AB 2395: California Life and Health Insurance Guarantee Association.

Existing law, the California Life and Health Insurance Guarantee Association Act, protects specified persons against failure in the performance of contractual obligations because of the impairment or insolvency of a member insurer that issued a life or health insurance policy or specified annuity contract. Existing law provides that the California Life and Health Insurance Guarantee Association may, in its discretion and subject to specified limitations, guarantee, assume, or reinsure the policies of an impaired insurer, as defined. Existing law authorizes the associations board of directors to request that the Insurance Commissioner order an examination of a member insurer that may be impaired or insolvent, and requires the commissioner to begin the examination within 30 days of a request.

This bill would authorize the association to file for an actuarially justified rate or premium increase for a policy or contract for which the association provides coverage pursuant to the act, if specified requirements are met. The bill would require an insurer with long-term care insurance contracts covering more than 10,000 lives to file annual disclosure reports with the Insurance Commissioner and the Department of Insurances office of principle-based reserving, as specified.

Existing law requires the board of directors of the association to assess the member insurers for the purpose of providing funds necessary to carry out the powers and duties of the association.

This bill would require the association to annually provide a financial report to the commissioner and the chairs of the Senate Insurance Committee and the Assembly Insurance Committee that includes the maximum amount of coverage that the association may provide based on the assessments.