Worker's Compensation Insurance

24 Q: How does the insolvency of an insurance company affect outstanding claims? A: Fortunately, there is protection for both employers and employees when a workers’ compensation insurer becomes insolvent. The Insurance Commissioner oversees the conservation and liquidation of California insurance companies under appointment of the courts. The Conservation and Liquidation Office (CLO) of the CDI is responsible for handling the details of conservation and liquidation. Because the payment of workers’ compensation claims is crucial, the CLO works very closely with the California Insurance Guarantee Association (CIGA) to help ensure the timely payment of claims. This helps to relieve the burden employers and employees experience when an insurance company becomes insolvent. CIGA acts as a safety net and guarantees that claim payments will continue to be made whether or not the insolvent insurance company’s liquidated assets are enough to cover claims. For more information on the conservation and liquidation process, contact the CDI through the information available in the “Talk to Us” section of this brochure. Also, the “Resources” section of this brochure contains contact information for CIGA.