Cal. Ins. Code § 1067.02

(a) This article shall provide coverage for the policies and contracts specified in subdivision (b) to all of the following:
1. (1) To persons who, regardless of where they reside (except for nonresident certificate holders under group policies or contracts), are the beneficiaries, assignees, or payees of the persons covered under paragraph (2).
2. (2) To persons who are owners of or certificate holders under the policies or contracts, other than structured settlement annuities, and in each case who either:
  1. (A) Are residents of this state.
  2. (B) Are not residents, but only under all of the following conditions:
    1. (i) The insurer that issued the policies or contracts is domiciled in this state.
    2. (ii) The states in which the persons reside have associations similar to the association created by this article.
    3. (iii) The persons are not eligible for coverage by the association in their resident state due to the fact that the insurer was not licensed in that state at the time specified in that state’s guaranty association law.
3. (3) For structured settlement annuities specified in subdivision (b), paragraphs (1) and (2) of this subdivision shall not apply, and this article shall, except as provided in paragraphs (4) and (5) of this subdivision, provide coverage to a person who is a payee under a structured settlement annuity, or beneficiary of a payee if the payee is deceased, if the payee is either:
  1. (A) A resident of this state, regardless of where the contract owner resides.
  2. (B) Not a resident, but only if both of the following conditions are satisfied:
    1. (i) The contract owner of the structured settlement annuity is a resident, or the contract owner of the structured settlement annuity is not a resident, but the insurer that issued the structured settlement annuity is domiciled in this state, and the state in which the contract owner resides has an association similar to the association created by this article.
    2. (ii) Neither the payee, or beneficiary, nor the contract owner is eligible for coverage by the association of the state in which the payee or contract owner resides.
4. (4) This article shall not provide coverage to a person who is a payee, or beneficiary, of a contract owner resident of this state, if the payee, or beneficiary, is afforded coverage by the association of another state.
5. (5) This article is intended to provide coverage to a person who is a resident of this state and, in special circumstances, to a nonresident. In order to avoid duplicate coverage, if a person who would otherwise receive coverage under this article is provided coverage under the laws of any other state, the person shall not be provided coverage under this article. In determining the application of the provisions of this paragraph in situations where a person could be covered by the association of more than one state, whether as an owner, payee, beneficiary, or assignee, this article shall be construed in conjunction with other state laws to result in coverage by only one association.
(b)
1. (1) This article shall provide coverage to the persons specified in subdivision (a) for direct, nongroup life, health, or annuity policies or contracts, and supplemental contracts to any of these, and for certificates under direct group policies and contracts, except as limited by this article. Annuity contracts and certificates under group annuity contracts include allocated funding agreements, structured settlement annuities, and any immediate or deferred annuity contracts. The health policies and contracts covered under this article include, but are not limited to, basic hospital, medical, and surgical insurance, major medical insurance, disability income insurance, disability insurance, including insurance appertaining to injury, disablement, or death resulting to the insured from accidents, and appertaining to disablements resulting to the insured from sickness, and long-term care insurance, including any net cash surrender and net cash withdrawal values.
2. (2) This article shall not provide coverage for any of the following:
  1. (A) Any portion of a policy or contract not guaranteed by the insurer, or under which the risk is borne by the policy owner or contract owner.
  2. (B) Any policy or contract of reinsurance, unless assumption certificates have been issued pursuant to the reinsurance policy or contract.
  3. (C) A portion of a policy or contract to the extent that the rate of interest on which it is based or the interest rate, crediting rate, or similar factor determined by the use of an index or other external reference which is stated in the policy or contract and employed in calculating returns or changes in value does both of the following:
    1. (i) Averaged over the period of four years prior to the date on which the member insurer becomes an impaired or insolvent insurer under this article exceeds the rate of interest determined by subtracting two percentage points from Moody’s Corporate Bond Yield Average averaged for that same four-year period or for the lesser period if the policy or contract was issued less than four years before the member insurer becomes an impaired or insolvent insurer under this article, not to go below a minimum of 0 percent.
    2. (ii) On and after the date on which the member insurer becomes an impaired or insolvent insurer under this article exceeds the rate of interest determined by subtracting three percentage points from Moody’s Corporate Bond Yield Average as most recently available, not to go below a minimum of 0 percent.
  4. (D) An unallocated annuity contract.
  5. (E) A portion of a policy or contract issued to a plan or program of an employer, association, or other person to provide life, health, or annuity benefits to its employees, members, or others, to the extent that the plan or program is self-funded or uninsured, including, but not limited to, benefits payable by an employer, association, or other person under any of the following:
    1. (i) A multiple employer welfare arrangement as defined in Section 1144 of Title 29 of the United States Code.
    2. (ii) A minimum premium group insurance plan.
    3. (iii) A stop-loss group insurance plan.
    4. (iv) An administrative services only contract.
  6. (F) A portion of a policy or contract to the extent that it provides for any of the following:
    1. (i) Dividends or experience rating credits.
    2. (ii) Voting rights.
    3. (iii) Payment of any fees or allowances to any person, including the policy or contract owner, in connection with the service to or administration of the policy or contract.
  7. (G) Any policy or contract issued in this state by a member insurer at a time when it was not licensed or did not have a certificate of authority to issue the policy or contract in this state.
  8. (H) Any annuity issued by a charitable organization that is duly qualified as such under applicable provisions of the Internal Revenue Code, and that is not engaged in the business of insurance as its primary business.
  9. (I) A portion of a policy or contract to the extent that the assessments required by Section 1067.08 with respect to the policy or contract are preempted or otherwise not permitted by federal or state law.
  10. (J) An obligation that does not arise under the express written terms of the policy or contract issued by the insurer to the contract owner or policy owner, including without limitation, any of the following:
    1. (i) Claims based on marketing materials.
    2. (ii) Claims based on side letters, riders, or other documents that were issued by the insurer without meeting applicable policy form filing or approval requirements.
    3. (iii) Misrepresentations of, or regarding, policy benefits.
    4. (iv) Extracontractual claims.
    5. (v) A claim for penalties or consequential or incidental damages.
  11. (K) A contractual agreement that establishes the member insurer’s obligations to provide a book value accounting guaranty for defined contribution benefit plan participants by reference to a portfolio of assets that is owned by the benefit plan or its trustee, which in each case is not an affiliate of the member insurer.
  12. (L) A portion of a policy or contract to the extent it provides for interest or other changes in value to be determined by the use of an index or other external reference stated in the policy or contract, but which have not been credited to the policy or contract, or as to which the policy or contract owner’s rights are subject to forfeiture, as of the date the member insurer becomes an impaired or insolvent insurer under this article, whichever is earlier. If a policy’s or contract’s interest or changes in value are credited less frequently than annually, then for purposes of determining the values that have been credited and are not subject to forfeiture pursuant to this subparagraph, the interest or change in value determined by using the procedures defined in the policy or contract shall be credited as if the contractual date of crediting interest or changing values was the date of impairment or insolvency, whichever is earlier, and shall not be subject to forfeiture.
  13. (M) A policy or contract providing any hospital, medical, prescription drug, or other health care benefits pursuant to Part C of Title XVIII of the Social Security Act (42 U.S.C. Sec. 1395w-21 et seq.) or Part D of Title XVIII of the Social Security Act (42 U.S.C. Sec. 1395w-101 et seq.), commonly known as Medicare Parts C and D, or any regulations issued pursuant thereto.
(c) The benefits for which the association may become liable for life insurance and annuity policies shall in no event exceed the lesser of the following:
1. (1) Eighty percent of the contractual obligations for each policy or contract as modified pursuant to subparagraph (C) of paragraph (2) of subdivision (b), for which the insurer is liable or would have been liable if it were not an impaired or insolvent insurer.
2. (2)
  1. (A) With respect to any one life, regardless of the number of policies or contracts:
    1. (i) Three hundred thousand dollars ($300,000) in life insurance death benefits, but not more than one hundred thousand dollars ($100,000) in net cash surrender and net cash withdrawal values for life insurance.
    2. (ii) Two hundred fifty thousand dollars ($250,000) in the present value of annuity benefits, including net cash surrender and net cash withdrawal values.
  2. (B) With respect to each payee of a structured settlement annuity, or beneficiaries of the payee if deceased, two hundred fifty thousand dollars ($250,000) in present value annuity benefits, in the aggregate, including net cash surrender and net cash withdrawal values.
  3. (C) Notwithstanding subparagraphs (A) and (B), in no event shall the association be obligated to cover more than an aggregate of three hundred thousand dollars ($300,000) in benefits with respect to any one life under subparagraphs (A) and (B).
  4. (D) Notwithstanding subparagraphs (A), (B), and (C), with respect to one owner of multiple nongroup policies of life insurance, whether the policy owner is an individual, firm, corporation, or other person, and whether the persons insured are officers, managers, employees, or other persons, in no event shall the association be obligated to cover more than five million dollars ($5,000,000) in benefits, regardless of the number of policies and contracts held by the owner.
(d) The health insurance benefits for which the association may become liable shall in no event exceed the lesser of the following:
1. (1) The contractual obligations for which the insurer is liable or for which the insurer would have been liable if it were not an impaired or insolvent insurer.
2. (2) With respect to any one individual receiving health care benefits, regardless of the number of policies or contracts, two hundred thousand dollars ($200,000) in health insurance benefits; an amount that shall increase or decrease based upon changes in the health care cost component of the consumer price index from January 1, 1991, to the date on which the insurer becomes an insolvent insurer.
(e) The limitations set forth in subdivisions (c) and (d) are limitations on the benefits for which the association is obligated before taking into account either its subrogation and assignment rights or the extent to which those benefits could be provided out of the assets of the impaired or insolvent insurer attributable to covered policies. The costs of the association’s obligations under this article may be met by the use of assets attributable to covered policies or reimbursed to the association pursuant to its subrogation and assignment rights.
(f) In performing its obligations to provide coverage under Section 1067.07, the association shall not be required to guarantee, assume, reinsure, or perform, or cause to be guaranteed, assumed, reinsured, or performed, the contractual obligations of the insolvent or impaired insurer under a covered policy or contract that do not materially affect the economic values or economic benefits of the covered policy or contract.