CIGA and Specific Excess Policies

The following information is of interest to self-insured employers who need guidance regarding a new law that redefines the responsibilities of the California Insurance Guarantee Association ("CIGA") under specific excess workers compensation policies issued by insurers that are now insolvent.  The new law took effect January 1, 2006.

Many self-insured employers have purchased specific excess workers’ compensation policies, intended to provide a layer of protection above a self-insured retention ("SIR") level, typically ranging from $250,000 to $500,000.  In many cases, these policies were issued by Reliance or its subsidiary Planet Insurance Company),Home Insurance Company and Mission Insurance Company, all of which are now insolvent.  Similar policies were also issued by financially troubled Kemper Insurance Companies (or subsidiaries Lumbermen's Mutual Casualty Company or American Motorists Ins. Co.)