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