CIGA is a statutory association created by the California Legislature to pay claims for insolvent insurers and funded by assessments of Member Insurers, distributions from the estates of insolvent Member Insurers, and investment income. We have three separate funds organized by line of business that cover (1) workers' compensation claims, (2) homeowners and automobile claims (including personal injury), and (3) all other claims (e.g., products liability and commercial property and liability). 

Assessment & Surcharge


In accordance with section 1063.5 of the California Insurance Code, CIGA is required to collect initial premium charges from the member companies for the insolvency insurance provided by CIGA, in the amount necessary to pay covered claims and expenses of insolvent member insurers. The statute authorizes separate premium charges for each of the three categories of covered claims (automobile and homeowners claims, workers' compensation claims, and all other claims) that CIGA pays. It also currently limits premium charges to one percent of written premiums for any category of covered claims.

See all historical assessment information here.


The CIGA plan of operation, in accordance with section 1063.14 of the California Insurance Code, requires each member insurer to recoup a sum reasonably calculated to compensate the assessment paid by the member insurer through a surcharge on premium charged for insurance policies. The amount of the surcharge shall be separately stated on either a billing or policy declaration sent to an insured. CIGA shall determine the rate of the surcharge and the collection period for each category and these shall be mandatory for all member insurers of CIGA who write business in the three categories of funding. 

A copy of the surcharge notification letter can be found here.


California Insurance Code section 1063.73 provides for the ability of CIGA to request the issuance of bonds to more expeditiously and effectively provide for the payment of covered claims that arise as a result of the insolvencies of insurance companies providing workers' compensation insurance. On August 18, 2004, CIGA issued $750 million in bonds.

California Insurance Code section 1063.74 authorizes a special bond assessment to pay principal and interest due on those bonds issued for the Workers' Compensation Bond Fund established to provide additional funding to pay for workers' compensation covered claims. The amount of the special bond assessment is not limited by statute. CIGA executed a Loan Agreement in connection with the issuance of the bonds. CIGA covenanted in the Loan Agreement to levy Special Bond Assessments in an amount not less than 1% of net direct written premium and in an amount not less than 110% of the Adjusted Debt Service as defined in the Loan Agreement.

CIGA operates in accordance with California law

CIGA is authorized to pay and discharge only certain “covered claims” as that term is defined under California Insurance Code Sections 1063.1 and 1063.2 subject to additional statutory and case law limitations. The “covered claims” that CIGA is authorized may be more limited and/or restricted than the coverage that would have been afforded under the policy issued by the insolvent and liquidated insurer. To qualify as a “covered claim” for CIGA, the claim must satisfy all the requirements set forth in California Insurance Code Sections 1063.1 and 1063.2, including the requirement that the claim must be presented to the Liquidator in this state, if any, or CIGA on or before the last date fixed for the filing of claims in the domiciliary liquidation proceeding.