders, credit providers, or other parties who have entered into bonds, line of credit agreements, or other agreements pursuant to paragraph (5) of subdivision (a), for so long as the bonds, lines of credit, or other agreements pursuant to paragraph (5) of subdivision (a) remain outstanding. This subdivision does not preclude altering, amending, or restricting this section if it expressly applies only to agreements issued or entered into on or after the effective date of that alteration, amendment, or restriction.

(3) The association may include the terms of paragraph (2) in an agreement relating to bonds, lines of credit, or other agreements entered into pursuant to paragraph (5) of subdivision (a).

(d) (1) The bonds, loan agreements, lines of credit, and agreements described in paragraph (5) of subdivision (a) may be secured by a statutory lien on all collateral in favor of the bond trustee, line of credit providers, and lenders, as applicable, to secure the payment and performance of all obligations of the association. This shall be a continuous lien on collateral effective from the time the first bond is issued, or the first line of credit agreement is executed and delivered, whether or not a particular item of collateral exists at the time of the issuance or execution and delivery.

(2) The statutory lien shall be valid, effective, prior, perfected, binding, and enforceable without the need for notification, physical delivery, recordation, filing, or further action.

(3) For purposes of this subdivision, the beneficiary of the statutory lien becomes entitled to enforce the lien in accordance with the statute under which it was created if a payment default occurs in connection with a lien.

(e) As long as a bond, loan agreement, or line of credit is outstanding, the association shall not be subject to Article 14 (commencing with Section 1010) or Article 14.3 (commencing with Section 1064.1) of Chapter 1 of Part 2 of Division 1.