BILL NUMBER: SB 1495	CHAPTERED  07/16/04

	CHAPTER  160
	FILED WITH SECRETARY OF STATE  JULY 16, 2004
	APPROVED BY GOVERNOR  JULY 15, 2004
	PASSED THE ASSEMBLY  JULY 1, 2004
	PASSED THE SENATE  MAY 17, 2004
	AMENDED IN SENATE  MAY 12, 2004
	AMENDED IN SENATE  APRIL 26, 2004

INTRODUCED BY   Senators Machado and Karnette

                        FEBRUARY 19, 2004

   An act to add Section 758.7 to the Insurance Code, relating to
insurance fees.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1495, Machado.  Insurance:  fees:  fraud.
   Existing law generally regulates insurance institutions, agents,
and brokers.  Existing law prohibits insurers from engaging in
certain practices.
   This bill would require an insurer, after notice, to reimburse any
fees and extra premium charged to an insured due to a late premium
payment or a lapse in coverage under the policy if the late payment
or lapse in coverage was the result of fraud committed by a licensed
agent or broker and if specified events related to criminal or
administrative charges against the agent or broker have occurred.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 758.7 is added to the Insurance Code, to read:

   758.7.  An insurer, upon receiving notice from an insured, shall
reimburse any fees and extra premium charged to an insured due to a
late premium payment or a lapse in coverage under the policy if the
late payment or lapse in coverage was the result of fraud committed
by an agent or broker licensed pursuant to this code and one of the
following has occurred:
   (a) The agent or broker has been convicted of fraudulent activity
in court.
   (b) An administrative penalty has been imposed on the agent or
broker for fraudulent activity.
   (c) The agent or broker has been charged with fraud in court or in
an administrative action and has agreed to plead guilty to a lesser
charge for the fraudulent activity of which he or she is accused.