California Senate Bill 1408, known as the California Life and Health Insurance Guarantee Association Act, makes significant coverage changes for structured settlements and annuities. Passed by both the State Senate and Assembly at the end of August and signed into law on September 25, 2010, it increases coverage limits for annuities and structured settlements from $100,000 to $250,000. The Guarantee Association will now pay annuity recipients up to $250,000 in the event the annuity-issuing life insurance company fails.
These increased coverages apply to structured settlements for California residents even if the structured settlement owner lives outside of California. The law also increases the amount insurers can be assessed to fund the obligations of the Guarantee Association–from1 percent to 2 percent. The changes were made to better coordinate California’s coverage law with other states.
To review SB 1408, go to: SB 1408
– Patrick C. Farber
Image Credit: Filomena Scalise