BILL ANALYSIS Ó AB 2019 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 2019 (Hill) As Amended August 7, 2012 Majority vote ----------------------------------------------------------------- |ASSEMBLY: |72-0 |(May 3, 2012) |SENATE: |37-0 |(August 13, | | | | | | |2012) | ----------------------------------------------------------------- Original Committee Reference: HUM. S. SUMMARY : Establishes requirements regarding the Foster Family Home and Small Family Home Insurance Fund (Fund). Specifically, this bill : 1)Requires the Department of Social Services (DSS) or designated agency to notify a claimant of the decision to approve or reject a claim within 15 days of the decision. 2)Provides that an applicable statute of limitations period for a cause of action arising out of the same occurrence for which a claim has been filed with the Fund shall not commence until the date DSS, or designated agency, has notified the person that the department has either rejected or approved the claim. 3)Requires the Fund to be maintained at an adequate level to meet anticipated liabilities. 4)Prohibits homeowner's or tenant's insurance policy issuers from failing to accept an application for that insurance or cancelling that insurance solely because the applicant or policyholder is engaged in foster home activities in a certified family home. The Senate amendments clarify that a certified family home of a foster family agency is not eligible for the Fund, but retains the prohibition of a homeowner's or tenant's insurance policy issuers from failing to accept an application for that insurance or cancelling that insurance solely because the applicant or policyholder is engaged in foster home activities in a certified family home. AS PASSED BY THE ASSEMBLY , this bill allowed certified family homes of foster family agencies to be eligible for claims AB 2019 Page 2 against the Fund, in addition to what is noted in the summary above. FISCAL EFFECT : According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs. COMMENTS : Background : Established in 1986 (SB 1159 (Royce), Chapter 1330, Statutes of 1986) as a response to concerns about foster parent liability, the Fund was originally created to protect families from losing their homeowners insurance when they took in foster children. The Fund started as a pilot project and was expanded statewide when it was found by the counties to be a useful tool for recruiting foster parents. Funds are accessible by aggrieved foster children or their guardians for a non-intentional injury that occurs while in foster care placement. The Fund provides defense and indemnification for foster parents who are facing potential liability for injuries to foster children in their care. Statutes of limitations : Statutes of limitations restrict the time within which legal proceedings may be brought. Statutes of limitations are designed to prevent fraudulent and stale claims from arising after all evidence has been lost or after the facts have become obscure through the passage of time or the defective memory, death, or disappearance of witnesses. Statutes of limitations are relevant to the Fund in two ways: First, claims must be filed with the Fund within the applicable statute of limitations period for a civil action based on the same occurrence for which the claim is made. Second, a claim against the Fund and determination by the Fund are prerequisites to filing a civil claim. Therefore, the statute of limitations on the legal claim runs and may even expire prior to the determination on the claim against the Fund. The latter situation is exacerbated by the fact that, as the Bureau of State Audits (BSA) noted, claims are often not acted on within the required 180 days. This bill addresses this issue by providing that any limitations period for filing a court action based on the same occurrence for which a claim is made against the Fund "shall not commence until" the claim has been accepted or rejected. The author says that, "by extending the statutes of limitations for claims that go through the Fund, this bill AB 2019 Page 3 takes an important step in ensuring that any child that is harmed while in foster care has the same right to due process as anyone else." Insurance discrimination : This bill also addresses the fact that foster homes certified by Foster Family Agencies (FFAs) do not have the same protections against discrimination with respect to homeowners' and tenants' insurance policies as do licensed foster homes and licensed small family homes. "Absent coverage by the Fund," the author says, "the state should make it as easy as possible for certified foster parents to be able to buy insurance coverage to protect their resources." To afford certified homes the same access to homeowners' or renters' insurance as foster family homes and small family homes to the extent claims are not covered by the Fund, this bill adds to the prohibitions on insurance discrimination against licensed foster family homes or licensed small family homes, protection for certified family homes. Aspiranet, an FFA, notes in support of this bill that "Ýt]this bill does not deal with all of the issues raised in the ÝBSA] audit, but it provides one step forward in treating foster parents alike in terms of their ability to receive homeowner and tenant insurance coverage on the private market." Aspiranet says that "this could help with the recruitment and retention of families who might be interested in becoming foster parents, but have concerns about obtaining appropriate homeowners and tenets insurance as they care for foster children in their homes." Prior legislation : AB 2206 (Hill) of 2010, would have limited the Fund liability exclusions to only those criminal or intentional acts committed by a foster parent. AB 2206 was held in the Assembly Appropriations Committee. SB 706 (Florez) of 2004, would have narrowed the scope of the Fund and would have, among other provisions, specified that losses arising from criminal, intentional or fraudulent acts by a foster parent or a person residing in the home were excluded from liability, even if there was a related allegation of negligence. SB 706 died in the Assembly Judiciary Committee without a hearing. AB 1467 (Alby) of 1997, clarified the scope of coverage of the Fund by, among other things, including members of the foster parent's household under the exclusion of liability from the AB 2019 Page 4 Fund for immoral or sexual behavior. AB 1467 passed the Assembly but died after it was not heard in the Senate Health and Human Services Committee. SB 470 (Royce), Chapter 195, Statutes of 1988, removed a sunset date, allowing for continuation of the Fund. SB 1159 (Royce), Chapter 1330, Statutes of 1986, established the Fund and prohibited insurance carriers from rejecting any applicant or policyholder solely on the basis that they were foster parents. Analysis Prepared by : Chris Reefe / HUM. S. / (916) 319-2089 FN: 0004783