California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 7.7 - California Earthquake Authority › Section 2697.8 - Payment Plan Following Losses that Exceed the Authority's Available Assets

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) Upon the
				occurrence of any earthquake event in the State that is likely to give rise to
				significant covered losses, the staff of the Authority shall, within seven (7)
				calendar days of the date of the earthquake event, cause to be created a
				scientific model of anticipated, covered losses from that event. The output of
				the model for that event, as interpreted by Authority staff and retained
				actuary, shall be presented forthwith to the Board, which shall within 72
				(seventy-two) hours of receipt of that output convene as a group in a formal
				meeting, either in person or by teleconference, to consider the information
				presented. At the outset of the Board meeting contemplated by this Section, the
				Board shall hold a vote to make a finding that the meeting about to occur as a
				result of an "emergency situation," within the meaning of Government Code
				Section
				11125.5,
				subdivisions (a) and (b). In the absence of a finding of an "emergency
				situation" for that meeting, the Board shall adjourn forthwith and reconvene
				after providing public notice of that reconvened meeting in accordance with
				Government Code Section
				11125,
				subdivision (a).
(b) In the event
				the Board in its sole discretion determines that anticipated covered losses
				following an earthquake may exhaust the Authority's capital and that no
				additional source of funds such as available insurer assessments, proceeds of
				reinsurance contracts, proceeds of capital markets contracts, and all other
				funds available to or due the Authority, will be available to the Authority to
				pay policyholder claims, the Board shall draw up and present to the Insurance
				Commissioner a plan to pay covered earthquake claims against the Authority on a
				pro rata or installment basis.
(c)
				The payment plan shall ensure the equitable distribution of available CEA
				assets to all policyholders who have covered earthquake claims against the
				Authority. Upon approval of the plan by the Commissioner, the Board shall
				implement the plan. The plan shall be updated and resubmitted to the
				Commissioner for the Commissioner's approval at the end of every succeeding
				30-day period until all outstanding CEA claims have been closed or otherwise
				discharged.
(d) The plan shall
				ensure the maintenance of sufficient capital to ensure the continued operation
				of the Authority for the purpose of paying claims; discharging Authority debts,
				including bonded indebtedness; and paying or providing for other obligations of
				the Authority.
(e) The Authority's
				Plan of Operation shall be consistent with the provisions of this
				Section.
1. New section
				  filed 11-18-96 as an emergency; operative 11-18-96 (Register 96, No. 47). A
				  Certificate of Compliance must be transmitted to OAL by 3-18-97 or emergency
				  language will be repealed by operation of law on the following
				  day.
2. Repealed by operation of Government Code section
				  11346.1(g)
				  (Register 97, No. 14).
3. New section filed 4-1-97 as an emergency;
				  operative 4-1-97 (Register 97, No. 14). A Certificate of Compliance must be
				  transmitted to OAL by 7-30-97 or emergency language will be repealed by
				  operation of law on the following day.
4. Repealed by operation of
				  Government Code section
				  11346.1(g)
				  (Register 97, No. 32).
5. New section filed 8-4-97 as an emergency;
				  operative 8-4-97 (Register 97, No. 32). A Certificate of Compliance must be
				  transmitted to OAL by 12-2-97 or emergency language will be repealed by
				  operation of law on the following day.
6. Certificate of Compliance
				  as to 8-4-97 order transmitted to OAL 11-26-97 and filed 1-13-98 (Register 98,
				  No. 3).
7. Change without regulatory effect amending subsection (c)
				  filed 7-14-2021 pursuant to section
				  100, title 1, California Code of
				  Regulations (Register 2021, No. 29). Filing deadline specified in Government
				  Code section
				  11349.3(a)
				  extended 60 calendar days pursuant to Executive Order
				  N-40-20.
Note: Authority cited: Section
					 10089.11(b)
					 and
					 10089.35(a),
					 Insurance Code. Reference: Sections
					 10089.11
					 and
					 12921,
					 Insurance Code.