Study to Compare and Contrast the Ability of Captive Insurance and Other Financial Mechanisms to Provide for Costs of Closure, Postclosure Maintenance, and Corrective Action
AB 480 (Solorio, Chapter 713, Statutes of 2012) temporarily revises the conditions under which the use of captive insurance could be allowed as a financial assurance mechanism for solid waste landfills while limiting its use to providing not more than 50% of an owner or operator’s financial assurance obligation for closure, postclosure maintenance, and corrective action.
AB 480 requires the Department of Resources Recycling and Recovery (CalRecycle) to submit a report to the Legislature no later than January 1, 2017, that assesses the ability of captive insurance to serve as an effective financial assurance mechanism.
Assembly Bill 480
- Requires submittal of a report to the Legislature no later than January 1, 2017 that assesses the ability of captive insurance to serve as an effective financial assurance mechanism.
- Requires completion of a study that will:
- assess the pros and cons of all financial assurance mechanisms;
- assess the level of assurance provided by captive insurance relative to other mechanisms allowed;
- assess any financial liability the state may assume if financial assurance mechanisms fail;
- Authorizes CalRecycle to receive private funds for the purposes of conducting the study necessary to complete the report;
- Prohibits use of captive insurance unless sufficient private funds are received to conduct the study;
- The Governor’s Budget includes $200,000 for the anticipated cost of the study plus $60,000 for necessary audits for the 2013/14 fiscal year.
Next steps for implementation
- Request for Proposals for the contracted study (DRR13011): CalRecycle completed the advertisement for submittals for the Study to Identify Potential Long-Term Threats and Financial Assurance Mechanisms.
Submittal Due Date: June 14, 2013 - Notice of Intent to Award: This contract (DRR13011) will be awarded to ICF Resources, pending receipt of sufficient private funds.
- Receive funds from participants and determine if sufficient funds provided
- Section 100 regulation changes (to allow captive insurance)
- Receive and process requests for captive insurance
- Commence study
- Complete study, and
- Submit report to Legislature
Resources
AB 480 Financial Assurance Mechanisms Study–Update on Implementation Plan for Captive Insurance: A presentation given at the CalRecycle February 19, 2013 monthly public meeting.