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 percent 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. This webpage will be updated regularly to include the latest information on implementation of AB 480.

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.