BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 2056
                                                                  Page  1

          Date of Hearing:   May 7, 2014

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                  AB 2056 (Dababneh) - As Amended:  April 24, 2014 

          Policy Committee:                               
          InsuranceVote:13-0

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              No

           SUMMARY  

          This bill clarifies California Department of Insurance (CDI)  
          regulation over pet insurance.  Specifically, this bill:

          1)Requires disclosure of exclusions and payment provisions in  
            pet insurance policies for pet insurance issues after July 1,  
            2015. 

          2)Establishes definitions for terms commonly used in pet  
            insurance policies.  

          3)Authorizes the Insurance Commissioner (IC) to levy civil  
            penalties for violations, and to adopt regulations.

           FISCAL EFFECT  

          1)Minor ongoing workload to CDI for oversight of pet insurance  
            policies, under $50,000 (Insurance Fund).

          2)If regulations are necessary to clarify, costs will likely be  
            minor and absorbable.

          3)Minor penalty revenues, to the extent fines for violations are  
            assessed and collected.  

           COMMENTS  

           1)Purpose  . The author states pet insurance policies are often  
            difficult for consumers to navigate and understand.  Typically  
            there are several types of policies, and costs can vary based  
            on the amount of coverage, the type of coverage, as well as  








                                                                  AB 2056
                                                                  Page  2

            the species, age, and breed of the pet.  This bill is  
            sponsored by CDI to require pet insurers to disclose  
            information regarding their policies.  

           2)Previous Legislation  .  AB 2411 (Jones) of 2010, which was  
            similar to this bill, was vetoed by the governor, who called  
            it unnecessary.  Existing law allows for regulation of "any  
            insurance not..[specifically listed in statute]?which is a  
            proper subject of insurance."  This bill explicitly authorizes  
            the IC to regulate pet insurance in order to reduce legal  
            risk.

           Analysis Prepared by  :    Lisa Murawski / APPR. / (916) 319-2081