The California Earthquake Authority Has Announced Management Changes and a Change in Its Claim-Paying Capacity

Business Wire, March 2, 2007

SACRAMENTO, Calif. -- Newly elected California Insurance Commissioner Steve Poizner and newly elected California Treasurer Bill Lockyer have joined the Governing Board of the CEA, replacing outgoing Insurance Commissioner John Garamendi and outgoing Treasurer Phil Angelides. Chief Executive Officer Elaine Bush is leaving the CEA to serve as the Chief Deputy Director for the California Department of Mental Health, having been asked by Governor Schwarzenegger to take that position, allowing her to return to the health and human services field where she worked for over 20 years. Chief Financial Officer Tim Richison will assume Ms. Bush's duties during the Governing Board's search for her successor.

The Governing Board of the CEA, in a regular public meeting on March 1, 2007, has accepted the claim-paying capacity recommended by staff for the year 2008 to allow the CEA to pay, at a minimum, all claims from a 1-in-600-year earthquake or series of earthquakes. The CEA's claim-paying capacity varies over time and is currently 1-in-800. The staff recommendation included an analysis of the cost and availability of reinsurance and concluded that the 1-in-600 level is prudent, enhances capital growth, and would result in a financial structure that would have a 99.833% probability of paying all claims that might arise from an earthquake, or series of earthquakes, during 2008.