News: 2009 Press Release
For Release: December 7, 2009
Media Calls Only: 916-492-3566
Insurance Commissioner Poizner Announces Appointments to Insurance Guarantee Association Board of Governors
California Insurance Commissioner Steve Poizner today announced the new appointment of Employers Compensation Insurance Company and the reappointments of California Casualty Insurance Company and Lawyers Mutual Insurance Company to the California Insurance Guarantee Association (CIGA) Board of Governors.
"We need a strong and robust guarantee association to handle claims should an insurance company go under," said Commissioner Poizner. "I look forward to working with them during their next term to implement many of the recommendations made during CDI's operational review released earlier this year."
CIGA operates under Sections 1063-1063.77 and Sections 11698.3 of the California Insurance Code, providing a mechanism for the payment of covered property, casualty, and workers' compensation insurance claims of insolvent insurance companies.
The CIGA Board of Governors is comprised of 13 members, consisting of nine insurer members and four members of the public. The insurance commissioner appoints all nine insurer members and at least five members of the board shall be domestic insurers, at least three of the members shall be stock insurers, and at least three shall be non-stock insurers. Of the four public members, two are appointed by the insurance commissioner; one business member and one labor member. Additionally, one public member is appointed by the president pro tem of the California Senate and one by the speaker of the California Assembly.
The term of appointment for the nine member insurers is three years with staggered terms. The members of the CIGA Board of Governors serve voluntarily and are not compensated for their services. They are reimbursed solely for expenses incurred, if and when requested. The CIGA Board of Governors meets quarterly in Los Angeles or San Francisco.
Stephen Festa is the senior vice president and chief claims officer for Employers Insurance Group. He's been with the company since 2004. He has more than 20 years of experience in the insurance industry and has held several executive-level claims positions in his career. He attended the University of Southern California and also completed the Advanced Executive Education Program sponsored by the American Institute for Chartered Property Casualty Underwriters (AICPCU) and the Wharton School of the University of Pennsylvania.
James Sevey is the executive vice president, managing director and general counsel of California Casualty Insurance and has been with the company since 1973. He is serving as CIGA's chair. Jim obtained a Bachelor of Science degree from Santa Clara University in 1971 and his law degree from Lincoln University in 1978. He obtained his Chartered Property & Casualty Underwriter designation in 1988.
Thomas Ault is the president and chief executive officer of Lawyers Mutual Insurance Company and has been with the company since 1981. He's been the company's president and chief executive officer since 2003. Ault is a former president of the San Diego County Bar Association and is a graduate of San Diego State University and the law school at the University of California, San Diego.
Commissioner Poizner released an operational review of the California Insurance Guarantee Association earlier this year that included 83 separate recommendations to make CIGA more efficient. The operational review made 83 specific recommendations, including:
- CIGA should develop standardized fees and payment schedules along with measurable performance standards and expectations that should be coordinated with CIGA's audit process.
- CIGA should develop a consistent contract process to include a review of the initial contract with standardized review intervals. The process should also document a standardized method by which a contract would be terminated.
- CIGA should review and evaluate the basis and process for the consolidation and related costs associated with the transition of cradle to grave contracts.
Please visit the Department of Insurance Web site at www.insurance.ca.gov. Non media inquiries should be directed to the Consumer Hotline at 800.927.HELP. Callers from out of state, please dial 213.897.8921. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.
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