Bill Text: CA AB480 | 2011-2012 | Regular Session | Amended
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Insurance: solid waste facilities.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2012-09-28 - Chaptered by Secretary of State - Chapter 713, Statutes of 2012. [AB480 Detail]
Download: California-2011-AB480-Amended.html
Bill Title: Insurance: solid waste facilities.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2012-09-28 - Chaptered by Secretary of State - Chapter 713, Statutes of 2012. [AB480 Detail]
Download: California-2011-AB480-Amended.html
BILL NUMBER: AB 480 AMENDED
BILL TEXT
AMENDED IN SENATE MAY 29, 2012
AMENDED IN SENATE APRIL 30, 2012
AMENDED IN SENATE JUNE 23, 2011
AMENDED IN SENATE JUNE 10, 2011
AMENDED IN SENATE JUNE 2, 2011
INTRODUCED BY Assembly Member Solorio
FEBRUARY 15, 2011
An act to amend, repeal, and add Section 1760 of the Insurance
Code, and to amend, repeal, and add Section 43601 of , and to
add Section 43601.2 to, the Public Resources Code, relating to
insurance.
LEGISLATIVE COUNSEL'S DIGEST
AB 480, as amended, Solorio. Insurance: solid waste facilities.
Existing law regulates solid waste facilities and requires that
any person owning or operating a solid waste landfill submit evidence
of financial ability to provide for the cost of closure and
postclosure maintenance, except as specified. Existing law provides
that if the evidence of financial ability for closure, postclosure,
or corrective action is demonstrated by use of insurance, either
through an independent insurer or where the insurance carrier is
established by a solid waste facility operator to meet the financial
assurance obligations of that operator, the insurance mechanism may
be approved by the Department of Resources Recycling and Recovery if
the insurance carrier meets specified requirements.
This bill would specify that, until January 1, 2017
2018 , an insurance carrier established by a
solid waste facility operator to meet the financial assurance
obligations of that operator that meets all of those specified
requirements shall be eligible to provide that insurance and shall
not be required to be a California admitted insurer nor be required
to provide the insurance through a surplus line broker. The bill
would add as a requirement for approval of a solid waste facility
operator meeting its financial assurance obligations by establishing
an insurance carrier that the insurance mechanism not provide in
excess of 75% 50% of the financial
assurance obligation that the solid waste facility operator is
required to meet in the state. The bill would also
require the Department of Resources Recycling and Recovery, in
consultation with the Department of Insurance, to submit to the
Legislature, on or before January 1, 2016, a report on the use of the
mechanisms demonstrating financial ability to provide for the cost
of closure and postclosure maintenance, including, among other
things, any financial liability the state may assume if the
mechanisms permitted under this bill and existing law fail
.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1760 of the Insurance Code is amended to read:
1760. (a) (1) A home state insured, as defined in subdivision (f)
of Section 1760.1, may negotiate and effect insurance to protect
himself, herself, or itself against loss, damage, or liability with
any nonadmitted insurer.
(2) Notwithstanding any other law, an An
issuer of an insurance policy that meets all of the
requirements of paragraph (2) of subdivision (e) of Section 43601 of
the Public Resources Code shall be eligible to provide the insurance
described in that subdivision. An issuer of an insurance policy
pursuant to this section shall not be required to be a California
admitted insurer, nor be required to provide the insurance through a
surplus line broker.
(b) Every home state insured that effects insurance governed by
this chapter shall pay the tax imposed by Part 7.5 (commencing with
Section 13201) of Division 2 of the Revenue and Taxation Code.
(c) This section shall remain in effect only until January 1,
2017 2018 , and as of that date is
repealed, unless a later enacted statute, that is enacted before
January 1, 2017 2018 , deletes or
extends that date.
SEC. 2. Section 1760 is added to the Insurance Code, to read:
1760. (a) A home state insured, as defined in subdivision (f) of
Section 1760.1, may negotiate and effect insurance to protect
himself, herself, or itself against loss, damage, or liability with
any nonadmitted insurer.
(b) Every home state insured that effects insurance governed by
this chapter shall pay the tax imposed by Part 7.5 (commencing with
Section 13201) of Division 2 of the Revenue and Taxation Code.
(c) This section shall become operative on January 1,
2017 2018 .
SEC. 3. Section 43601 of the Public Resources Code is amended to
read:
43601. (a) The evidence of financial ability shall be sufficient
to meet the closure and postclosure maintenance costs when needed.
(b) The owner or operator of a solid waste landfill shall provide
evidence of financial ability through the use of any of the
mechanisms set forth in Part 258 (commencing with Section 258.1) of
Title 40 of the Code of Federal Regulations or through the use of any
other mechanisms approved by the department. However, the department
may adopt regulations that reasonably condition the use of one or
more of those mechanisms to ensure adequate protection of public
health and safety and the environment, but shall not exclude the use
of any mechanism permitted under federal law. In addition, the
evidence of financial ability submitted pursuant to Section 43600
shall provide that funds shall be available to the regional water
boards upon the issuance of any order under Chapter 5 (commencing
with Section 13300) of Division 7 of the Water Code to implement
closure and postclosure activities.
(c) The state water board or the appropriate regional water board
shall have access to the financial assurance funds for closure and
postclosure activities, and to financial assurance funds for
corrective action, as necessary, to address water quality problems,
if the owner or operator of the solid waste landfill has failed to
implement the required closure and postclosure activities or
corrective action activities.
(d) The owner or operator may request disbursement for
expenditures to conduct closure, postclosure maintenance, or
corrective actions from the financial assurance mechanism established
for that activity. Requests for disbursement shall be granted by the
department only if sufficient funds are remaining in the financial
assurance mechanism to cover the remaining approved total costs of
closure, postclosure maintenance, or corrective actions, as
appropriate.
(e) If the evidence of financial ability for closure, postclosure,
or corrective action is demonstrated by use of insurance, the
department may approve the insurance mechanism if it is in compliance
with either paragraph (1) or (2) as follows:
(1) The issuer of the insurance policy is either:
(A) Licensed by the Department of Insurance to transact the
business of insurance in the State of California as an admitted
carrier.
(B) Eligible to provide insurance as an excess and surplus lines
insurer in California through a surplus lines broker currently
licensed under the regulations of the Department of Insurance and
upon the terms and conditions prescribed by the Department of
Insurance.
(2) If the insurance carrier is established by a solid waste
facility operator to meet the financial assurance obligations of that
operator, insurance may be approved by the department that meets all
of the following requirements:
(A) The insurance mechanism is in full compliance with the
requirements for insurance that are specified in subdivision (d) of
Section 258.74 of Title 40 of the Code of Federal Regulations.
(B) The insurance carrier is an insurer domiciled in the United
States and licensed in its state of domicile to write that insurance.
(C) The insurance carrier only provides financial assurance to the
operator that has established the insurance carrier as a form of
self-insurance and does not engage in the business of marketing,
brokering, or providing insurance coverage to other parties.
(D) The insurance carrier shall maintain a rating of A- or better
by A.M. Best, or other equivalent rating by any other agency
acceptable to the department.
(E) If requested by the department, an independent financial audit
report evaluating the assets and liabilities of the insurance
carrier and confirming compliance with the statutory and regulatory
requirements of the state of domicile and an independent actuarial
opinion on the independence and financial soundness of the insurance
carrier by an actuary in good standing with the Casualty Actuarial
Society or the American Academy of Actuaries regarding the adequacy
of the loss reserves maintained by the insurance carrier shall be
submitted to the department upon application and annually thereafter.
(F) The insurance mechanism does not provide in excess of
75 50 percent of the financial assurance
obligation that the solid waste facility operator is required to meet
in the state.
(f) A solid waste facility operator using or proposing to use an
insurance company to demonstrate financial assurance may be required
by the department to pay a fee for the actual and necessary cost of
reviewing information submitted by the operator pursuant to paragraph
(2) of subdivision (e) up to an amount not to exceed ten thousand
dollars ($10,000), unless a higher amount is mutually agreed to by
the operator and the department.
(g) The funds collected pursuant to subdivision (f) shall be
deposited in the Integrated Waste Management Account and shall be
available, upon appropriation by the Legislature, for expenditure by
the department to fund the review specified in subdivision (f).
(h) This section shall remain in effect only until January 1,
2017 2018 , and as of that date is
repealed, unless a later enacted statute, that is enacted before
January 1, 2017 2018 , deletes or
extends that date.
SEC. 4. Section 43601 is added to the Public Resources Code, to
read:
43601. (a) The evidence of financial ability shall be sufficient
to meet the closure and postclosure maintenance costs when needed.
(b) The owner or operator of a solid waste landfill shall provide
evidence of financial ability through the use of any of the
mechanisms set forth in Part 258 (commencing with Section 258.1) of
Title 40 of the Code of Federal Regulations or through the use of any
other mechanisms approved by the department. However, the department
may adopt regulations that reasonably condition the use of one or
more of those mechanisms to ensure adequate protection of public
health and safety and the environment, but shall not exclude the use
of any mechanism permitted under federal law. In addition, the
evidence of financial ability submitted pursuant to Section 43600
shall provide that funds shall be available to the regional water
boards upon the issuance of any order under Chapter 5 (commencing
with Section 13300) of Division 7 of the Water Code to implement
closure and postclosure activities.
(c) The state water board or the appropriate regional water board
shall have access to the financial assurance funds for closure and
postclosure activities, and to financial assurance funds for
corrective action, as necessary, to address water quality problems,
if the owner or operator of the solid waste landfill has failed to
implement the required closure and postclosure activities or
corrective action activities.
(d) The owner or operator may request disbursement for
expenditures to conduct closure, postclosure maintenance, or
corrective actions from the financial assurance mechanism established
for that activity. Requests for disbursement shall be granted by the
department only if sufficient funds are remaining in the financial
assurance mechanism to cover the remaining approved total costs of
closure, postclosure maintenance, or corrective actions, as
appropriate.
(e) If the evidence of financial ability for closure, postclosure,
or corrective action is demonstrated by use of insurance, the
department may approve the insurance mechanism if it is in compliance
with either paragraph (1) or (2) as follows:
(1) The issuer of the insurance policy is either:
(A) Licensed by the Department of Insurance to transact the
business of insurance in the State of California as an admitted
carrier.
(B) Eligible to provide insurance as an excess and surplus lines
insurer in California through a surplus lines broker currently
licensed under the regulations of the Department of Insurance and
upon the terms and conditions prescribed by the Department of
Insurance.
(2) If the insurance carrier is established by a solid waste
facility operator to meet the financial assurance obligations of that
operator, insurance may be approved by the department that meets all
of the following requirements:
(A) The insurance mechanism is in full compliance with the
requirements for insurance that are specified in subdivision (d) of
Section 258.74 of Title 40 of the Code of Federal Regulations.
(B) The insurance carrier is an insurer domiciled in the United
States and licensed in its state of domicile to write that insurance.
(C) The insurance carrier only provides financial assurance to the
operator that has established the insurance carrier as a form of
self-insurance and does not engage in the business of marketing,
brokering, or providing insurance coverage to other parties.
(D) The insurance carrier shall maintain a rating of A- or better
by A.M. Best, or other equivalent rating by any other agency
acceptable to the department.
(E) If requested by the department, an independent financial audit
report evaluating the assets and liabilities of the insurance
carrier and confirming compliance with the statutory and regulatory
requirements of the state of domicile and an independent actuarial
opinion on the independence and financial soundness of the insurance
carrier by an actuary in good standing with the Casualty Actuarial
Society or the American Academy of Actuaries regarding the adequacy
of the loss reserves maintained by the insurance carrier shall be
submitted to the department upon application and annually thereafter.
(f) A solid waste facility operator using or proposing to use an
insurance company to demonstrate financial assurance may be required
by the department to pay a fee for the actual and necessary cost of
reviewing information submitted by the operator pursuant to paragraph
(2) of subdivision (e) up to an amount not to exceed ten thousand
dollars ($10,000), unless a higher amount is mutually agreed to by
the operator and the department.
(g) The funds collected pursuant to subdivision (f) shall be
deposited in the Integrated Waste Management Account and shall be
available, upon appropriation by the Legislature, for expenditure by
the department to fund the review specified in subdivision (f).
(h) This section shall become operative on January 1,
2017 2018 .
SEC. 5. Section 43601.2 is added to the
Public Resources Code , to read:
43601.2. On or before January 1, 2016, the Department of
Resources Recycling and Recovery, in consultation with the Department
of Insurance, shall submit to the Legislature a report on the use of
the mechanisms pursuant to paragraph (2) of subdivision (e) of
Section 43601 for demonstrating financial ability to provide for the
cost of closure and postclosure maintenance. The report shall, at a
minimum, address all of the following:
(a) A summary of any ratings reports, audit finding, or other
information regarding an owner or operator using financial mechanisms
pursuant to paragraph (2) of subdivision (e) of Section 43601 to
provide financial assurance.
(b) Whether financial mechanisms pursuant to paragraph (2) of
subdivision (e) of Section 43601 provide adequate financial assurance
to provide for the costs of solid waste landfill closure and
postclosure maintenance.
(c) The level of assurance provided by financial mechanisms
pursuant to paragraph (2) of subdivision (e) of Section 43601
relative to other mechanisms permitted pursuant to Section 43601.
(d) Any financial liability the state may assume if the mechanisms
permitted pursuant to Section 43601 fail.
(e) Any recommendations for ensuring solid waste landfill closure
and postclosure maintenance costs are properly assured to protect the
state from long-term postclosure and corrective action costs in the
event that a landfill owner or operator fails to meet its legal
obligations.
