CALIFORNIA INSURANCE GUARANTEE ASSOCIATION

1. CALIFORNIA INSURANCE GUARANTEE ASSOCIATION 2005

2. HISTORY • ESTABLISHED IN 1969 • CALIFORNA INSURANCE CODE, • ARTICLES 14.2 AND 14.25 • §1063

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

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

5. FUNDING • Assessments • Distributions form Estates • Investment income • Borrowed funds

6. CIGA FUNDS • WORKERS’ COMPENSATION • PERSONAL LINES • OTHER

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

8. IMPORTANT CIGA IS NOT AN INSURANCE COMPANY

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

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

11. Pre-2000 • 4,100 Claims WC claims • 5 WC claims staff • 1 TPA • 2,360 Liability claims • 6 liability claims staff • 1 TPA

12. 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

13. 2001 • Amwest Surety Ins. Co • 174 Auto & Liability claims • Sable Ins. Co • 578 wc claims • 279 liability claims • Frontier Pacific Ins. • 2,824 auto & liability

14. 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

15. 2002 • National Auto & Casualty • 75 wc claims • 1,610 auto & homeowners • Western Specialty . • 655 auto & liability claims • Paula Insurance Co • 3,593 wc claims

16. 2002 • American Horizon • 159 auto & liability • Alistar Insurance • 380 wc claims • 1,039 auto & liability claims

17. 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

18. 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

19. 2003 • Wasatch Crest • 138 liability claims

20. 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

21. Growth by Year • Year Takeover • 2000 33,466 • 2001 28,771 • 2002 8,127 • 2003 50,091 • 2004 1,692 • 2005 ???...................

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

23. 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)

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

25. COVERED CLAIMS • DUTIES • 1063.2(a) • 1063.2(b)

26. SPECIFIC NON-COVERED CLAIMS • 1063.1(c) • CT claims with other insurance • Contribution • DWD • MEDI-CAL/Medicare

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

28. SPECIFIC NON-COVERED CLAIMS • CONTRIBUTION • Insurance Code §1063.1(c)(5)

29. SPECIFIC NON-COVERED CLAIMS • General Special Employment

30. SPECIFIC NON-COVERED CLAIMS • GOVERNMENT CLAIMS • §1063.1(c)(4) • EDD • LC §4706.5 (DWD)