BILL NUMBER: SB 1065 AMENDED
BILL TEXT
AMENDED IN SENATE MARCH 28, 2014
INTRODUCED BY Senator Monning
FEBRUARY 18, 2014
An act to amend Section 116 of Sections
11629.85 and 13902 of, and to add Section 45.5 to, the
Insurance Code, relating to insurance.
LEGISLATIVE COUNSEL'S DIGEST
SB 1065, as amended, Monning. Insurance.
Insurance: reports: electronic submission.
Existing law provides for the regulation of insurers by the
Department of Insurance. Existing law directs the Insurance
Commissioner to enforce the execution of laws regulating the business
of insurance. The existing Insurance Code requires various entities
to submit certain reports to specified committees of the Legislature.
This bill would, except as specified, authorize reports required
to be submitted to a committee of the Legislature pursuant to the
Insurance Code to be submitted electronically, as specified. The bill
would also make other technical, nonsubstantive changes.
Under existing law, automobile insurance includes, among other
things, a contract of warranty or guaranty that promises service,
maintenance, parts replacement, repair, money, or other indemnity in
the event of loss or damage to a motor vehicle. Automobile insurance
also includes an agreement that promises repair or replacement of a
motor vehicle, or part of a motor vehicle, after a mechanical or
electrical breakdown at either no cost or a reduced cost to the
agreementholder.
This bill would make technical, nonsubstantive changes to those
provisions.
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 45.5 is added to the
Insurance Code , to read:
45.5. (a) A report required under this code to be submitted to a
committee of the Legislature may be submitted electronically in any
of the following ways:
(1) Providing the committee a digital copy of the report delivered
by electronic means to a person or account designated to receive
reports and in a form acceptable to the committee.
(2) Providing the committee a digital copy of the report stored on
permanent media delivered by first-class mail.
(3) Placing the report on the reporting entity's Internet Web site
so that it is publicly available for a period of no less than three
years. If a report is submitted electronically in accordance with
this paragraph, the committee shall be provided notice of the report
that includes specific instructions on how to access the report and
how to request a hardcopy. The notice shall be delivered by
first-class mail or by electronic means, and addressed to the person
or account designated to receive reports and in a form acceptable to
the committee.
(b) This section shall not apply to reports required under
Sections 38.5, 10089.13, 10965.9, and 11885, of the Insurance Code.
SEC. 2. Section 11629.85 of the
Insurance Code is amended to read:
11629.85. (a) On or before March 1 of each year, the commissioner
shall prepare and propose a plan to the Senate Committee on
Banking, Finance, and Insurance and the Assembly Committee
on Insurance setting forth the methods the commissioner intends to
implement to inform households eligible for the program about the
availability of low-cost automobile insurance. To be eligible for
funding through the budget process, the plan shall be reviewed by the
Senate Committee on Banking, Finance, and
Insurance and the Assembly Committee on Insurance. The information
required under subdivision (c) shall also be provided to the Senate
Committee on Transportation and Housing and the Assembly Committee on
Transportation.
(b) The plan shall include, at a minimum, a brief description of
methods proposed to be used, anticipated costs, sources of revenue,
goals, targets, objectives, and a justification of the proposed
methods. The plan shall also explain how the department proposes to
work in cooperation with the California Automobile Assigned Risk
Plan, the social service departments in eligible counties, the
Department of Motor Vehicles, and community-based organizations in
order to inform eligible households of the existence of the program.
(c) The plan shall also include all of the following:
(1) The commissioner's determination regarding whether the program
has been successful, based on the criteria specified in subdivision
(d), and an explanation regarding that success or lack thereof.
(2) In cooperation with the California Automobile Assigned Risk
Plan, structural characteristics of the program that may require
statutory revision in order for the program to succeed or to improve
upon existing success.
(3) Impediments to success of the program that can reasonably be
overcome by revision to the strategies adopted by the department.
(4) A detailed explanation of the department's use for the program
of funds assessed pursuant to Section 1872.81.
(5) For the previous calendar year, a list of the total low-cost
auto premium for each county in which the program was available.
(d) The program is successful if the following occur:
(1) The program generated sufficient premiums to cover losses
incurred under policies issued under the program, and expenses
incurred by the program, as calculated pursuant to subdivision (c) of
Section 11629.72.
(2) The program served the public purpose of offering access to
automobile insurance to otherwise underserved communities in the
program areas.
(3) The program offered access to automobile insurance to
previously uninsured motorists seeking affordable coverage in the
program areas.
(4) The program's outreach efforts lead uninsured motorists to
contact a producer, and the driver obtains any auto insurance policy
that complies with California law.
(e) Any written or oral advertisements, including, but not limited
to, paid or unpaid commercial or noncommercial advertising, by the
department with reference to the low-cost automobile insurance
program shall reference the department and shall not reference the
commissioner by name or office, or include the commissioner's voice,
image, or likeness. The department shall not participate with any
nongovernmental entity that produces or intends to produce
advertisements or educational material that include the name of the
commissioner or his or her voice, image, or likeness, and that are
intended to make eligible households aware of the existence of
low-cost automobile insurance.
SEC. 3. Section 13902 of the Insurance
Code is amended to read:
13902. (a) Any insurance pool, established pursuant to this
division, may be organized as a nonprofit corporation, limited
liability company, partnership, or trust, whether organized under the
laws of this state or another state or operating in another state.
(b) Any insurance pool established pursuant to this division shall
have initial pooled resources of not less than two million five
hundred thousand dollars ($2,500,000) in the form of cash or cash
equivalents.
(c) Any insurance pool established pursuant to this division shall
maintain adequate reinsurance to protect against its risks.
(d) Any insurance pool established pursuant to this division shall
furnish a copy of the pool's annual audited financial statement and
most recent actuarial review, by first-class mail or by any other
method of delivery, including electronic transmission, to the
Assembly Committee on Housing and Community Development, the Assembly
Committee on Insurance, the Senate Committee on Banking,
Finance, and Insurance, and the Senate Committee on
Transportation and Housing within 180 days of the close of the pool's
fiscal year. If, in the period of time since the last submittal
required by this subdivision, any of the following has occurred, the
transmittal letter accompanying the annual audited financial
statement and most recent actuarial review shall so indicate and
shall provide a brief description of each matter:
(1) There has been a change to the pool's plan of financing,
management, or operation, including any material amendment to any of
those plans.
(2) A claims audit report has been filed with any regulatory body
with respect to the pool.
(3) A report of examination issued by any regulatory body with
respect to the pool has been received.
(4) There has been a material change in the scope of the
regulation of the pool by other states in which the pool operates.
SECTION 1. Section 116 of the Insurance Code is
amended to read:
116. (a) Automobile insurance includes insurance of automobile
owners, users, dealers, or others having insurable interests therein,
against hazards incident to ownership, maintenance, operation, and
use of automobiles, other than loss resulting from accident or
physical injury, fatal or nonfatal, to, or death of, any natural
person.
(b) Automobile insurance also includes a contract of warranty or
guaranty that promises service, maintenance, parts replacement,
repair, money, or any other indemnity in event of loss of or damage
to a motor vehicle or a trailer, as defined by Section 630 of the
Vehicle Code, or any part thereof from any cause, including loss of
or damage to or loss of use of the motor vehicle or trailer by reason
of depreciation, deterioration, wear and tear, use, obsolescence, or
breakage if made by a warrantor or guarantor who is doing an
insurance business.
(c) Automobile insurance also includes an agreement that promises
repair or replacement of a motor vehicle, or part thereof, after a
mechanical or electrical breakdown, at either no cost or a reduced
cost for the agreement holder. However, automobile insurance does not
include a vehicle service contract subject to Part 8 (commencing
with Section 12800) of Division 2, or an agreement deemed not to be
insurance under that part.
(d) The doing or proposing to do business in substance equivalent
to the business described in this section in a manner designed to
evade the provisions of this section is the doing of an insurance
business.