BILL NUMBER: SB 596 AMENDED
BILL TEXT
AMENDED IN SENATE MAY 2, 2011
AMENDED IN SENATE APRIL 25, 2011
INTRODUCED BY Senator Price
FEBRUARY 17, 2011
An act to amend Sections 790.034, 10089.2, and 10103.5 of the
Insurance Code, relating to insurance.
LEGISLATIVE COUNSEL'S DIGEST
SB 596, as amended, Price. Insurance: disclosures.
Existing law requires an insurer, upon receiving notice of a
claim, to immediately, but not more than 15 calendar days after
receipt, provide the insured with a legible reproduction of the
specified Insurance Code section, in at least 12-point type,
detailing acts prohibited as unfair trade practices, and a written
notice, as specified.
This bill would delete the requirement to provide a
reproduction of the specified Insurance Code, and would require
that the contents of the written notice be changed , as
specified, and be in at least 10-point
12-point type. The bill would delete the 12-point type
requirement with regard to the reproduction of the Insurance Code
section, and would instead also require that the
insurer provide to the insured a copy of a specified portion of the
Insurance Code section upon oral or written request of the insured.
Existing law prohibits any policy of residential property
insurance from being issued unless the named insured is provided a
copy of the California Residential Property Insurance Disclosure.
Existing law, effective July 1, 2011, prescribes the contents of the
California Residential Property Insurance Bill of Rights.
This bill would allow the California Residential Property
Insurance Disclosure and the California Residential Property
Insurance Bill of Rights to be placed in the same document.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 790.034 of the Insurance Code is amended to
read:
790.034. (a) Regulations adopted by the commissioner pursuant to
this article that relate to the settlement of claims shall take into
consideration settlement practices by classes of insurers.
(b) (1) Upon receiving notice of a claim, every insurer shall
immediately, but no more than 15 calendar days after receipt of the
claim, provide the insured with a written notice containing the
following language in at least 10-point
12-point type:
"Subdivision (h) of Section 790.03 of the Insurance Code
and Sections 2695.5, 2695.7, 2695.8, and 2695.9 of Subchapter 7.5 of
Chapter 5 of Title 10 of the California Code of Regulations govern
claims settlement practices and how insurance claims must be
processed in this state. This law and these regulations are available
"In addition to subdivisions (h) and (i) of Section
790.03 of the Insurance Code, Fair Claims Settlement Practices
Regulations govern how insurance claims must be processed in this
state. These regulations are available at the Department of
Insurance Internet Web site, www.insurance.ca.gov. You may also
obtain a copy of this law and these regulations free of charge from
this insurer."
(2) Every insurer shall provide, whether requested orally or in
writing by an insured, a copy of subdivision (h)
subdivisions (h) and (i) of Section 790.03 of the
Insurance Code and , unless the regulations are inapplicable to
that class of insurer, copies of Sections 2695.5, 2695.7,
2695.8, and 2695.9 of Subchapter 7.5 of Chapter 5 of Title 10 of the
California Code of Regulations , unless the regulations are
inapplicable to that class of insurer . This law and these
regulations shall be provided to the insured within 15 calendar days
of request.
(3) The provisions of this subdivision shall apply to all insurers
except for those that are licensed pursuant to Chapter 1 (commencing
with Section 12340) of Part 6 of Division 2, with respect to
policies and endorsements described in Section 790.031.
SEC. 2. Section 10089.2 of the Insurance Code is amended to read:
10089.2. (a) (1) Subject to the approval of the commissioner,
every insurer subject to this chapter shall, at the time of offering
to issue or offer to renew coverage as part of the offer of coverage
required by Section 10081, disclose to the applicant in writing as a
freestanding document or in the same document containing the offer of
coverage required by Section 10081, which brings attention to the
applicant, all discounts or surcharges, if any that are available
from the insurer for that insurance and for any related insurance
provided under that coverage as part of the offer of coverage
required by Section 10081.
(2) The insurer shall provide and disclose in writing any
discounts or surcharges, if any, for earthquake hazard reductions,
which shall include, but not be limited to, retrofitting of the
residential dwelling by tying the structure to the foundation or
bracing the structure to the foundation, reinforcement of the
fireplace chimney, or securing of the hot water heater, and any other
discounts that are available from the insurer.
(b) Each insurer that offers earthquake insurance through licensed
agents or brokers shall provide in writing the document required in
subdivision (a) and any documents required by subdivision (a) of
Section 10083 to the agents and brokers listing all of the discounts
or surcharges, if any, that are required to be disclosed to the
applicant under this section, and shall require its agents and
brokers to make the disclosures required by this section.
(c) An insurer is not subject to this section where an insured has
completed earthquake hazard reductions and the insurer has provided
discounts or surcharges for the specific policy in the form of
premium rate changes.
SEC. 3. Section 10103.5 of the Insurance Code, as added by Section
4 of Chapter 589 of the Statutes of 2010, is amended to read:
10103.5. (a) Every California Residential Property Insurance
Disclosure shall be accompanied by a California Residential Property
Insurance Bill of Rights. If the insurer provides the insured with an
electronic copy of a policy, the bill of rights may also be
transmitted electronically.
(b) The California Residential Property Insurance Bill of Rights
shall be plainly prepared in no less than 10-point type and may be
included in the same document containing the California Residential
Property Insurance Disclosure, set forth in Section 10102. The Bill
of Rights shall contain the following:
""California Residential Property Insurance
Bill of Rights
A consumer is entitled to receive information
regarding homeowner's insurance. The following
is a limited overview of information that your
insurance company can provide:
44 The insurance company's customer
service telephone number for
underwriting, rating, and claims inquiries.
44 A written explanation for any
cancellation or nonrenewal of your policy.
44 A copy of the insurance policy.
44 An explanation of how your policy
limits were established.
44 In the event of a claim, an
itemized, written scope of loss report prepared
by the insurer or its adjuster within a
reasonable time period.
44 In the event of a claim, a copy
of the Unfair Practices Act and, if requested,
a copy of the Fair Claims Settlement Practices
Regulations.
44 In the event of a claim,
notification of a consumer's rights with
respect to
the appraisal process for resolving claims
disputes.
44 An offer of coverage and premium
quote for earthquake coverage, if eligible.
A consumer is also entitled to select a
licensed contractor or vendor to repair,
replace, or rebuild damaged property covered by
the insurance policy.
The information provided herein is not all
inclusive and does not negate or preempt
existing California law. If you have any
concerns or questions, contact your agent,
broker, insurance company, or the California
Department of Insurance consumer
information line at (800) 927-HELP (4357) or at
www.insurance.ca.gov for free insurance
assistance.''
(c) (1) The bill of rights shall be distributed by all insurers
licensed to sell residential property insurance in this state.
(2) If the insurer under a personal lines residential property
insurance policy reports claims history or loss experience of
insureds under those policies to an insurance-support organization,
the insurer shall include the following disclosure in the California
Residential Property Insurance Bill of Rights:
"This insurer reports claim information to one or more claims
information databases. The claim information is used to furnish loss
history reports to insurers. If you are interested in obtaining a
report from a claims information database, you may do so by
contacting:
(Insert the name, toll-free telephone number, and, if applicable,
Internet Web site address of each claims information database to
which the insurer reports the information covered by this section)"
(d) This section shall become operative on July 1, 2011.