BILL NUMBER: AB 1640 CHAPTERED 09/30/05 CHAPTER 433 FILED WITH SECRETARY OF STATE SEPTEMBER 30, 2005 APPROVED BY GOVERNOR SEPTEMBER 30, 2005 PASSED THE ASSEMBLY AUGUST 30, 2005 PASSED THE SENATE AUGUST 29, 2005 AMENDED IN SENATE AUGUST 22, 2005 AMENDED IN SENATE JULY 11, 2005 AMENDED IN ASSEMBLY MAY 2, 2005 INTRODUCED BY Assembly Member Saldana FEBRUARY 22, 2005 An act to amend Section 10103.5 of, and to add Section 791.28 to, the Insurance Code, relating to insurance claims information. LEGISLATIVE COUNSEL'S DIGEST AB 1640, Saldana Insurance claims information. Existing law generally regulates how insurers maintain information related to adverse underwriting decisions. This bill, as of July 1, 2006, would require any insurer who issues a policy of insurance covering residential property, if it reports claims history or loss experience to an insurance-support organization, to provide the insured, within a certain period, with a specified disclosure regarding contacting the claims information database, and to include the disclosure in the California Residential Property Insurance Bill of Rights. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 791.28 is added to the Insurance Code, to read: 791.28. (a) An insurer under a personal lines residential property insurance policy, if it reports the claims history or loss experience of insureds under those policies to an insurance-support organization, shall provide the insured with the following additional disclosure at the time that it provides the disclosure required pursuant to paragraph (1) of subdivision (b) of Section 790.034: "This insurer reports claim information to one or more claims information databases. The claim information is used to furnish loss history reports to insurers. If you are interested in obtaining a report from a claims information database, you may do so by contacting: (Insert the name, toll-free telephone number, and, if applicable, Internet Web site address of each claims information database to which the insurer reports the information covered by this section)" (b) This section shall become operative on July 1, 2006. SEC. 2. Section 10103.5 of the Insurance Code is amended to read: 10103.5. (a) Every California Residential Property Insurance Disclosure shall be accompanied by a California Residential Property Insurance Bill of Rights. If the insurer provides the insured with an electronic copy of a policy, the bill of rights may also be transmitted electronically. (b) The California Residential Property Insurance Bill of Rights shall be plainly printed in no less than 10-point type. The bill of rights shall contain the following: "California Residential Property Insurance Bill of Rights The largest single investment most consumers make is their home and related property. In order to best protect these assets, it is wise for consumers to understand the homeowner's insurance market. Consumers should consider the following: Read your policy carefully and understand the coverage and limits provided. Homeowner' s insurance policies contain sublimits for various coverages such as personal property, debris removal, additional living expense, detached fences, garages, etc. Keep accurate records of renovations and improvements to the structure of your home, as it could affect your need to increase your coverage. Maintaining a list of all personal property, pictures, and video equipment may help in the case of a loss. The list should be stored away from your home. Comparison shop for insurance, as not all policies are the same and coverage and prices vary. Take time to determine the cost to rebuild or replace your property in today's market. You can seek an independent evaluation of this cost. You may select a licensed contractor or vendor to repair, replace, or rebuild damaged property covered by the insurance policy. An agent or insurance company may help you establish policy limits that are adequate to rebuild your home. Once the policy is in force, contact your agent or insurance company immediately if you believe your policy limits may be inadequate. A consumer is entitled to receive information regarding homeowner's insurance. The following is a limited overview of information that your insurance company can provide: The California Residential Property Insurance Disclosure. An explanation of how your policy limits were established. The insurance company's customer service telephone number for underwriting, rating, and claims inquiries. An explanation for any cancellation or nonrenewal of your policy. A copy of your policy. The toll-free telephone number and Internet address for reporting complaints and concerns about homeowner's insurance issues to the department's consumer services unit. In the event of a claim, an itemized, written scope of loss report prepared by the insurer or its adjuster within a reasonable time period. In the event of a claim, notification of a consumer's rights with respect to the appraisal process for resolving claims disputes. In the event of a claim, a copy of the Unfair Practices Act and a copy of the Fair Claims Practices Regulations. The information provided herein is not all inclusive and does not negate or preempt existing California law. If you have any concerns or questions, the officers at our Consumer Hotline are there to help you. Please call them at 1-800-927-HELP (4357) or contact us at www.insurance.ca.gov." (c) (1) The bill of rights shall be distributed by all insurers licensed to sell residential property insurance in this state. (2) (A) If the insurer under a personal lines residential property insurance policy reports claims history or loss experience of insureds under those policies to an insurance-support organization, the insurer shall include the following disclosure in the California Residential Property Insurance Bill of Rights: "This insurer reports claim information to one or more claims information databases. The claim information is used to furnish loss history reports to insurers. If you are interested in obtaining a report from a claims information database, you may do so by contacting: (Insert the name, toll-free telephone number, and, if applicable, Internet Web site address of each claims information database to which the insurer reports the information covered by this section)" (B) This paragraph shall become operative on July 1, 2006.