California Insurance Code

§ 10089.15

INS § 10089.15 Effective Sep 27, 1996Div. 2 · Part 1 · Ch. 8.6

Statute text

(a)Initial operating capital shall be contributed by insurance companies admitted to write residential property insurance in the state. Each insurer that elects to participate in the authority shall contribute as its share of operating capital an amount equal to one billion dollars ($1,000,000,000) multiplied by the percentage representing that insurer’s residential earthquake insurance market share as of January 1, 1994, as determined by the board. A minimum of seven hundred million dollars ($700,000,000) in commitments shall be required before the authority may become operational.

(b)Until the authority becomes operational, contributions of initial operating capital shall be held by the commissioner in trust for the contributing insurers in the California Earthquake Authority Fund.

(c)Because insurers will retain the risk of earthquake losses on individual earthquake policies until they are renewed into the authority, participating insurers may elect to contribute operating capital in 12 installments payable on the first day of each successive calendar month after the insurer elects to participate. Each insurer shall compute its monthly installment based on the portion of the insurer’s earthquake coverage that will be renewed into the authority during the next month. The final installment shall be equal to the excess of the participating insurer’s required contribution over the sum of the previous 11 installments. Those insurers that elect to participate in the authority after the beginning operating date of the authority shall make initial capital contributions calculated using their residential earthquake insurance market share as of January 1, 1994, or the date of their election to participate in the authority, whichever contribution amount is greater.

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Legislative history

Amended (as added by Stats. 1995, Ch. 944) by Stats. 1996, Ch. 968, Sec. 4. Effective September 27, 1996.