BILL NUMBER: AB 1906	ENROLLED
	BILL TEXT

	PASSED THE SENATE  AUGUST 13, 2008
	PASSED THE ASSEMBLY  MAY 28, 2008
	AMENDED IN ASSEMBLY  APRIL 22, 2008

INTRODUCED BY   Assembly Member Salas

                        FEBRUARY 7, 2008

   An act to amend Section 100 of, and to add Section 124.6 to, the
Insurance Code, relating to insurance.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1906, Salas. Insurance: identity theft.
   Existing law divides insurance in California into various classes,
including, among others, life, fire, marine, title, automobile, and
mortgage. Under existing law, a person is prohibited from transacting
any class of insurance without first procuring a certificate of
authority from the Insurance Commissioner admitting the insurer for
that class.
   This bill would add identity theft to the above list of insurance
classes. The bill would provide that identity theft insurance
includes insurance against costs associated with reestablishing
credit, reclaiming financial identity, and communicating with banks,
credit agencies, and other financial institutions, as specified. The
bill would also set forth related findings regarding identity theft.



   AB 1906, Salas. Insurance: identity theft.
   Existing law divides insurance in California into various classes,
including, among others, life, fire, marine, title, automobile, and
mortgage. Under existing law, a person is prohibited from transacting
any class of insurance without first procuring a certificate of
authority from the Insurance Commissioner admitting the insurer for
that class.
   This bill would add identity theft to the above list of insurance
classes. The bill would provide that identity theft insurance
includes insurance against costs associated with reestablishing
credit, reclaiming financial identity, and communicating with banks,
credit agencies, and other financial institutions, as specified. The
bill would also set forth related findings regarding identity theft.




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

  SECTION 1.  The Legislature finds and declares all of the
following:
   (a) Identity theft is one of the fastest growing financial crimes
in the United States. An estimated 9.9 million Americans fall victim
to identity theft each year.
   (b) Victims of identity theft come from all walks of life,
regardless of age, race, or sex.
   (c) The process of recovering from identity theft is long, costly,
and in many cases, very stressful. The Identity Theft Resource
Center reported in 2005, on average, an identity theft victim of a
new account and other fraud spent up to 60 hours resolving problems
brought on by identity theft, and those victims of existing accounts
spent an average of 15 hours resolving problems.
   (d) A 2003 Federal Trade Commission study found that identity
theft costs United States businesses nearly forty-eight billion
dollars ($48,000,000,000) annually and consumers an additional five
billion dollars ($5,000,000,000) per year.
   (e) The Federal Trade Commission has reported that identity theft
is the leading consumer fraud complaint tracked by law enforcement
agencies across the country.
   (f) In response to the growing consumer concern of identity theft,
a new type of insurance has been offered, called identity theft
insurance.
   (g) Identity theft insurance cannot protect an individual from
having their personal information stolen. The insurance typically
offers assistance to victims of identity theft to reestablish their
credit and cover the expenses associated with reclaiming financial
identity, ranging from long-distance phone calls to the cost of
hiring an attorney.
   (h) The number of companies offering identity theft insurance has
increased in the past several years.
   (i) In August 2007, the California Public Employees' Retirement
System (CalPERS) was victim to a data security breach and in response
to that incident, they purchased a one-year identity theft insurance
policy for all their customers subject to the breach. CalPERS plans
to do a followup study of customer satisfaction with the policy.
   (j) The increase in identity theft insurance policies and the
number of consumers purchasing these policies has raised the question
if current law is sufficient to protect consumers in their purchase
of identity theft insurance. California law does not have a direct
reference to identity theft insurance, and it is important that the
Department of Insurance has adequate oversight of this new product.
  SEC. 2.  Section 100 of the Insurance Code is amended to read:
   100.  Insurance in this state is divided into the following
classes:
   (a) Life.
   (b) Fire.
   (c) Marine.
   (d) Title.
   (e) Surety.
   (f) Disability.
   (g) Plate glass.
   (h) Liability.
   (i) Workers' compensation.
   (j) Common carrier liability.
   (k) Boiler and machinery.
   (l) Burglary.
   (m) Credit.
   (n) Sprinkler.
   (o) Team and vehicle.
   (p) Automobile.
   (q) Mortgage.
   (r) Aircraft.
   (s) Mortgage guaranty.
   (t) Insolvency.
   (u) Legal insurance.
   (v) Miscellaneous.
   (w) Identity theft.
  SEC. 3.  Section 124.6 is added to the Insurance Code, to read:
   124.6.  (a) Identity theft insurance includes insurance against
costs associated with reestablishing credit, reclaiming financial
identity, and communicating with banks, credit agencies, and other
financial institutions, which are directly associated with victims of
identity theft.
   (b) For purposes of this section, "identity theft" means the
unauthorized use of another person's personal identifying information
to obtain credit, goods, services, money, or property.

  SECTION 1.  The Legislature finds and declares all of the
following:
   (a) Identity theft is one of the fastest growing financial crimes
in the United States. An estimated 9.9 million Americans fall victim
to identity theft each year.
   (b) Victims of identity theft come from all walks of life,
regardless of age, race, or sex.
   (c) The process of recovering from identity theft is long, costly,
and in many cases, very stressful. The Identity Theft Resource
Center reported in 2005, on average, an identity theft victim of a
new account and other fraud spent up to 60 hours resolving problems
brought on by identity theft, and those victims of existing accounts
spent an average of 15 hours resolving problems.
   (d) A 2003 Federal Trade Commission study found that identity
theft costs United States businesses nearly forty-eight billion
dollars ($48,000,000,000) annually and consumers an additional five
billion dollars ($5,000,000,000) per year.
   (e) The Federal Trade Commission has reported that identity theft
is the leading consumer fraud complaint tracked by law enforcement
agencies across the country.
   (f) In response to the growing consumer concern of identity theft,
a new type of insurance has been offered, called identity theft
insurance.
   (g) Identity theft insurance cannot protect an individual from
having their personal information stolen. The insurance typically
offers assistance to victims of identity theft to reestablish their
credit and cover the expenses associated with reclaiming financial
identity, ranging from long-distance phone calls to the cost of
hiring an attorney.
   (h) The number of companies offering identity theft insurance has
increased in the past several years.
   (i) In August 2007, the California Public Employees' Retirement
System (CalPERS) was victim to a data security breach and in response
to that incident, they purchased a one-year identity theft insurance
policy for all their customers subject to the breach. CalPERS plans
to do a followup study of customer satisfaction with the policy.
   (j) The increase in identity theft insurance policies and the
number of consumers purchasing these policies has raised the question
if current law is sufficient to protect consumers in their purchase
of identity theft insurance. California law does not have a direct
reference to identity theft insurance, and it is important that the
Department of Insurance has adequate oversight of this new product.
  SEC. 2.  Section 100 of the Insurance Code is amended to read:
   100.  Insurance in this state is divided into the following
classes:
   (a) Life.
   (b) Fire.
   (c) Marine.
   (d) Title.
   (e) Surety.
   (f) Disability.
   (g) Plate glass.
   (h) Liability.
   (i) Workers' compensation.
   (j) Common carrier liability.
   (k) Boiler and machinery.
   (l) Burglary.
   (m) Credit.
   (n) Sprinkler.
   (o) Team and vehicle.
   (p) Automobile.
   (q) Mortgage.
   (r) Aircraft.
   (s) Mortgage guaranty.
   (t) Insolvency.
   (u) Legal insurance.
   (v) Miscellaneous.
   (w) Identity theft.
  SEC. 3.  Section 124.6 is added to the Insurance Code, to read:
   124.6.  (a) Identity theft insurance includes insurance against
costs associated with reestablishing credit, reclaiming financial
identity, and communicating with banks, credit agencies, and other
financial institutions, which are directly associated with victims of
identity theft.
   (b) For purposes of this section, "identity theft" means the
unauthorized use of another person's personal identifying information
to obtain credit, goods, services, money, or property.