BILL NUMBER: AB 1597	CHAPTERED
	BILL TEXT

	CHAPTER  234
	FILED WITH SECRETARY OF STATE  SEPTEMBER 24, 2010
	APPROVED BY GOVERNOR  SEPTEMBER 23, 2010
	PASSED THE SENATE  AUGUST 11, 2010
	PASSED THE ASSEMBLY  MAY 13, 2010
	AMENDED IN ASSEMBLY  APRIL 13, 2010
	AMENDED IN ASSEMBLY  MARCH 8, 2010

INTRODUCED BY   Assembly Member Jones
   (Coauthors: Assembly Members Blumenfield, Conway, Coto, Nielsen,
Portantino, Salas, Skinner, and Torres)
   (Coauthors: Senators Denham, DeSaulnier, and Wiggins)

                        JANUARY 4, 2010

   An act to amend Sections 11620, 11622.5, 11629.81, 11629.84, and
11629.85 of the Insurance Code, and to amend Sections 16020.1 and
16020.2 of the Vehicle Code, relating to automobile insurance.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1597, Jones. Automobile insurance: assigned risk plans:
low-cost automobile insurance.
   (1) Existing law provides for the formation of the California
Automobile Assigned Risk Plan for automobile bodily injury and
property damage liability insurance.
   The Insurance Commissioner, after a public hearing, is required to
approve or issue a reasonable plan for the equitable apportionment,
among insurers admitted to transact liability insurance, of those
applicants for automobile bodily injury and property damage liability
insurance who are, in good faith, entitled to but are unable to
procure that insurance through ordinary methods. Notice of the public
hearing is required to be published at least 60 days prior to the
hearing or close of the public comment period on the adoption,
amendment, or repeal of a regulation, in 2 newspapers of general
circulation, one published in the City and County of San Francisco,
and the other published in the City of Los Angeles.
   This bill would delete the notice requirement, and require that
the hearings be conducted in accordance with the Administrative
Procedure Act.
   Existing law requires the assigned risk plan to provide for
effective dates of coverage, consistent with the required elements,
including execution of the application forms and an electronic
effective date procedure established by the plan. The insurance
application form is also required to include a disclosure regarding
the effective date of coverage.
   This bill would modify the notice and the effective dates of
coverage requirements, as provided.
   (2) Existing law establishes, within the California Automobile
Assigned Risk Plan, a low-cost automobile insurance program. Existing
law establishes the low-cost automobile insurance program in several
specified counties and makes the expansion to all other counties in
California subject to a determination of need made by the
commissioner following a public meeting, as specified. 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. Existing law provides that the low-cost
automobile insurance program shall remain in effect only until
January 1, 2011.
    This bill would provide that the low-cost automobile insurance
program would remain in effect until January 1, 2016.
   Existing law requires the commissioner, on or before March 1 of
each year, to prepare and propose a plan to the Senate Committee on
Banking, Finance, and Insurance and the Assembly Committee 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. The plan is required
to contain specified information, including the most recent annual
report to the Legislature on the status of the low-cost automobile
insurance program from the California Automobile Assigned Risk Plan.
   This bill would delete the most recent annual report to the
Legislature on the status of the low-cost automobile insurance
program from the California Automobile Assigned Risk Plan from the
information required to be contained in the plan.
   (3) Existing law, on and after January 1, 2011, makes certain
automobile insurance proof of financial responsibility requirements
no longer applicable to people in the County of Los Angeles and the
City and County of San Francisco.
   This bill would extend the repeal date to January 1, 2016.
   (4) This bill would make conforming changes and delete obsolete
provisions.



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

  SECTION 1.  Section 11620 of the Insurance Code is amended to read:

   11620.  (a) The commissioner, after a public hearing, shall
approve or issue a reasonable plan for the equitable apportionment,
among insurers admitted to transact liability insurance, of those
applicants for automobile bodily injury and property damage liability
insurance who are in good faith entitled to but are unable to
procure that insurance through ordinary methods. The commissioner
shall require the payment of five hundred ninety dollars ($590), in
advance, as a fee for the filing of amendments to the plan with the
commissioner. The commissioner may approve or issue reasonable
amendments to the plan if he or she first holds a public hearing to
determine whether the amendments are in keeping with the intent and
purpose of this section. All such insurers shall subscribe to the
plan and its amendments and participate in the plan.
   (b) Judicial review of rate revision proceedings shall be in
accordance with Section 1858.6.
   (c) Public hearings held pursuant to this section shall be
conducted in accordance with the rulemaking provisions of the
Administrative Procedure Act (Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code).
  SEC. 2.  Section 11622.5 of the Insurance Code is amended to read:
   11622.5.  The plan shall provide for effective dates for coverage
consistent with all of the following:
   (a) Except as provided in this section, in no event shall coverage
be effective prior to the date and time of execution of the
application forms. Postage meter or United States Postal Service
postmarks shall not be recognized by the plan as establishing
effective dates.
   (b) (1) When the applicant requires that coverage be effective
immediately, the effective date and time shall be established using
an electronic effective date procedure established by the plan. The
plan shall establish a future effective date using the electronic
effective date procedure. The future effective date option shall be
available upon request by an applicant. An applicant may request a
future effective date of 45 days or less from the date of application
completion.
   (2) The manager of the plan shall ensure access at no cost to the
user as part of the electronic effective date procedure. The manager
shall maintain sufficient capacity to service, in a timely manner,
applications received by means of the electronic effective date
procedure.
   (3) The electronic effective date procedure shall be available
only to producers of record who are certified by the plan and shall
include a procedure to prevent fraudulent applications.
   (4) A producer of record shall have a duty to comply with the
requirements of this section within 24 hours of the date and time the
application is completed and executed.
   (c) Coverage for vehicles shall become effective at the date and
time the application is transmitted through the plan's electronic
effective date procedure if and only if all of the following
requirements are met:
   (1) The producer of record and the applicant certify under penalty
of perjury on the application the date and time that the application
forms were completed and executed.
   (2) The producer of record uses the electronic effective date
procedure adopted pursuant to subdivision (b).
   (3) The application forms and required deposit are submitted to
the plan manager no later than two working days following the date
the application forms are completed and executed. The submission date
is established in accordance with the procedure established by the
plan.
   (d) If the application is made without using the electronic
effective date procedure or if there is not compliance with the
provisions of subdivision (c), coverage shall be effective in
accordance with an alternative procedure established by the plan, but
not later than 12:01 a.m. on the date following receipt of the
application in the plan office unless a later date is requested.
   (e) If the applicant desires coverage on a date later than that
which would otherwise be fixed pursuant to this section, the
applicant shall indicate that date and the plan manager shall fix the
effective date of coverage as of 12:01 a.m. on the desired date of
coverage. However, no date shall be later than 45 days after the date
of application.
   (f) The effective date for coverage for an additional vehicle to
be added to an in-force policy or for other coverage to be added to
an in-force policy shall not be subject to the requirements of this
section, but shall be governed by the terms of the policy and other
applicable laws and regulations.
   (g) In order to provide evidence of a requested effective date,
the plan shall establish a procedure for the maintenance of
appropriate records of all risks for which the producer of record has
designated the time and date of coverage.
   (h) Where the plan's electronic effective date procedure is
disrupted due to failure of transmission or receiving equipment due
to fire, earthquake, explosion, civil unrest, or similar disaster or
emergency, the producer of record may bind coverage up to one day
prior to the time the application forms and required deposit are
mailed to the plan manager, as established by the United States
Postal Service postmark on the envelope in which the application was
enclosed.
   (i) Notwithstanding any other provision of this section, where the
producer of record discovers a material error in an application, the
producer of record shall be authorized to rescind coverage bound for
a period up to 24 hours after the date and time established pursuant
to the plan's electronic effective date procedure.
   (j) To ensure compliance with the electronic effective date
procedure, application forms shall contain the following statement in
12-point boldface type:
      IMPORTANT NOTICE

THIS POLICY IS NOT EFFECTIVE UNTIL YOUR APPLICATION IS ELECTRONICALLY
TRANSMITTED TO THE PLAN BY YOUR AGENT OR BROKER. THE FOLLOWING
CONDITIONS MUST ALSO BE MET:

(1) BOTH YOU AND YOUR AGENT OR BROKER MUST SIGN AND DATE A PROPERLY
COMPLETED APPLICATION.

(2) YOUR AGENT OR BROKER MUST TRANSMIT YOUR APPLICATION TO THE PLAN
WITHIN TWO DAYS OF ITS COMPLETION.

YOU MAY REQUEST THAT YOUR AGENT OR BROKER TRANSMIT THE DOCUMENTS IN
YOUR PRESENCE TO ENSURE IMMEDIATE COVERAGE, PROVIDED THE ABOVE
REQUIREMENTS ARE MET.

IF THE ABOVE REQUIREMENTS ARE NOT MET, THE EFFECTIVE DATE OF YOUR
COVERAGE MAY BE DELAYED.

  SEC. 3.  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, and at those additional
times as it deems prudent, on the status of the program.
  SEC. 4.  Section 11629.84 of the Insurance Code is amended to read:

   11629.84.  This article shall remain in effect only until January
1, 2016, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2016, deletes or extends
that date.
  SEC. 5.  Section 11629.85 of the Insurance Code is amended to read:

   11629.85.  (a) On or before March 1 of each year, the commissioner
shall prepare and propose a plan to the Senate Committee on Banking,
Finance, and Insurance and the Assembly Committee 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 Committee
on Banking, Finance, and Insurance and the Assembly Committee on
Insurance. The information required under subdivision (c) shall also
be provided to the Senate Committee on Transportation and Housing and
the Assembly Committee 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 in eligible counties, 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) In cooperation with the California Automobile Assigned Risk
Plan, 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) A detailed explanation of the department's use for the program
of funds assessed pursuant to Section 1872.81.
   (5) For the previous calendar year, a list of the total low-cost
auto premium for each county in which the program was available.
   (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, as calculated pursuant to subdivision (c) of
Section 11629.72.
   (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.
   (4) The program's outreach efforts lead uninsured motorists to
contact a producer, and the driver obtains any auto insurance policy
that complies with California law.
   (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. 6.  Section 16020.1 of the Vehicle Code is amended to read:
   16020.1.  (a) On and after January 1, 2016, 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, 2016, 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. 7.  Section 16020.2 of the Vehicle Code is amended to read:
   16020.2.  (a) On and after January 1, 2016, 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, 2016, 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.