Opinion No. (2003)

BILL LOCKYER Attorney General SUSAN DUNCAN LEE Deputy Attorney General THE CALIFORNIA PUBLIC EMPLOYEES' RETIREMENT SYSTEM has requested an opinion on the following question: May the California Public Employees' Retirement System allow its fiduciaries to purchase "waivers of recourse" coverage from its self-insurance program? CONCLUSION The California Public Employees' Retirement System may allow its fiduciaries to purchase "waivers of recourse" coverage from its self-insurance program. ANALYSIS The California Public Employees' Retirement System ("CalPERS") maintains a self-insurance program to provide defense against and indemnification of various claims, including breach-of-fiduciary-duty claims brought against CalPERS fiduciaries as individuals. (See Gov. Code, §§ 11007.4 , 11007.8 .) 1 The advantage to CalPERS is that the self-insurance program can be operated at lower cost than obtaining commercially available insurance policies. (See § 20152 .) The CalPERS self-insurance program for its fiduciaries excludes coverage for fines, punitive damages, exemplary damages, claims for intentional acts, and claims arising from a fiduciary's personal gain resulting from…