BILL NUMBER: SB 20 CHAPTERED 09/30/05 CHAPTER 435 FILED WITH SECRETARY OF STATE SEPTEMBER 30, 2005 APPROVED BY GOVERNOR SEPTEMBER 30, 2005 PASSED THE SENATE SEPTEMBER 8, 2005 PASSED THE ASSEMBLY SEPTEMBER 7, 2005 AMENDED IN ASSEMBLY SEPTEMBER 2, 2005 AMENDED IN ASSEMBLY AUGUST 15, 2005 AMENDED IN ASSEMBLY JULY 13, 2005 AMENDED IN SENATE APRIL 18, 2005 AMENDED IN SENATE FEBRUARY 28, 2005 INTRODUCED BY Senator Escutia (Principal coauthor: Senator Speier) (Coauthors: Senators Alquist, Cedillo, Ducheny, and Kuehl) (Coauthors: Assembly Members Chu, Karnette, Koretz, Laird, Pavley, and Ruskin) DECEMBER 6, 2004 An act to amend Sections 11629.7, 11629.71, 11629.72, 11629.73, 11629.731, 11629.74, 11629.75, 11629.76, 11629.77, 11629.78, 11629.79, 11629.8, 11629.81, 11629.84, and 11629.85 of, to amend the heading of Article 5.5 (commencing with Section 11629.7) of, and to repeal Article 5.6 (commencing with Section 11629.9) of Chapter 1 of Part 3 of Division 2 of, the Insurance Code, and to amend Sections 4000.37, 4000.38, 16020.1, 16020.2, and 16056.1 of the Vehicle Code, relating to auto insurance. LEGISLATIVE COUNSEL'S DIGEST SB 20, Escutia Auto insurance: low-cost policies: evidence of financial responsibility. Existing law establishes, until January 1, 2007, a low-cost automobile insurance pilot program in the County of Los Angeles and the City and County of San Francisco. Existing law provides for the issuance of automobile liability policies pursuant to this program under specified terms and conditions, and provides that a policy so issued satisfies specified requirements regarding financial responsibility. This bill would eliminate the expiration date for these provisions. The bill would, as of April 1, 2006, extend the low-cost automobile program to the Counties of Alameda, Fresno, Orange, Riverside, San Bernardino, and San Diego and would make expansion to all other counties in California subject to a determination of need made by the Insurance Commissioner following a public meeting, as specified. It would require the commissioner to establish the annual rate offered initially under the program for these counties, and to adopt regulations to extend the program to other counties. The bill would make certain other changes to the provisions governing the program, including raising the cap on the vehicle value that can be insured under this program from $12,000 to $20,000 and specifying only 2 policies per person may be purchased under this program. Existing law requires the Department of Motor Vehicles to require each applicant for renewal of a motor vehicle registration to submit either a form approved by the department, but issued by the insurer, containing specified information, or any one of specified documents as evidence of coverage under an alternative form of financial responsibility that may be provided by the applicant in compliance with existing financial responsibility laws. Under existing law, on and after January 1, 2007, this requirement is made inapplicable to a vehicle owner with a residence address in the County of Los Angeles or in the City and County of San Francisco. Existing law also makes inapplicable on or after that date, with respect to persons in those 2 jurisdictions, a related evidence of financial responsibility requirement involving providing that information to a peace officer. This bill would change the date, making the requirements regarding evidence of financial responsibility inapplicable on or after January 1, 2011, in the County of Los Angeles and in the City and County of San Francisco. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. The heading of Article 5.5 (commencing with Section 11629.7) of Chapter 1 of Part 3 of Division 2 of the Insurance Code is amended to read: Article 5.5. California Low-Cost Automobile Insurance Program SEC. 2. Section 11629.7 of the Insurance Code is amended to read: 11629.7. (a) There is established, within the California Automobile Assigned Risk Plan established under Section 11620, a low-cost automobile insurance program for all counties in California. (b) For the purpose of making the low-cost automobile insurance program operational in all counties of California, pursuant to subdivision (a), a low-cost automobile insurance program shall commence operations in the Counties of Alameda, Fresno, Orange, Riverside, San Bernardino, and San Diego, effective April 1, 2006, and shall be made operational in all other counties of California based upon a determination of need made by the commissioner. Program outreach shall focus primarily on those counties which have the highest number of uninsured drivers or the highest percentage of uninsured drivers or the highest percentage of low-income individuals. In making the determination of need for each county, the commissioner shall consider each of the following: (1) The number or percentage of motorists within the county who are uninsured. (2) The number or percentage of residents within the county who are low income. (3) The availability of affordable automobile insurance options for the county's low-income residents within the private automobile insurance marketplace. (c) (1) After making the initial determination of need, the commissioner shall, as soon as is practicable, hold a public meeting in that county. (2) The public meeting required by paragraph (1) shall be held not for the consideration of rates, but for the public discussion of the need and desirability of the program for the consumers of the county. Within 30 days after the public meeting, the commissioner shall make public his or her final determination of whether a need for the program exists within the county. A separate hearing shall be held for the consideration of rates pursuant to Section 11629.72. (d) The commissioner, after a public hearing, shall approve or issue a reasonable plan for the equitable apportionment, among insurers required to participate in the California Automobile Assigned Risk Plan established under Section 11620, of persons residing in the counties or cities and counties set forth in subdivisions (a) and (b) who are eligible to purchase through the program established in each county or city and county a low-cost automobile insurance policy, as described in Section 11629.71. The program shall be conducted in conjunction with the California Automobile Assigned Risk Plan established under Section 11620. SEC. 3. Section 11629.71 of the Insurance Code is amended to read: 11629.71. A low-cost automobile insurance policy for purposes of the program established under this article shall have all of the following attributes: (a) The policy shall offer coverage in the amount of ten thousand dollars ($10,000) for bodily injury to, or death of, each person as a result of any one accident and, subject to that limit as to one person, the amount of twenty thousand dollars ($20,000) for bodily injury to, or death of all persons as a result of any one accident, and the amount of three thousand dollars ($3,000) for damage to property of others as a result of any one accident. (b) The coverage required by Section 11580.2 shall be made available to the consumer. However, an insurer may charge a premium for that coverage in addition to the premium set forth in Section 11629.72. Notwithstanding the coverage amounts required by Section 11580.2 and Section 16056 of the Vehicle Code, uninsured motorist coverage issued in conjunction with a low-cost automobile policy under the program, with coverage limits at least equal to the limits of liability in the underlying low-cost automobile policy, shall satisfy the requirements of Section 11580.2 and the financial responsibility requirements of Sections 4000.37, 16021, and 16431 of the Vehicle Code. (c) Medical payments coverage shall be made available to the consumer. However, an insurer may charge a premium for that coverage in addition to the premium set forth in Section 11629.72. (d) The policy shall have an initial term of one year, renewable on an annual basis thereafter. (e) The policy shall cover the person named in the policy, and to the same extent that insurance is provided to the named insured, any other person using the automobile, provided the use is with his or her permission, express or implied, and within the scope of that permission, except that the policy shall not cover members of the named insured's household who do not satisfy the requirements of subdivisions (b) to (e), inclusive, of Section 11629.73. (f) The policy shall provide coverage for an automobile with a value, at the time of purchase by the insured, of twenty thousand dollars ($20,000) or less, as evidenced by the value given to the automobile by the Department of Motor Vehicles in assessing vehicle license fees. SEC. 4. Section 11629.72 of the Insurance Code is amended to read: 11629.72. (a) Effective March 1, 2003, the annual rate offered under the program for the low-cost automobile policy, unless and until the time that the rate is adjusted, shall be three hundred forty-seven dollars ($347) per covered vehicle for the County of Los Angeles and three hundred fourteen dollars ($314) per covered vehicle for the City and County of San Francisco, unless the commissioner establishes that rate or a different rate prior to that time. The annual rate offered initially under the program for each of the Counties of Alameda, Fresno, Orange, Riverside, San Bernardino, and San Diego shall be established by the commissioner no later than April 1, 2006. The annual rate offered initially under the program for each of the other counties in California shall be established at a date according to the discretion of the commissioner. A surcharge, as a percentage of the base rate, shall be added to the base rate and that percentage shall be set at the discretion of the commissioner, if the named insured is an unmarried male between the ages of 19 and 24, inclusive, or if an unmarried male between the ages of 19 and 24, inclusive, resides in the household of the named insured and will be a driver of the automobile covered under the low-cost policy. (b) In addition to existing premium installment options offered by the California Automobile Assigned Risk Plan under Article 4 (commencing with Section 11620), the plan shall also make available to an insured under the program a premium installment option pursuant to which an insured is required to pay not more than 15 percent of the total policy cost upon issuance of the low-cost policy, followed thereafter by six other payments. No other premium financing arrangement shall be permitted. (c) Rates for policies issued under the program in each county or city and county shall be reviewed and revised as follows: (1) Rates shall be sufficient to cover (A) losses incurred under policies issued under the program, and (B) expenses, including, but not limited to, all reasonable and necessary expenses such as the costs of administration, underwriting, taxes, commissions, and claims adjusting, that are incurred due to participation in the program. For purposes of this paragraph, "losses incurred" means claims paid, claims incurred and reported, and claims incurred but not yet reported. In assessing loss reserves, the commissioner shall only allow loss reserves that are estimated from actual losses in the program or comparable data by a licensed statistical agent, as adjusted to reflect coverage provided under the program. (2) Rates shall be set so as to result in no projected subsidy of the program by those policyholders of insurers issuing policies under the program who are not participants in the program. (3) Rates shall be set with respect to the program so as to result in no projected subsidy by policyholders in one county of policyholders in any of the other counties. (4) Commencing on January 1, 2001, and annually thereafter, the California Automobile Assigned Risk Plan shall submit the loss and expense data, together with a proposed rate and the surcharge authorized by subdivision (a) for the low-cost automobile policy for the program, to the commissioner for approval in accordance with this chapter. The commissioner shall act on the recommendation within 90 days. SEC. 5. Section 11629.73 of the Insurance Code is amended to read: 11629.73. A low-cost automobile insurance policy under the program shall only be available for purchase by persons who satisfy the following eligibility requirements: (a) The person shall be in a household with a gross annual household income that does not exceed 250 percent of the federal poverty level, as defined in Part 6.2 (commencing with Section 12693) or as defined in an equivalent manner that is approved by the commissioner. (b) The person shall be no less than 19 years of age and have been continuously licensed to drive an automobile for the previous three years. (c) The person shall have not more than one of either, but not both, of the following within the previous three years: (1) A property damage only accident in which the driver was principally at fault. (2) A point for a moving violation. (d) The person shall not have on record within the previous three years, an at-fault accident involving bodily injury or death. (e) The person shall not have a felony or misdemeanor conviction for a violation of the Vehicle Code on his or her motor vehicle record. (f) The person shall not be a college student claimed as a dependent of another person for federal or state income tax purposes. SEC. 6. Section 11629.731 of the Insurance Code is amended to read: 11629.731. A person who meets the requirements of subdivision (a) of Section 11629.73, and who claims that he or she meets the requirements of subdivisions (b) to (e), inclusive, of Section 11629.73 based entirely or partially on a driver's license and driving experience obtained other than in the United States or Canada, shall be entitled to a rebuttable presumption that he or she is qualified to purchase a low-cost automobile insurance policy under the program if he or she has been licensed to drive pursuant to a license obtained in the United States or Canada for at least the previous 18 months and meets the criteria of subdivisions (b) to (e), inclusive, for that period. SEC. 7. Section 11629.74 of the Insurance Code is amended to read: 11629.74. (a) Application may be made through any producer certified by the plan. The applicant, in order to demonstrate financial eligibility to purchase a low-cost automobile insurance policy under the program, shall present at the time of applying for the policy, a copy of the applicant's federal or state income tax return for the previous year or other reliable evidence from a governmental agency or governmental means-tested program of the applicant's gross annual household income, pursuant to regulations issued under subdivision (b) of Section 11629.79. (b) The applicant shall certify that the representations made in the documents submitted as proof of financial eligibility and in the application for the policy are true, correct, and contain no material misrepresentations or omissions of fact to the best knowledge and belief of the applicant. (c) The certified producer shall forward the application, supporting documents, and the applicant's certification to the California Automobile Assigned Risk Plan. SEC. 8. Section 11629.75 of the Insurance Code is amended to read: 11629.75. (a) A certified producer shall provide to an applicant for a low-cost automobile insurance policy under this article a notice relating to coverage under the policy. The notice shall be provided in a separate document at the time of application, and include the following statement in 14-point boldface type: "NOTICE INSURANCE COVERAGE PROVIDED IN THE POLICY YOU ARE BUYING CONTAINS REDUCED LIABILITY COVERAGE FOR PERSONAL INJURIES OR PROPERTY DAMAGE RESULTING FROM THE OPERATION OF THE INSURED VEHICLE. IF LOSSES FROM AN AUTOMOBILE ACCIDENT EXCEED THE COVERAGE PROVIDED BY THIS POLICY, YOU CAN BE HELD PERSONALLY LIABLE AND RESPONSIBLE FOR THOSE LOSSES. THIS POLICY PROVIDES LIABILITY COVERAGE FOR INJURIES OR DEATH CAUSED TO OTHER PERSONS IN THE TOTAL AMOUNT OF TEN THOUSAND DOLLARS ($10,000) PER PERSON IN ANY ONE ACCIDENT, AND UP TO A TOTAL AMOUNT OF TWENTY THOUSAND DOLLARS ($20,000) FOR ALL PERSONS IN ANY ONE ACCIDENT. THE POLICY ALSO PROVIDES UP TO A TOTAL AMOUNT OF THREE THOUSAND DOLLARS ($3,000) IN LIABILITY COVERAGE FOR PROPERTY DAMAGE IN ANY ONE ACCIDENT. IF YOU WANT MORE INSURANCE COVERAGE, YOU MUST REQUEST A DIFFERENT POLICY. THIS POLICY ALSO DOES NOT COVER DAMAGE TO YOUR OWN VEHICLE, LOSSES RESULTING FROM YOUR BODILY INJURY OR DEATH, OR COVERAGE FOR LOSSES CAUSED BY AN UNINSURED OR UNDERINSURED DRIVER. HOWEVER, THESE OTHER COVERAGES MAY BE AVAILABLE AT EXTRA COST THROUGH OTHER INSURERS. THIS POLICY MAY ALSO CONTAIN UNINSURED MOTORIST BODILY INJURY COVERAGE IN THE TOTAL AMOUNT OF TEN THOUSAND DOLLARS ($10,000) PER PERSON IN ANY ONE ACCIDENT AND UP TO A TOTAL AMOUNT OF TWENTY THOUSAND DOLLARS ($20,000) FOR ALL PERSONS IN ANY ONE ACCIDENT, IF YOU SO CHOOSE. IN ADDITION, THIS POLICY MAY ALSO CONTAIN MEDICAL PAYMENTS COVERAGE IN THE AMOUNT OF ONE THOUSAND DOLLARS ($1,000) PER PERSON IN ANY ONE ACCIDENT, IF YOU SO CHOOSE. THIS POLICY DOES NOT COVER ANY OTHER DRIVER IN YOUR HOUSEHOLD WHO: (a) IS UNDER 19 YEARS OF AGE; OR (b) HAS LESS THAN 3 YEARS OF CONTINUOUSLY LICENSED DRIVING EXPERIENCE; OR (c) HAS MORE THAN ONE OF EITHER, OR BOTH, OF THE FOLLOWING: --A PROPERTY DAMAGE ONLY ACCIDENT IN WHICH THE DRIVER WAS PRINCIPALLY AT FAULT. --A POINT FOR A MOVING VIOLATION; OR (d) HAS IN THE PREVIOUS 3 YEARS AN AT-FAULT ACCIDENT INVOLVING BODILY INJURY OR DEATH; OR (e) HAS A FELONY OR MISDEMEANOR CONVICTION FROM A VIOLATION OF THE VEHICLE CODE ON HIS OR HER MOTOR VEHICLE RECORD." (b) When the certified producer establishes delivery of the disclosure form specified in subdivision (a) by obtaining the signature of the applicant or insured, there shall be a conclusive presumption that the certified producer has complied with the disclosure requirements of this section. SEC. 9. Section 11629.76 of the Insurance Code is amended to read: 11629.76. (a) For a low-cost automobile insurance policy issued pursuant to the program, certified producers shall be entitled to the same commission rate as is paid by the California Automobile Assigned Risk Plan for private passenger, nonfleet risks under Article 4 (commencing with Section 11620). (b) Notwithstanding subdivision (a), the commissioner may at any time establish a commission for a low-cost automobile insurance policy issued pursuant to the program and may make the commission effective on any policy originated within an entire year, or any portion of a year, as is needed to provide an incentive to certified producers to sell low-cost automobile insurance to eligible applicants. The commissioner shall not establish a commission pursuant to this subdivision if the commissioner determines that setting the commission rate will result in a lower commission percentage than would exist pursuant to subdivision (a). (c) No other fees of any kind may be charged or collected pursuant to this section and the sale of a low-cost policy under this article shall not be conditioned on the purchase of any other product or service. SEC. 10. Section 11629.77 of the Insurance Code is amended to read: 11629.77. (a) A low-cost automobile insurance policy issued pursuant to the program shall be canceled only for the following reasons: (1) Nonpayment of premium. (2) Fraud or material misrepresentation affecting the policy or the insured. (3) The purchase of additional automobile liability insurance coverage in violation of subdivision (a) of Section 11629.78. (4) The purchase or maintenance of automobile liability insurance coverage other than a low-cost policy for any additional vehicles in the insured's household, in violation of subdivision (b) of Section 11629.78. (b) A policy shall be nonrenewed only for the following reasons: (1) A substantial increase in the hazard insured against. (2) The insured no longer meets the applicable eligibility requirements. In this regard, the eligibility of an insured shall be recertified by the California Automobile Assigned Risk Plan after the first year of eligibility, and annually thereafter by the insurer that issued the policy. SEC. 11. Section 11629.78 of the Insurance Code is amended to read: 11629.78. (a) An insured under the program shall not purchase automobile liability insurance coverage that is in addition to the liability coverage provided by the low-cost policy. However, the insured may purchase any other additional type of automobile insurance coverage, such as uninsured motorist coverage or collision coverage outside the plan. (b) An insured under the program shall not purchase or maintain any automobile liability insurance coverage other than a low-cost policy for any additional vehicles in the insured's household. (c) No more than two low-cost policies per person are permitted. SEC. 12. Section 11629.79 of the Insurance Code is amended to read: 11629.79. (a) The program for the County of Los Angeles and the City and County of San Francisco is authorized to commence operations on January 1, 2000, but shall be fully operational no later than July 1, 2000. (b) To this end, the commissioner, in consultation with the California Automobile Assigned Risk Plan, shall adopt regulations to implement the provisions of this article within 60 days of its effective date. The regulations shall be adopted as emergency regulations in accordance with Chapter 3.5 (commencing with Section 11340) of the Government Code, and for purposes of that chapter, the adoption of the regulations shall be considered by the Office of Administrative Law to be necessary for the immediate preservation of the public peace, health and safety, and general welfare. (c) The program for the Counties of Alameda, Fresno, Orange, Riverside, San Bernardino, and San Diego shall commence operations on April 1, 2006, and shall be made operational in all other counties of California according to the discretion of the commissioner. The commissioner, in consultation with the California Automobile Assigned Risk Plan, shall adopt regulations to implement the expansion of the program to these counties. The regulations shall be adopted as emergency regulations in accordance with Chapter 3.5 (commencing with Section 11340) of the Government Code, and for purposes of that chapter, the adoption of the regulations shall be considered by the Office of Administrative Law to be necessary for the immediate preservation of the public peace, health and safety, and general welfare. SEC. 13. Section 11629.8 of the Insurance Code is amended to read: 11629.8. Notwithstanding the coverage amounts required by Section 16056 of the Vehicle Code, a low-cost automobile policy issued under the program shall satisfy the financial responsibility requirements of Sections 4000.37, 16021, and 16431 of the Vehicle Code. SEC. 14. Section 11629.81 of the Insurance Code is amended to read: 11629.81. The California Automobile Assigned Risk Plan shall report to the Legislature on an annual basis, commencing January 1, 2001, and at those additional times as it deems prudent, on the status of the program. SEC. 15. Section 11629.84 of the Insurance Code is amended to read: 11629.84. This article shall remain in effect only until January 1, 2011, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2011, deletes or extends that date. SEC. 16. Section 11629.85 of the Insurance Code is amended to read: 11629.85. (a) On or before February 1 of each year, the commissioner shall prepare and propose a plan to the Senate and Assembly Committees on Insurance setting forth the methods the commissioner intends to implement to inform households eligible for the program about the availability of low-cost automobile insurance. To be eligible for funding through the budget process, the plan shall be reviewed by the Senate and Assembly Committees on Insurance. The information required under subdivision (c) shall also be provided to the Senate and Assembly Committees on Transportation. (b) The plan shall include, at a minimum, a brief description of methods proposed to be used, anticipated costs, sources of revenue, goals, targets, objectives, and a justification of the proposed methods. The plan shall also explain how the department proposes to work in cooperation with the California Automobile Assigned Risk Plan, the social service departments of the Counties of Los Angeles and San Francisco, the Department of Motor Vehicles, and community-based organizations in order to inform eligible households of the existence of the program. (c) The plan shall also include all of the following: (1) The commissioner's determination regarding whether the program has been successful, based on the criteria specified in subdivision (d), and an explanation regarding that success or lack thereof. (2) Structural characteristics of the program that may require statutory revision in order for the program to succeed or to improve upon existing success. (3) Impediments to success of the program that can reasonably be overcome by revision to the strategies adopted by the department. (4) Administrative costs incurred by the low-cost automobile insurance program and participants in the program. (d) The program is successful if the following occur: (1) The program generated sufficient premiums to cover losses incurred under policies issued under the program, and expenses incurred by the program. (2) The program served the public purpose of offering access to automobile insurance to otherwise underserved communities in the program areas. (3) The program offered access to automobile insurance to previously uninsured motorists seeking affordable coverage in the program areas. (e) Any written or oral advertisements, including, but not limited to, paid or unpaid commercial or noncommercial advertising, by the department with reference to the low-cost automobile insurance program shall reference the department and shall not reference the commissioner by name or office, or include the commissioner's voice, image, or likeness. The department shall not participate with any nongovernmental entity that produces or intends to produce advertisements or educational material that include the name of the commissioner or his or her voice, image or likeness, and that are intended to make eligible households aware of the existence of low-cost automobile insurance. SEC. 17. Article 5.6 (commencing with Section 11629.9) of Chapter 1 of Part 3 of Division 2 of the Insurance Code is repealed. SEC. 18. Section 4000.37 of the Vehicle Code is amended to read: 4000.37. (a) Upon application for renewal of registration of a motor vehicle, the department shall require that the applicant submit either a form approved by the department, but issued by the insurer, as specified in paragraph (1), (2), or (3), or any of the items specified in paragraph (4), as evidence that the applicant is in compliance with the financial responsibility laws of this state. (1) For vehicles covered by private passenger automobile liability policies and having coverage as described in subdivisions (a) and (b) of Section 660 of the Insurance Code, or policies and coverages for private passenger automobile policies as described in subdivisions (a) and (b) of that section and issued by an automobile assigned risk plan, the form shall include all of the following: (A) The primary name of the insured covered by the policy or the vehicle owner, or both. (B) The year, make, and vehicle identification number of the vehicle. (C) The name, the National Association of Insurance Commissioners (NAIC) number, and the address of the insurance company or surety company providing a policy or bond for the vehicle. (D) The policy or bond number, and the effective date and expiration date of that policy or bond. (E) A statement from the insurance company or surety company that the policy or bond meets the requirements of Section 16056 or 16500.5. For the purposes of this section, policies described in Section 11629.71 of the Insurance Code are deemed to meet the requirements of Section 16056. (2) For vehicles covered by commercial or fleet policies, and not private passenger automobile liability policies, as described in paragraph (1), the form shall include all of the following: (A) The name and address of the vehicle owner or fleet operator. (B) The name, the NAIC number, and the address of the insurance company or surety company providing a policy or bond for the vehicle. (C) The policy or bond number, and the effective date and expiration date of the policy or bond. (D) A statement from the insurance company or surety company that the policy or bond meets the requirements of Section 16056 or 16500.5 and is a commercial or fleet policy. For vehicles registered pursuant to Article 9.5 (commencing with Section 5301) or Article 4 (commencing with Section 8050) of Chapter 4, one form may be submitted per fleet as specified by the department. (3) (A) The director may authorize an insurer to issue a form that does not conform to paragraph (1) or (2) if the director does all of the following: (i) Determines that the entity issuing the alternate form is or will begin reporting the insurance information required under paragraph (1) or (2) to the department through electronic transmission. (ii) Determines that use of the alternate form furthers the interests of the state by enhancing the enforcement of the state's financial responsibility laws. (iii) Approves the contents of the alternate form as providing an adequate means for persons to prove compliance with the financial responsibility laws. (B) The director may authorize the use of the alternate form in lieu of the forms otherwise required under paragraph (1) or (2) for a period of four years or less and may renew that authority for additional periods of four years or less. (4) In lieu of evidence of insurance as described in paragraphs (1), (2), and (3), one of the following documents as evidence of coverage under an alternative form of financial responsibility may be provided by the applicant: (A) An evidence form, as specified by the department, that indicates either a certificate of self-insurance or an assignment of deposit letter has been issued by the department pursuant to Sections 16053 or 16054.2. (B) An insurance covering note or binder pursuant to Section 382 or 382.5 of the Insurance Code. (C) An evidence form that indicates coverage is provided by a charitable risk pool operating under Section 5005.1 of the Corporations Code, if the registered owner of the vehicle is a nonprofit organization that is exempt from taxation under paragraph (3) of subsection (c) of Section 501 of the United States Internal Revenue Code. The evidence form shall include: (i) The name and address of the vehicle owner or fleet operator. (ii) The name and address of the charitable risk pool providing the policy for the vehicle. (iii) The policy number, and the effective date and expiration date of the policy. (iv) A statement from the charitable risk pool that the policy meets the requirements of subdivision (b) of Section 16054.2. (b) This section does not apply to any of the following: (1) A vehicle for which a certification has been filed pursuant to Section 4604, until the vehicle is registered for operation upon the highway. (2) A vehicle that is owned or leased by, or under the direction of, the United States or any public entity that is included in Section 811.2 of the Government Code. (3) A vehicle registration renewal application where there is a change of registered owner. (4) A vehicle for which evidence of liability insurance information has been electronically filed with the department. SEC. 19. Section 4000.38 of the Vehicle Code, as added by Section 3 of Chapter 920 of the Statutes of 2004, is amended to read: 4000.38. (a) The department shall suspend, cancel, or revoke the registration of a vehicle when it determines that any of the following circumstances has occurred: (1) The registration was obtained by providing false evidence of financial responsibility to the department. (2) Upon notification by an insurance company that the required coverage has been canceled and a sufficient period of time has elapsed since the cancellation notification, as determined by the department, for replacement coverage to be processed and received by the department. (3) Evidence of financial responsibility has not been submitted to the department within 30 days of the issuance of a registration certificate for the original registration or transfer of registration of a vehicle. (b) (1) Prior to suspending, canceling, or revoking the registration of a vehicle, the department shall notify the vehicle owner of its intent to suspend, cancel, or revoke the registration, and shall provide the vehicle owner a reasonable time, not less than 45 days in cases under paragraph (2) of subdivision (a), to provide evidence of financial responsibility or to establish that the vehicle is not being operated. (2) For the low-cost automobile insurance program established under Section 11629.7 of the Insurance Code, the department shall provide residents with information on the notification document, in plain, bold type not less than 12 point in size, and in both English and Spanish, stating the following: "A program offering affordable automobile insurance to low-income households has been established. To determine if you are eligible for this insurance, call (insert toll-free phone number for the California Automobile Assigned Risk Plan or its successor). This call is free to you and may be made during normal business hours, Monday through Friday, except holidays." (c) Notwithstanding any other provision of this code, before a registration is reinstated after suspension, cancellation, or revocation, there shall be paid to the department, in addition to any other fees required by this code, a fee sufficient to pay the cost of the reissuance as determined by the department. (d) This section shall become operative on January 1, 2006. SEC. 20. Section 16020.1 of the Vehicle Code is amended to read: 16020.1. (a) On and after January 1, 2011, Section 4000.37 does not apply to vehicle owners with a residence address in the County of Los Angeles at the time of registration renewal. (b) On and after January 1, 2011, subdivisions (a) and (b) of Section 16028 do not apply to a person who drives a motor vehicle upon a highway in the County of Los Angeles. SEC. 21. Section 16020.2 of the Vehicle Code is amended to read: 16020.2. (a) On and after January 1, 2011, Section 4000.37 does not apply to vehicle owners with a residence address in the City and County of San Francisco at the time of registration renewal. (b) On and after January 1, 2011, subdivisions (a) and (b) of Section 16028 do not apply to a person who drives a motor vehicle upon a highway in the City and County of San Francisco. SEC. 22. Section 16056.1 of the Vehicle Code is amended to read: 16056.1. Notwithstanding the coverage limits specified in Section 16056, an automobile insurance policy described in Section 11629.71 of the Insurance Code shall be effective under Section 16054 when issued by an insurance company admitted to do business in this state by the Insurance Commissioner and the policy is subject, if the accident has resulted in bodily injury or death, to a limit, exclusive of interest and costs, of not less than ten thousand dollars ($10,000) because of bodily injury to or death of one person in any one accident and, subject to that limit for one person, to a limit of not less than twenty thousand dollars ($20,000) because of bodily injury to or death of two or more persons in any one accident, and if the accident has resulted in injury to, or destruction of property, to a limit of not less than three thousand dollars ($3,000) because of injury to or destruction of property of others in any one accident.