CALIFORNIA INSURANCE GUARANTEE ASSOCIATION 2005

HISTORY ESTABLISHED IN 1969 CALIFORNA INSURANCE CODE, –A–ARTICLES 14.2 AND –§–§1063

CIGA Structure BOARD OF GOVERNORS – APPOINTED BY THE INSURANCE COMMISSIONER – 9 MEMBER COMPANIES – 4 MEMBERS FROM PUBLIC SECTOR

CIGA ORGANIZATION Board of Governors – Executive Director Finance Department Human Resources Operations Audit Claims - Liability Department - Workers’ Compensation Department

FUNDING Assessments Distributions form Estates Investment income Borrowed funds

CIGA FUNDS WORKERS’ COMPENSATION PERSONAL LINES OTHER

NOT COVERED Life, Annuity and Disability Title Fidelity and Surety Credit Mortgage & financial Ocean marine

IMPORTANT CIGA IS NOT AN INSURANCE COMPANY

ISSUES NO POLICIES COLLECTS NO PREMIUM NO PROFITS ASSUMES NO CONTRACTUAL OBLIGATIONS TO THE INSUREDS

HOW IS CIGA TRIGGERED? SUPERIOR COURT LIQUIDATION ORDER AND A FINDING OF INSOLVENCY OF THE INSURER

Pre ,100 Claims WC claims – 5 WC claims staff – 1 TPA 2,360 Liability claims – 6 liability claims staff – 1 TPA

Post 2000 LMI Insurance Co. – 727 liability claims Superior National Ins. Companies – 31, 140 wc claims Credit General Ins. – Ohio – 2,800 wc claims – 942 liability claims HIH & Great States Ins. – 7,492 wc claims

2001 Amwest Surety Ins. Co –1–174 Auto & Liability claims Sable Ins. Co –5–578 wc claims –2–279 liability claims Frontier Pacific Ins. –2–2,824 auto & liability

2001 Far West Insurance – 284 auto & liability claims Reliance Insurance Companies – 7,984 wc claims – 7,900 auto & liability claims PHICO – 506 wc claims – 77 liability claims

2002 National Auto & Casualty – 75 wc claims – 1,610 auto & homeowners Western Specialty. – 655 auto & liability claims Paula Insurance Co – 3,593 wc claims

2002 American Horizon –1–159 auto & liability Alistar Insurance –3–380 wc claims –1–1,039 auto & liability claims

2003 Western Growers – 600 wc claim Millers Insurance Co. – 138 auto & liability Legion & Villanova Insurance Companies – 15,000 wc claims – 12,100 auto & liability claims

2003 Home Insurance Co. – 1,000 wc claims – 3,500 liability claims Fremont Indemnity – 15,000 wc claims – 500 liability claims Pacific National Insurance Co. – 1,750 wc claims – 365 liability claims

2003 Wasatch Crest – 138 liability claims

2004 Commercial Casualty Ins. of NC – 1,168 liability claims Protective National Ins. Co. – 10 liability claims Casualty Reciprocal Exchange – 500 wc claims – 2 liability claims American Bonding. – 12 liability claims

Growth by Year YearTakeover , , , , , ???

Staffing Today In house claims staffing: – 50 WC – 24 Auto & Liability TPA’s – 12 with 23 locations – Approximately 560 claims staff adjusters, supervisors & managers

CURRENT OBLIGATIONS 5,445 Liability Claims – 3,969 handled in-house 54,000 Workers’ Compensation Claims – 4,600 handled in-house – 49,400 handled by Third Party Claims Administrators (TPA)

TPA OVERSIGHT CIGA PHILOSOPHY 7 COMPLIANCE REPRESENTATIVES IRVINE CALABASAS RANCHO CORDOVA SAN DIEGO PASADENA

COVERED CLAIMS – DUTIES (a) (b)

SPECIFIC NON-COVERED CLAIMS (c) – CT claims with other insurance – Contribution – DWD – MEDI-CAL/Medicare

SPECIFIC NON-COVERED CLAIMS CT CLAIMS – Insurance Code §1063.1(c)(9)(i) -- other coverage available to employee

SPECIFIC NON-COVERED CLAIMS CONTRIBUTION – Insurance Code §1063.1(c)(5)

SPECIFIC NON-COVERED CLAIMS General Special Employment

SPECIFIC NON-COVERED CLAIMS GOVERNMENT CLAIMS – §1063.1(c)(4) – EDD – LC § (DWD)