BILL NUMBER: AB 1024	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  APRIL 28, 2011
	AMENDED IN ASSEMBLY  MARCH 25, 2011

INTRODUCED BY   Assembly Member Hueso

                        FEBRUARY 18, 2011

   An act to add Sections  1636 and 11629.86  
11629.86, 11   629.87, and 11629.88  to the Insurance
Code, relating to insurance.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 1024, as amended, Hueso. Insurance: low-cost automobile
insurance: sales.
   Existing law establishes within the California Automobile Assigned
Risk Plan a low-cost automobile insurance program in order to
provide a means for eligible consumers to buy automobile insurance,
as specified. 
   This bill would require the Department of Insurance to develop and
maintain an Internet Web site through which the department would
sell low-cost automobile insurance policies directly to eligible
consumers, as provided, and would require that the commission paid by
the insurer for those sales would be retained by the department and
used for maintaining and improving the Internet Web site or for
conducting low-cost automobile insurance program outreach. 

   This bill would authorize a California Automobile Assigned Risk
Plan (plan) certified producer to accept and process an application
to purchase low-cost automobile insurance policies through an
Internet Web site, as provided. The bill would require the plan to
coordinate with the Department of Insurance in order to develop a
system for receiving and assigning policies issued through Internet
Web sites, and would provide that the plan may request, and the
department may include in its plan submitted to the Legislature the
use of $50,000 from the department's existing consumer outreach fund
for the sole purpose of implementing these provisions.  
   This bill would require the plan to contract with a certified
producer, by way of an open bidding process, to develop and maintain
an Internet Web site dedicated to accepting and processing low-cost
automobile insurance policies, to be known as the Primary California
Low-Cost Auto Web Site, as provided. The bill would also provide that
the plan may request and the department may include in its plan
submitted to the Legislature that up to $100,000 from the department'
s existing consumer outreach fund be made available for development
of the Primary California Low-Cost Auto Web Site.  
   This bill would prohibit a low-cost automobile insurance policy
applicant from being required to provide a copy of his or her, or
other household member's, driver's license, if the department finds
another suitable means of verifying the driver's licensure. 
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


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

   SECTION 1.    Section 11629.86 is added to the 
 Insurance Code  , to read:  
   11629.86.  (a) A California Automobile Assigned Risk Plan
certified producer may accept and process an application to purchase
a low-cost automobile insurance policy under the program through an
Internet Web site, in accordance with this section and regulations
adopted by the Department of Insurance pursuant to this section.
   (b) Any producer seeking certification to accept and process
low-cost automobile insurance policy applications through an Internet
Web site shall notify the California Automobile Assigned Risk Plan
of its intentions to do so prior to accepting any applications to the
program, and the producer's Internet Web site shall comply with the
rules established by paragraphs (1) to (6), inclusive, and paragraphs
(8) and (9) of subdivision (c) of Section 11629.87.
   (c) Prior to accepting payment and upon transmitting any
information from the consumer, the producer's Internet Web site shall
include a clear explanation of whether the consumer will be afforded
insurance coverage upon payment and, if not, when the consumer will
receive coverage and how he or she will receive notice of coverage.
   (d) A producer accepting and processing applications through an
Internet Web site shall be entitled to the same commission available
to a producer selling a low-cost automobile insurance policy by any
other means acceptable under the law.
   (e) Any producer accepting and processing applications through an
Internet Web site is subject to the laws and rules governing this
program and is liable for any errors and omissions related to the
transaction of insurance to the same extent as a producer selling a
low-cost automobile insurance policy by any other means acceptable
under the law.
   (f) Any consumer information required by this article may be
accepted by electronic means after the Department of Insurance adopts
regulations implementing this section and only if the information is
submitted in accordance with those regulations.
   (g) The California Automobile Assigned Risk Plan shall coordinate
with the Department of Insurance in order to develop a system for
receiving and assigning policies issued through Internet Web sites.
   (h) The California Automobile Assigned Risk Plan may request, and
the Department of Insurance may include in its plan submitted
pursuant to Section 11629.85 up to fifty thousand dollars ($50,000)
from the department's existing consumer outreach fund to be used for
the sole purpose of implementing this section. 
   SEC. 2.    Section 11629.87 is added to the 
 Insurance Code   , to read:  
   11629.87.  (a) Subject to the approval of the commissioner, the
California Automobile Assigned Risk Plan shall contract with a
certified producer to develop and maintain an Internet Web site
dedicated to accepting and processing low-cost automobile insurance
policies, hereafter to be known as the Primary California Low-Cost
Auto Web Site.
   (b) The California Automobile Assigned Risk Plan may, with the
approval of the Department of Insurance, authorize the contracted
producer to use, for the period of the contract, the department-owned
Internet Web site domain name, http://www.MyLowCostAuto.com, or any
other relevant domain names the Department of Insurance controls.
   (c) The California Automobile Assigned Risk Plan shall ensure that
the contracted producer, through the Primary California Low-Cost
Auto Web Site, does all of the following:
   (1) Provides all disclosures and other information required by law
that would otherwise be provided by a producer.
   (2) Effectively educates consumers about the policy and its
limits.
   (3) Collects any documents that are necessary for determining
qualification for the policy, if any.
   (4) Has a system for creating an electronic certification of the
information provided by the consumer.
   (5) Maintains safeguards to ensure that consumer information
transmitted through the Internet Web site is secure.
   (6) Provides the physical address of the producer and both
telephonic and electronic contact information for the producer.
   (7) Provides contact information, including the Internet Web site
address, for other California Automobile Assigned Risk Plan certified
producers, in order to offer prospective policyholders the
opportunity to apply for the policy through a local producer.
   (8) Provides contact information for the Consumer Services
Division of the Department of Insurance.
   (9) Adheres to any other rules and provides any other information
required by Department of Insurance regulations adopted to promote
the purpose of this section.
   (d) The Primary California Low-Cost Auto Web Site shall not be
made available to the public until the commissioner has made a
determination that it adequately provides all the necessary
information a consumer would need in order to purchase the policy.
Upon this determination, and notwithstanding any other law or
regulation, the Primary California Low-Cost Auto Web Site shall be
deemed an acceptable method by which application for a low-cost
automobile policy may be made.
   (e) The Primary California Low-Cost Auto Web Site shall be
constructed to forward the application, supporting documents, and the
applicant's certification to the California Automobile Assigned Risk
Plan.
   (f) (1) The Primary California Low-Cost Auto Web Site shall accept
payment by credit or debit card or other form of electronic payment
the Department of Insurance determines to be appropriate. It shall
also provide a mechanism for payment by check.
   (2) Prior to accepting payment and upon transmitting any
information from the consumer, the Primary California Low-Cost Auto
Web Site shall include a clear explanation of whether the consumer
will be afforded insurance coverage upon payment and, if not, when
the consumer will receive coverage and how he or she will receive
notice of coverage.
   (g) Any consumer who does not qualify for the low-cost automobile
insurance policy shall be given an option to be directed to the
Department of Insurance's auto insurance premium comparison Internet
Web page.
   (h) The contracted producer shall, in consultation with the
California Automobile Assigned Risk Plan, make the Primary California
Low-Cost Auto Web Site available in as many languages as is
feasible, but this shall include English and Spanish. The English and
Spanish language sites shall be made available to the public as soon
as possible, irrespective of whether other versions are finalized.
   (i) Notwithstanding any provision of Chapter 2 (commencing with
Section 10290) of Part 2 of Division 2 of the Public Contract Code,
the California Automobile Assigned Risk Plan shall solicit the
contract to develop and maintain the Primary California Low-Cost Auto
Web Site via an open bidding process; however, it shall not issue a
request for proposals until the Department of Insurance has approved
the request. The contract shall not be for more than three years, and
12 months before the expiration of the contract, the California
Automobile Assigned Risk Plan shall determine whether to renew the
contract or solicit bids for a new contract.
   (j) Notwithstanding any relationship created between a producer
and the California Automobile Assigned Risk Plan or the Department of
Insurance as a result of this contract, any liability and duty
associated with accepting and processing low-cost automobile
insurance policies or with the Primary California Low-Cost Auto Web
Site shall be solely attributable to the producer receiving this
contract.
   (k) Notwithstanding any other law, the California Automobile
Assigned Risk Plan, the Department of Insurance, or any other
governmental agency may direct prospective low-cost automobile
insurance policy applicants to the Primary California Low-Cost Auto
Web Site.
   (l) The California Automobile Assigned Risk Plan may request, and
the Department of Insurance may include in its plan submitted
pursuant to Section 11629.85 that up to one hundred thousand dollars
($100,000) from the department's existing consumer outreach fund be
made available for the development of the Primary California Low-Cost
Auto Web Site. 
   SEC. 3.    Section 11629.88 is added to the 
 Insurance Code   , to read:  
   11629.88.  An applicant shall not be required to provide a copy of
the applicant's or other household member's driver's license, if the
Department of Insurance finds that there is another suitable means
of verifying the driver's licensure.  
  SECTION 1.    Section 1636 is added to the
Insurance Code, to read:
   1636.  A license shall not be required under this chapter for the
department and the department's employees to engage in the sale of
low-cost automobile insurance policies pursuant to Section 11629.86.
 
  SEC. 2.    Section 11629.86 is added to the
Insurance Code, to read:
   11629.86.  (a) The Department of Insurance shall develop and
maintain an Internet Web site through which it sells low-cost
automobile insurance policies directly to qualifying consumers.
   (b) (1) Initial development of the Internet Web site shall be
funded with existing funds held by the department for consumer
outreach.
   (2) The commission associated with any policy issued through the
Internet Web site that would otherwise be paid to a producer pursuant
to Section 11629.76 shall be retained by the department for the sole
purpose of maintaining and improving the Internet Web site or for
conducting low-cost automobile insurance outreach.
   (3) The commission collected by the department pursuant to
paragraph (2) shall not exceed the reasonable cost of maintaining and
improving the Internet Web site or for conducting low-cost
automobile insurance outreach.
   (c) The department shall ensure that, through the Internet Web
site, it does all of the following:
   (1) Provides all disclosures and other information required by law
that would otherwise be provided by a producer.
   (2) Effectively educates consumers about the policy and its
limits.
   (3) Collects any documents that it determines are necessary for
determining qualification for the policy, if any.
   (4) Has a system for creating an electronic certification of the
information provided by the consumer.
   (5) Maintains safeguards to ensure that consumer information
transmitted through the Internet Web site is secure.
   (d) The Internet Web site shall not be made available to the
public until the commissioner has made a determination that it
adequately provides all the necessary information a consumer would
need in order to purchase the policy. Upon this determination, and
notwithstanding any other law or regulation, the Internet Web site
shall be deemed an acceptable method by which application for a
low-cost automobile policy may be made.
   (e) The Internet Web site shall be constructed to forward the
application, supporting documents, and the applicant's certification
to the California Automobile Assigned Risk Plan. The California
Automobile Assigned Risk Plan shall coordinate with the department in
order to develop a system for receiving and assigning policies
issued through the Internet Web site.
   (f) (1) The Internet Web site shall accept payment by credit or
debit card or other form of electronic payment the department
determines to be appropriate. It shall also provide a mechanism for
payment by check.
   (2) Prior to accepting payment and upon transmitting any
information from the consumer, the Internet Web site shall include a
clear explanation of whether the consumer will be afforded insurance
coverage upon payment and, if not, when the consumer will receive
coverage and how he or she will receive notice of coverage.
   (g) Any consumer who does not qualify for the low-cost automobile
insurance policy shall be given an option to be directed to the
department's auto insurance premium comparison Internet Web page.
   (h) The department shall make the Internet Web site available in
as many languages as it deems necessary, but this shall include
English and Spanish. The English and Spanish language sites shall be
made available to the public as soon as possible, irrespective of
whether other versions are finalized.