2009 California Insurance Code - Section 11885-11886.2 :: Article 7. Transfer Of Ownership

11885.  (a) The Director of Finance is hereby authorized to act as
agent for the state and, in that capacity, to sell a portion of, or
otherwise obtain value for, the State Compensation Insurance Fund's
assets and liabilities. That authorized sale or other disposition
shall be transacted with an entity that the director, in consultation
with the State Treasurer, determines will provide the best
combination of each of the following:
   (1) The highest price for the State Compensation Insurance Fund's
workers' compensation insurance assets and liabilities or the best
value to the General Fund, or both.
   (2) The greatest security for the payment of the purchase price.
   (3) Demonstrated competence and professional qualifications for
the continued satisfactory performance of the workers' compensation
insurance services offered for sale or other disposition.
   (b) Prior to releasing any Notice of Request for Qualifications, a
majority of the State Compensation Insurance Fund Board of Directors
shall concur that the assets and liabilities that are identified by
the Director of Finance, in consultation with the State Treasurer, in
subdivision (a) are appropriate for sale or other disposition.
   (c) Notwithstanding any other law, the process for sale or other
disposition shall include the steps the director, in consultation
with the State Treasurer, deems necessary or convenient to achieve
the ends set forth in this section. The process shall include, but
not necessarily be limited to, all of the following:
   (1) The satisfaction of criteria established by the director, in
consultation with the State Treasurer, consistent with achieving the
best price or other value for those workers' compensation insurance
assets and liabilities. These criteria shall include any pertinent
requirements of the State Compensation Insurance Fund Board of
Directors.
   (2) A Notice of Request for Qualifications sent by the Director of
Finance to each firm currently providing workers' compensation
insurance coverage to California employers and any entity proposed by
the State Compensation Insurance Fund Board of Directors. In
addition, it shall be advertised in the State Contracts Register
pursuant to Sections 14827.1 and 14827.2 of the Government Code. This
notice shall include a description of the workers' compensation
insurance program, a summary description of the workers' compensation
insurance assets and liabilities offered for sale or other
disposition, and a description of the due diligence review process to
provide potential purchasers with further information regarding the
workers' compensation insurance assets and liabilities offered for
sale or other disposition, the selection criteria on which the
transaction will be based, the submission requirements and deadlines,
and a Department of Finance contact name and telephone number for
more information. A copy of the Notice of Request for Qualifications
shall be provided to the Joint Legislative Budget Committee within
seven days of its release.
   (3) The evaluation by the director, in consultation with the State
Treasurer, of all statements timely submitted in response to the
Notice of Request for Qualifications sent pursuant to paragraph (2),
using the criteria contained in the notice, and, based on those
statements, the establishment of a qualified participant list.
   (4) For purposes of Section 11772, any action by the board of
directors related to any transaction contemplated by this article,
including, but not limited to, any approvals of such transactions,
shall be deemed to be in good faith.
   (5) The Director of Finance shall notify the Joint Legislative
Budget Committee in writing within seven days of completing a sale
pursuant to subdivision (a).

11885.3.  In order to accomplish the purpose of this article, the
State Compensation Insurance Fund and its board of directors shall
participate fully in good faith with the Director of Finance, and the
Director of Finance shall act in good faith in carrying out the
duties prescribed by this article.

11885.5.  Notwithstanding any other law, the approval of neither the
Attorney General, nor the Insurance Commissioner, nor the Director
of General Services is required for execution and implementation of
the sale or other disposition of the assets and liabilities of the
State Compensation Insurance Fund or any other agreement authorized
by this article.

11885.7.  (a) The Director of Finance shall deposit all proceeds of
any sale of, or any funds achieved through any other disposition of,
the State Compensation Insurance Fund's workers' compensation
insurance assets and liabilities under this article, less any costs
related to that transaction, into the General Fund.
   (b) The proceeds of any sale of, or any funds achieved through any
other disposition of, the State Compensation Insurance Fund's
workers' compensation insurance assets and liabilities are not
"proceeds of taxes" as that term is used in subdivision (c) of
Section 8 of Article XIII B of the California Constitution. The
disbursement of these proceeds is not subject to the limitations
imposed by that article.

11885.9.  (a) Notwithstanding any other law, the Director of Finance
is authorized to enter into agreements with firms or individuals to
act as advisers to the state in the transactions contemplated by this
article. Section 14838 of the Government Code and Article 4
(commencing with Section 10335) of Chapter 2 of Part 2 of Division 2
of the Public Contract Code do not apply to any agreement entered
into by the director with advisers pursuant to this section.
   (b) Notwithstanding any other law, the Director of Finance is also
authorized to enter into legal services agreements to obtain
specialized legal advice related to the transactions contemplated by
this article. Section 11040 of the Government Code and Section 6072
of the Business and Professions Code shall not apply to the legal
services agreements entered into by the director pursuant to this
section.

11886.  (a) The Director of Finance, in consultation with the State
Treasurer, shall select firms or individuals to provide advisory
services based on demonstrated competence and professional
qualifications necessary for the satisfactory performance of the
services required and in the manner described in this section.
   (b) The Director of Finance, in consultation with the State
Treasurer, shall establish selection criteria for selecting advisers.
The criteria may include, but are not necessarily limited to,
factors such as professional excellence, demonstrated competence,
specialized experience in performing similar services, education and
experience of key personnel to be assigned, staff capability, ability
to meet schedules, nature and quality of similar completed work of
the firm or individual, reliability and continuity of the firm or
individual, and other considerations deemed by the director, in
consultation with the State Treasurer, to be relevant and necessary
to the performance of advisory services.
   (c) In order to select advisers, the director shall publish a
Notice of Request for Qualifications in the State Contracts Register
pursuant to Sections 14827.1 and 14827.2 of the Government Code. The
notice shall include a description of the advisory services required,
the selection criteria on which the contract award will be based,
submission requirements and deadlines, and a Department of Finance
contact name and telephone number for more information. A copy of the
Notice of Request for Qualifications shall be provided to the Joint
Legislative Budget Committee within seven days of publication in the
State Contracts Register.
   (d) (1) After the final response date stated in the Notice of
Request for Qualifications, the Director of Finance, in consultation
with the State Treasurer, shall review the responses submitted, and
shall evaluate them using the criteria contained in the notice. The
director shall rank, in order of preference based on the criteria
contained in the notice, the firm or individuals determined to be
qualified to perform the required services.
   (2) The Director of Finance, in consultation with the State
Treasurer, may interview any of the qualified firms or individuals
regarding the experience and qualifications of those firms or
individuals, as well as anticipated concepts and the benefits of
alternative methods of furnishing the required services.
   (e) (1) Following the interviews, if any, held pursuant to
subdivision (d), the Director of Finance shall adjust the ranking of
the qualified individuals or firms to reflect those firms or
individuals deemed to be the most highly qualified to perform the
required services.
   (2) The Director of Finance, in consultation with the State
Treasurer, shall enter into negotiations with the firm or individual
most highly ranked pursuant to paragraph (1). If negotiations are
concluded successfully, the director shall enter into a contract. If
the director, in his or her sole discretion, concludes that the
negotiations are unsuccessful, the director shall terminate the
negotiations, and begin new negotiations, in consultation with the
State Treasurer, with the other firms or individuals ranked pursuant
to paragraph (1) in order of their ranking, and either contract with
or terminate negotiations with each next most highly ranked firm or
individual.
   (3) If, after pursuing the negotiation process set forth in
paragraph (2), the Director of Finance has been unable to negotiate a
satisfactory contract at fair and reasonable compensation, the
director may reinstate the selection process prescribed in this
section, commencing with the issuance of a new Notice of Request for
Qualifications.
   (4) The Director of Finance shall notify the Joint Legislative
Budget Committee in writing within seven days of entering into a
contract with an individual or firm for advisory services.
   (f) This section shall not apply to the selection of a legal
services adviser.

11886.2.  (a) The Director of Finance shall notify the Joint
Legislative Budget Committee in writing upon his or her determination
that neither the sale nor any other transaction authorized by this
article is anticipated to achieve the purposes of this article or
upon the completion of a disposition of State Compensation Insurance
Fund assets and liabilities pursuant to this article.
   (b) The Director of Finance shall cease those activities he or she
is authorized or directed to undertake pursuant to this article upon
the earlier of either:
   (1) The 30th day following written notice by the director to the
Chairperson of the Joint Legislative Budget Committee pursuant to
subdivision (a).
   (2) January 10, 2012.