AB 2996: California FAIR Plan Association.

The California FAIR Plan Association is a joint reinsurance association in which all insurers licensed to write basic property insurance participate in administering a program for the equitable apportionment of basic property insurance for persons who are unable to obtain that coverage through normal channels. Existing law requires the associations plan of operation and any amendment to the plan to be approved by the Insurance Commissioner. Existing law establishes the California Infrastructure and Economic Development Bank and authorizes it to issue bonds to provide funds for the payment of costs of a project for a participating party or upon request by a state entity.

This bill would authorize the association association, if granted prior approval from the commissioner, to request the California Infrastructure and Economic Development Bank to issue bonds, and would authorize the bank to issue those bonds to finance the costs of claims, to increase liquidity and claims-paying capacity of the association, and to refund bonds previously issued for that purpose. The bill would specify that the association is a participating party and that financing all or any portion of the costs of claims or to increase liquidity and the claims-paying capacity of the association is a project for bond purposes. The bill would authorize the bank to loan the proceeds of issued bonds to the association, and would authorize the association to enter into a loan agreement with the bank and to enter into a line of credit agreement with an institutional lender or broker-dealer.

This bill would require the association, with the if the above-described bonds, loan agreements, or lines of credit received the prior approval of the commissioner, to assess all members to pay all loan payments and the costs and expenses relating to a loan agreement with the bank, as well as to assess all members to repay a line of credit and its related costs and expenses. 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, or lines of credit and related agreements, as specified.

Existing law establishes the California Infrastructure and Economic Development Bank Fund, a continuously appropriated fund, for the purpose of implementing the objectives of the bank.

To the extent that the bill would result in additional revenues being deposited into the California Infrastructure and Economic Development Bank Fund, the bill would make an appropriation.

This bill would declare that it is to take effect immediately as an urgency statute.