The California Insurance Guarantee Association (CIGA) operates under Articles 14 and 14.25 , Sections 106 3106 3.68 of the California Insurance Code.
CIGA provides a mechanism for the payment of covered (as defined by the insurance code and case law) property, casualty and workers compensation insurance claims of insolvent insurance companies. It is the mission of the association to pay claims on a timely basis with no excessive delays and to help relieve the financial burden placed on claimants when insurance companies fail.
California Insurance Guarantee Association Reimbursed $56 Million
Continental Casualty Co. has reimbursed the California Insurance Guarantee Association (CIGA) nearly $56 million by for payments previously made to injured workers, the California Department of Insurance announced.
The California Insurance Guarantee Association was created to pay the claims of insolvent property and casualty insurance carriers that are licensed to do business in the state of California. After Superior National Insurance Co. (SNIC) failed, CIGA stepped in and paid more than $500 million in workers’ compensation claims. SNIC had purchased a $50 million surety bond from Continental Casualty Co. (CCC) guaranteeing the obligations of SNIC. According to DOI, CCC balked at paying the amount owed. After several years of litigation, the case was successfully settled with Continental paying the sum of $56.25 million. After deducting litigation related expenses, the California Insurance Guarantee Association received nearly $56 million for payments previously made to injured workers.