"A more efficient CIGA will lower the cost of insurance for every policyholder in the state," said Commissioner Poizner. "They must take expedient action and implement the recommended changes so CIGA can better serve policyholders after insurance company insolvencies."
CIGA is the so-called safety net that pays the claims of insolvent property, casualty and workers' compensation insurance carriers that are licensed to do business in the state. It is funded by assessments paid by insurance companies.
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.
A copy of the report can be found at www.insurance.ca.gov.
This is the fifth top down review ordered by Commissioner Poizner in order to improve the efficiency of state government and regulated entities. Previously, he completed a top down review of the entire Department of Insurance which allowed CDI to cut its operating budget by nearly 15 percent and lower fees. Poizner has also overseen operational reviews of the State Fund which made recommendations to improve governance and operations as the state's workers' compensation insurer of last resort and the Workers' Compensation Insurance Rating Bureau.