BILL NUMBER: AB 974	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MARCH 31, 2011

INTRODUCED BY   Assembly Member Portantino

                        FEBRUARY 18, 2011

    An act to amend Section 790.02 of the Insurance Code,
relating to insurance.   An act to amend Section 11732.5
of the Insurance Code, relating to workers' compensation insurance.




	LEGISLATIVE COUNSEL'S DIGEST


   AB 974, as amended, Portantino.  Insurance: unfair trade
practices.   Workers' compensation insurance: rates.
 
   Existing law regulates the rate that may be charged on workers'
compensation insurance and requires every workers' compensation
insurer to adhere to a uniform experience rating plan filed with the
Insurance Commissioner by a rating organization designated by the
commissioner and subject to his or her disapproval. Existing law
requires that a rate be adequate to cover an insurer's losses and
expenses, not tend to create a monopoly, and not be unfairly
discriminatory. Under existing law, rates are unfairly discriminatory
if, after allowing for practical limitations, price differentials
fail to reflect equitably the difference in expected losses and
expenses.  
   This bill would provide that a rate that includes a price
differential because the policyholder purchased the policy through a
broker is unfairly discriminatory and shall not be approved. 

   Existing law prohibits a person from engaging in any trade
practice that is an unfair method of competition or an unfair or
deceptive act or practice in the business of insurance. 

   This bill would make technical, nonsubstantive changes to that
provision. 
   Vote: majority. Appropriation: no. Fiscal committee:  no
  yes  . State-mandated local program: no.


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

   SECTION 1.    Section 11732.5 of the  
Insurance Code   is amended to read: 
   11732.5.  Rates shall not be unfairly discriminatory. Rates are
unfairly discriminatory if, after allowing for practical limitations,
price differentials fail to reflect equitably the difference in
expected losses and expenses.  A rate that includes a price
differential because the policyholder purchased the policy through a
broker is unfairly discriminatory and shall not be approved.  A
rate of an insurer shall not be deemed unfairly discriminatory
because different premiums result for policyholders with like loss
exposures but different expenses, or like expenses but different loss
exposures, as long as the rate reflects the differences with
reasonable accuracy. 
  SECTION 1.    Section 790.02 of the Insurance Code
is amended to read:
   790.02.  A person shall not engage in this state in any trade
practice that is defined in this article as, or determined pursuant
to this article to be, an unfair method of competition or an unfair
or deceptive act or practice in the business of insurance.