A bill that allows the California Earthquake Authority to collect an assessment from insurers to pay for policyholder claims after an earthquake has been signed into law by Governor Arnold Schwarzenegger.
The California Earthquake Authority (CEA) is a publicly managed, largely privately funded organization that provides catastrophic residential earthquake insurance to state residents. According to the legislation, California Senate Bill 430, CEA will be allowed to collect up to $1.3 billion from participating insurers to pay claims after other specified sources of funds have been depleted.
The CEA said that current sources of funds to pay claims include the authority to levy approximately $3.66 billion in assessments on participating insurers, but that $2.2 billion of that assessment authority expires by law on Dec. 1, 2008. Without the enactment of SB 430, the CEA's claims-paying capacity would have been substantially reduced.
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