(a) If the insurer is a member insurer of the California Insurance Guarantee Association (the association) and has been the subject of an order of liquidation or receivership with a finding of insolvency which has been entered by a court of competent jurisdiction the association then becomes obligated to pay compensable workers’ compensation claims arising under the insurer’s policies, which are otherwise “covered claims” as defined in Article 14.2 (commencing with Section 1063) of Chapter 1 of Part 2 of Division 2. The commissioner shall immediately take control or possession of the deposit required pursuant to Section 11691 and shall transfer the deposit to the association.

(b) The association shall use the proceeds of the deposit and any interest earned thereon, for the payment of compensable workers’ compensation claims arising under the insolvent insurer’s policies and which are otherwise covered claims, as defined in Article 14.2 (commencing with Section 1063) of Chapter 1 of Part 2 of Division 2, and all expenses related thereto.

(c) The association shall make a full report and accounting of the disposition of the deposit on or in the form and at the times as the commissioner shall request, including a report of all interest income earned on the deposit.

(d) At the time all of the insolvent insurer’s California workers’ compensation claims liabilities are discharged, or at the time it is actuarially determined that the remaining proceeds, and any interest earned thereon, exceed those liabilities, the association shall return the surplus to the insolvent insurer’s estate.

(Added by Stats. 2002, Ch. 899, Sec. 2. Effective January 1, 2003.)