BILL NUMBER: AB 2084 ENROLLED
BILL TEXT
PASSED THE SENATE AUGUST 23, 2012
PASSED THE ASSEMBLY AUGUST 27, 2012
AMENDED IN SENATE JULY 5, 2012
AMENDED IN SENATE JUNE 21, 2012
AMENDED IN ASSEMBLY MAY 25, 2012
AMENDED IN ASSEMBLY MAY 3, 2012
AMENDED IN ASSEMBLY APRIL 12, 2012
INTRODUCED BY Assembly Member Solorio
FEBRUARY 23, 2012
An act to amend Sections 10270, 10270.2, and 10270.3 of, and to
add Section 10270.2.5 to, the Insurance Code, relating to insurance.
LEGISLATIVE COUNSEL'S DIGEST
AB 2084, Solorio. Blanket insurance.
Existing law provides that blanket insurance is that form of
insurance providing coverage for specified circumstances and insuring
by describing all persons within a class of persons defined in a
policy issued to a master policyholder, and not by specifically
naming the persons covered. Under existing law, the permitted types
of blanket insurance are those where the blanket policy is issued to
specified entities, including, but not limited to, a volunteer fire
company providing benefits to members only in the event of accident
incurred while performing actions incident to such membership and a
proprietor or sponsor of an organized camping institution providing
benefits to campers or persons responsible for their support for
death or dismemberment resulting from accident, or for hospital,
medical, surgical, or nursing expenses resulting from accident or
sickness related to the camper's specified connection with the
camping institution.
This bill would revise and recast those above entities to instead
include (1) a volunteer or governmental fire department, emergency
medical services company, or similar volunteer or governmental
organization providing benefits to members or participants only in
the event of accident incurred while performing actions incident to
an activity or operation sponsored or supervised by the department,
company, or organization and (2) a sports team or camp, as specified,
providing benefits to participants, campers, and other specified
persons responsible for their support for death or dismemberment
resulting from accident, or for hospital, medical, surgical, or
nursing expenses resulting from specified accident or sickness
related to the participants, campers, or other specified person's
connection with the sports team or camp, as specified.
This bill would additionally specify other permitted types of
blanket insurance, providing specified benefits, issued to specified
entities that include, but are not limited to, (1) an employer
providing accident benefits to any group of workers, dependents, or
guests, limited by reference to specified hazards incident to
activities or operations of the employer, (2) any common carrier or
any operator, owner, or lessor of a means of transportation providing
accident benefits to any specified group of persons who may become
lessees or passengers limited by reference to travel status, and (3)
an entertainment production company providing accident benefits to
any group of participants, volunteers, audience members, contestants,
or workers while engaged in any activity or operation of the
entertainment production company. The bill would authorize the person
insured, when the premium is paid for these types of blanket
insurance, to request a copy of the policy from the insurer.
Existing law prohibits a person from transacting any class of
insurance business in this state without first being an admitted
insurer. Under existing law, admission is secured by procuring a
certificate of authority from the Insurance Commissioner. Existing
law authorizes the above-described blanket policies, among others, to
provide that the cost of the insurance coverage is required to be
paid by either the policyholder, or the individuals insured or their
parents or guardians, payable through the policyholder. Existing law
prohibits a blanket policy from being issued until approved as to
substance and form by the commissioner.
This bill would extend these provisions to the newly established
permitted types of blanket insurance described above. The bill would
require an insurer who intends to issue a policy according to these
revised provisions to file, prior to issuance, any new language in
that policy with the commissioner for approval. The bill would also
authorize the commissioner to add to the list of entities that may be
eligible to purchase blanket insurance for any risk or class of
risks, relating to accident benefits, as defined, which may be
properly eligible for blanket insurance. The bill would require the
commissioner to issue and post on the commission's Internet Web site
a letter order, as specified, each time the commissioner exercises
his or her discretion to add an entity to the list of entities
eligible to purchase blanket insurance, and would authorize the
commissioner to withdraw the issuance of a letter order in accordance
with a prescribed process.
The bill would make additional conforming, nonsubstantive
changes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 10270 of the Insurance Code is amended to read:
10270. (a) This chapter shall not apply to workmen's compensation
insurance, any policy of liability insurance with or without
supplementary coverage, or any policy or contract of reinsurance.
(b) This chapter shall apply to selected group disability
insurance as defined in Section 10270.97, except insofar as it is
exempted from Section 10401.
(c) This chapter shall apply to each of the types of insurance
enumerated in this subdivision that insure more than one person,
except to the extent that the type of insurance may be exempted from
compliance with particular portions of this chapter by the provisions
of this chapter relating to that type of insurance.
The types of insurance that insure more than one person and that
are hereby exempted from subdivision (c) of Section 10320 (but family
expense disability insurance only to the extent therein provided),
and Section 10401 (but only to the extent in this chapter provided)
are:
(1) Blanket insurance, as defined in subdivision (a) of Section
10270.2.
(2) Tuition refund insurance, as defined in Section 10270.1.
(3) Group disability insurance, as defined in Sections 10270.5,
10270.505, and 10270.57.
(4) Family expense disability insurance, as defined in Section
10270.7.
(5) Unemployment compensation disability insurance, as defined in
paragraph (6) of subdivision (a) of Section 10270.2.
SEC. 2. Section 10270.2 of the Insurance Code is amended to read:
10270.2. (a) Blanket insurance is that form of insurance
providing coverage for specified circumstances and insuring by
description all or nearly all persons within a class of persons
defined in a policy issued to a master policyholder, and not by
specifically naming the persons covered, by certificate or otherwise,
although a statement of the coverage provided may be given, or
required by the policy to be given, to eligible persons. The
permitted types of blanket insurance are those where the blanket
policy is issued to any of the following:
(1) A volunteer or governmental fire department, emergency medical
services company, or similar volunteer or governmental organization
providing benefits to members or participants only in the event of
accident incurred while performing actions incident to an activity or
operation sponsored or supervised by the department, company, or
organization.
(2) A college, school, or other institution of learning, a school
district or districts or school jurisdictional unit, or to the head,
principal, or governing board of an educational unit who or which
shall be deemed the policyholder; providing benefits to students
without necessarily any restriction as to activity, time, or place,
or to teachers or employees while performing actions incident to
special duties, such as at camps, at summer playgrounds, or during
tours or excursions; and providing benefits to students, teachers, or
employees, and spouses and dependents of students, teachers, and
employees, for death or dismemberment resulting from accident, or for
hospital, medical, surgical, drug, or nursing expenses resulting
from accident or sickness.
(3) A sports team, camp, or sponsor, or proprietor thereof, who
shall be deemed the policyholder, providing benefits to sports team
participants, campers, employees, officials, supervisors, or persons
responsible for their support, for death or dismemberment resulting
from accident or for hospital, medical, surgical, or nursing expenses
resulting from accident, to those participants, campers, employees,
officials, supervisors, or persons responsible for their support, or
arising out of sickness of those participants, campers, employees,
officials, supervisors, or persons responsible for their support,
provided the accident or the first manifestation of sickness occurs
while those participants, campers, employees, officials, supervisors,
or persons responsible for their support are in or on the buildings
or premises of the sports team or camp, or being transported between
their homes and the sports team or camp, or while at any other place
as an incident to sports team- or camp-sponsored activities or while
being transported to, from, or between those places.
(4) (A) A newspaper, farm paper, magazine, or other periodical
publication, which shall be deemed the policyholder, providing
benefits for independent contractors, such as carriers, newsboys,
dealers, distributors, wholesalers, or others engaged in the sale,
distribution, collecting for, or other activities pertaining to the
marketing and delivery of the publication, including attendance at a
coaching school or participation as a member of a trip organized,
supervised, and sponsored as a reward for meritorious service, on
account of loss resulting from accident or sickness, the benefit to
be payable to the independent contractors or to their parents,
guardians, or other persons responsible for their support.
(B) When the premium for the insurance is paid by the person
insured, he or she may, upon request, obtain from the insurer in
certificate form a copy of the policy.
(5) Any religious, charitable, recreational, educational,
athletic, or civic organization, or branch thereof, which shall be
deemed the policyholder, providing benefits to any group of members,
employees, or participants for death or dismemberment or for
hospital, medical, surgical, or nursing expenses resulting from
accident incurred incident to specific hazards pertaining to any
activity or activities or operations sponsored or supervised by, or
on the premises of, the policyholder.
(6) An employer, a majority of the employees in this state of an
employer, or both, upon application, to pay the benefits afforded by
a voluntary plan of unemployment compensation disability insurance.
Notwithstanding the provisions of Section 10113, the policy may
incorporate by reference any of the appropriate provisions of Part 2
(commencing with Section 2601) of Division 1 of the Unemployment
Insurance Code and the authorized regulations of the Director of
Employment Development.
(7) An employer, who shall be deemed the policyholder, providing
benefits to any group of workers, dependents, or guests, limited by
reference to specified hazards incident to activities or operations
of the policyholder, for death or dismemberment, or for hospital,
medical, surgical, or nursing expenses, resulting from accident. When
the premium for the insurance is paid by the person insured, he or
she may, upon request, obtain from the insurer in certificate form a
copy of the policy.
(8) Any common carrier or any operator, owner, or lessor of a
means of transportation, who shall be deemed the policyholder,
providing benefits to any group of persons who may become lessees or
passengers, limited by reference to their travel status on that
common carrier or that means of transportation, for death or
dismemberment, or for hospital, medical, surgical, or nursing
expenses, resulting from accident. When the premium for the insurance
is paid by the person insured, he or she may, upon request, obtain
from the insurer in certificate form a copy of the policy.
(9) An entertainment production company, who shall be deemed the
policyholder, providing benefits to any group of participants,
volunteers, audience members, contestants, or workers for death or
dismemberment, or for hospital, medical, surgical, or nursing
expenses, resulting from accident while engaged in any activity or
operation of the policyholder. When the premium for the insurance is
paid by the person insured, he or she may, upon request, obtain from
the insurer in certificate form a copy of the policy.
(b) A "blanket policy" is any disability policy of the nature
herein described sold to any of the entities described in paragraphs
(1) to (9), inclusive, of subdivision (a) that provides coverage for
any group of persons within permitted categories defined in the
policy. Policies referred to in paragraph (6) of subdivision (a)
shall comply with the provisions of this section specifically
referring thereto. Policies referred to in paragraphs (1) to (5),
inclusive, or (7) to (9), inclusive, of subdivision (a) may provide
that the cost of the insurance coverage shall be borne by either the
policyholder, or the individuals insured or their parents or
guardians, payable through the policyholder. In the absence of a
policy provision excluding coverage for otherwise covered individuals
who have not individually enrolled with the policyholder and
undertaken to pay all or a specified portion of the premium allocable
to the individual, the policy shall provide the described insurance
for all who fall within the categories of covered individuals defined
in the policy. The policy may, but is not required to, contain
provisions requiring a minimum number of participating persons or a
minimum percentage of participation before the policy is effective.
In the absence of such a provision, coverage shall not be denied any
individual otherwise eligible on those grounds.
(c) A policy described in paragraphs (1) to (5), inclusive, or (7)
to (9), inclusive, of subdivision (a) shall not be issued until
approved as to substance and form by the commissioner. The
commissioner may, after notice and hearing, promulgate reasonable
rules and regulations relating to the substance, form, and issuance
of the policies that are necessary or desirable to preserve, insofar
as applicable, standards of substance, form, and issuance comparable
to the standards prescribed by this chapter that are applicable to
other types of disability policies, and to further the purposes for
which the policies are issued.
(d) A policy described in paragraph (6) of subdivision (a) shall
not be issued until approved as to form by the commissioner. The
commissioner may, after notice and hearing, promulgate reasonable
rules and regulations relating to the form and issuance of the
policies that do not affect the substance of the coverage, and that
are necessary or desirable to preserve, insofar as applicable,
standards of form and issuance comparable to the standards prescribed
by this chapter that are applicable to other types of disability
policies, and to further the purposes for which the policies are
issued. Notwithstanding the provisions of Section 10113, the policy
may incorporate by reference any of the appropriate provisions of
Part 2 (commencing with Section 2601) of Division 1 of the
Unemployment Insurance Code and the authorized regulations of the
Director of Employment Development.
(e) A policy described in this section shall not constitute
workers' compensation insurance, as defined in Section 109. A policy
described in paragraphs (3),(5), (7), (8), or (9) of subdivision (a)
shall not be marketed or sold as a substitute for health insurance
coverage compliant with the requirements of the federal Patient
Protection and Affordable Care Act (Public Law 111-148), as amended
by the Health Care and Education Reconciliation Act of 2010 (Public
Law 111-152).
(f) (1) An insurer that intends to issue a policy of blanket
insurance authorized by the amendments to this section pursuant to
the act adding this subdivision, or authorized pursuant to section
10270.2.5, using a policy form previously approved by the
commissioner, where the only new language in the policy is the
specification of the policyholder, covered persons, or the hazards or
activities insured, shall file that new language with the
commissioner prior to issuance of the policy. Submissions of
documents containing variable text or blanks shall include complete
lists of the variable wording or accurate descriptions of the
material to be inserted in lieu of the variable wording or in the
blanks of these documents.
(2) A policy using the new language shall not be issued until
either 30 days expires without notice from the commissioner after the
new language is filed, or the commissioner gives his or her written
approval prior to that time. If the commissioner at any time notifies
the insurer, in writing and specifying the reasons for his or her
opinion, that the filed new language does not comply with the
requirements of law, the insurer shall not issue any policy
containing that language.
(3) Nothing in this subdivision shall be construed to provide
separate authority for the commissioner to reopen review of
previously approved policy forms.
SEC. 3. Section 10270.2.5 is added to the Insurance Code, to read:
10270.2.5. (a) In addition to the permitted types of blanket
insurance issued to entities described in Section 10270.2, the
commissioner may, in his or her discretion, add other entities that
may be eligible to purchase blanket insurance for any class of risks
relating to benefits for death or dismemberment, or for hospital,
medical, surgical, or nursing expenses, resulting from accident which
may be properly eligible for blanket insurance.
(b) (1) The commissioner may issue a letter order, and shall post
the letter order on the Internet Web site of the Department of
Insurance, any time he or she exercises discretion pursuant to
subdivision (a) to add other entities that may be eligible to
purchase blanket insurance. These letter orders shall not be subject
to Chapter 3.5 (commencing with Section 11340) of Part 1 of Division
3 of Title 2 of the Government Code.
(2) The commissioner may withdraw a letter order issued pursuant
to this section in the manner described in subdivision (f) of Section
10291.5. A proceeding under this subdivision shall not be subject to
Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of
Title 2 of the Government Code.
SEC. 4. Section 10270.3 of the Insurance Code is amended to read:
10270.3. (a) A blanket disability policy of a type permitted
under paragraph (2) or (5) of subdivision (a) of Section 10270.2 may
include either a coordination of benefits policy provision or a
nonduplication of benefits policy provision, at the option of the
policyholder.
(b) The essential features of any policy under paragraph (2) or
(5) of subdivision (a) of Section 10270.2 shall be disclosed to the
insured, or the parent or legal guardian of the insured, prior to
enrollment in that policy. All disclosures shall state whether or not
the benefits payable under the blanket insurance policy are subject
to reduction, to the extent provided in the policy, if an individual
insured thereunder is entitled to benefits, whether on an indemnity
basis or on a provision-of-service basis, for hospital, medical,
dental, or surgical expenses under any other valid and collectible
individual, group, or blanket insurance policy or contract, hospital
or medical service program, or group-practice prepayment plan, except
for automobile medical payments insurance.
(c) The disclosure material shall be submitted to the commissioner
for review with the blanket insurance policy.