Amended in Assembly June 18, 2014

Amended in Senate April 22, 2014

Amended in Senate April 2, 2014

Senate Bill No. 1273

Introduced by Senator Lara

(Coauthor: Senator Correa)

February 21, 2014

An act to amend Sections 11629.7, 11629.71, 11629.72, 11629.73, 11629.745, 11629.75, 11629.76, 11629.77, 11629.81, begin delete 11629.84,11629.85, and 11629.87 of end delete begin insert 11629.84, 11629.85, and 11629.86 of, and to repeal and add Section 11629.87 of, end insert the Insurance Code, relating to insurance.

LEGISLATIVE COUNSEL’S DIGEST

SB 1273, as amended, Lara. Insurance: low-cost automobile insurance program.

(1) Existing law establishes within the California Automobile Assigned Risk Plan (CAARP) a low-cost automobile insurance program for all counties in California, until January 1, 2016, in order to provide a means for eligible consumers to buy automobile insurance, as specified. The parameters of the program, include, but are not limited to, value limits for the insured vehicle, initial ratesetting for certain counties, a surcharge for specified high-risk drivers, eligibility, sales commissions set at the rate CAARP pays for private passenger nonfleet risks, cancellation restrictions, begin insert rate and surcharge setting restrictions, end insert and reporting requirements. begin insert Existing law limits the premium financing arrangements under the program to those offered by CAARP and one under which the insured pays no more than 15% of the policy cost initially followed by 6 payments. end insert

This bill would revise and recast the parameters of the program by, among other things, deleting provisions that limit the initial implementation of the program to specified counties and that require the Insurance Commissioner to make a need-based assessment as to implementation in all other counties, begin delete and deleting end delete begin insert increasing end insert the limits on the value of an automobile that can be insured through the program begin insert , and authorizing that value to be determined by a method adopted by CAARP and approved by the Commissioner end insert . The bill would extend the repeal date begin insert of the program end insert to January 1, 2020. The bill would also expand the surcharge and eligibility requirements to include drivers with fewer than 3 years of driving history, including a person who operates a motor vehicle with a specified type of driver’s license, or drivers who have not been continually licensed for the past 3 years. begin insert The bill would require, after the January 1, 2017, rate filing, that subsequent rate filings be mandatory if the rate indication is a change of greater than 7% from the previous filing, or at the discretion of the CAARP Advisory Committee if the rate indication is a change of less than 7%. The bill would allow additional premium payment plan end insert begin insert s, subject to approval by the commissioner, including one under which the insured pays no more than 20% of the policy end insert begin insert cost initially followed by 7 payments. end insert

(2) Existing law requires an agent or broker, referred to as a producer, to inform every new prospective automobile insurance policyholder who requests specified information that the low-cost automobile insurance policy may be available for qualifying motorists. Under existing law, if a consumer requests more information about the program from a producer who is not certified under the plan, that producer is required to provide the consumer with a toll-free telephone number for the plan as an alternative coverage option for the consumer.

This bill would allow those producers to alternatively provide the consumer with the begin delete programs’s end delete begin insert program’s end insert Internet Web site.

(3) Under existing law, a certified producer who issues a low-cost automobile insurance policy pursuant to the program is entitled to the same commission rate as is paid by the plan for private passenger, nonfleet risks.

This bill would instead entitle those certified producers to begin delete an unspecified percentage rate of commission. The bill would require the plan and an insurance carrier to notify producers of pending policy cancellation, allow a consumer to reinstate a policy in lieu of canceling a policy that has been canceled for nonpayment of premium, to accept payment by check or money order, to allow a consumer or producer to make a down payment and installment payments by debit card or credit card either by telephone or through its Internet Web site. end delete begin insert a commission of 12% or $50, whichever is greater. The bill would require, by January 1, 2016, the CAARP Advisory Committee to report to the commissioner on a proposal, subject to approval by the commissioner, to allow a consumer to reinstate, in lieu of canceling, all policies that have been canceled for nonpayment of premium, and on a proposal, subject to approval by the commissioner, to allow consumers to keep policies in force by making installment payments by debit card or credit card. The bill would also require, by January 1, 2017, the CAARP Advisory Committee to report to the commissioner on a proposal, subject to approval by the commissioner, to allow access to the program for applicants 16 to 18 years of age who are economically independent and meet other eligibility guidelines, and for families who have an adult driver covered under the program and end insert begin insert a driver 16 to 18 years of age in the household. end insert

(4) Existing law requires the plan to report to the Legislature annually on the status of the program, and requires the commissioner to make an annual report to specified committees of the Legislature.

This bill would instead require the plan to make the former report to the commissioner and to include specified data in that report, and would require the commissioner to combine the 2 reports and submit the combined report to the Legislature on or before March 15 annually.

(5) Existing law requires, in order to be eligible for funding through the budget process, that the plan be reviewed by specified committees of the Legislature.

This bill would delete that provision.

(6) Existing law requires the plan, subject to the commissioner’s approval, to establish and maintain an Internet Web site that provides members of the public with an option for either a referral to a list of certified agents or brokers, as specified, or an assignment to a randomly selected certified agent or broker, as specified.

begin delete

This bill would, instead require the plan’s Internet Web site to provide consumers both of those options and the additional option to apply directly on the Internet Web site. The bill would require the plan and an insurance carrier to establish a data system, as specified. The bill would also delete obsolete provisions and make conforming changes.

end delete begin insert

This bill would delete the above provisions and instead require the Department of Insurance, by December 31, 2015, in consultation with the CAARP Advisory Committee, to establish a consumer-oriented Internet Web site that fulfills specified requirements, and would require by December 31, 2015, the CAARP Advisory Committee, subject to approval by the commissioner, to develop a proposal for interested consumers to apply for the program without physically visiting the office of a producer, as provided.

end insert begin insert

(7) This bill would make conforming changes.

end insert

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 11629.7 of the Insurance Code is
amended to read:

11629.7.  

(a) There is established, within the California
Automobile Assigned Risk Plan established under Section 11620,
a low-cost automobile insurance program for all counties in
California.

(b) The commissioner, after a public hearing, shall approve or
issue a reasonable plan for the equitable apportionment, among
insurers required to participate in the California Automobile
Assigned Risk Plan established under Section 11620, of persons
who are eligible to purchase through the program a low-cost
automobile insurance policy, as described in Section 11629.71.
The program shall be conducted in conjunction with the California
Automobile Assigned Risk Plan established under Section 11620.

SEC. 2.  

Section 11629.71 of the Insurance Code is amended
to read:

11629.71.  

A low-cost automobile insurance policy for purposes
of the program established under this article shall have all of the
following attributes:

(a) The policy shall offer coverage in the amount of ten thousand
dollars ($10,000) for bodily injury to, or death of, each person as
a result of any one accident and, subject to that limit as to one
person, the amount of twenty thousand dollars ($20,000) for bodily
injury to, or death of all persons as a result of any one accident,
and the amount of three thousand dollars ($3,000) for damage to
property of others as a result of any one accident.

(b) The coverage required by Section 11580.2 shall be made
available to the consumer. However, an insurer may charge a
premium for that coverage in addition to the premium set forth in
Section 11629.72. Notwithstanding the coverage amounts required
by Section 11580.2 and Section 16056 of the Vehicle Code,
uninsured motorist coverage issued in conjunction with a low-cost
automobile policy under the program, with coverage limits at least
equal to the limits of liability in the underlying low-cost automobile
policy, shall satisfy the requirements of Section 11580.2 and the
financial responsibility requirements of Sections 4000.37, 16021,
and 16431 of the Vehicle Code.

(c) Medical payments coverage shall be made available to the
consumer. However, an insurer may charge a premium for that
coverage in addition to the premium set forth in Section 11629.72.

(d) The policy shall have an initial term of one year, renewable
on an annual basis thereafter.

(e) The policy shall cover the person named in the policy, and
to the same extent that insurance is provided to the named insured,
any other person using the automobile, provided the use is with
his or her permission, express or implied, and within the scope of
that permission, except that the policy shall not cover members of
the named insured’s household who do not satisfy the requirements
of subdivisions (b) to (e), inclusive, of Section 11629.73.

begin insert

(f) The policy shall provide coverage for an automobile with a
value of twenty-five thousand dollars ($25,000) or less, as
evidenced by the value given to the automobile by the Department
of Motor Vehicles in assessing vehicle license fees, or another
method of determining market value adopted by the California
Automobile Assigned Risk Plan Advisory Committee (CAARP
Advisory Committee) and approved by the commissioner.

end insert

SEC. 3.  

Section 11629.72 of the Insurance Code is amended
to read:

11629.72.  

(a) The annual rate offered under the program for
each of the counties in California shall be established at a date
according to the discretion of the commissioner. Surcharges, as a
percentage of the base rate, shall be added to the base rate and that
percentage shall be set at the discretion of the commissioner, if
the named insured or a resident of the household of the named
insured will be a driver of the automobile covered under the
low-cost policy, and is either or both of the following:

(1) An unmarried male between 19 and 24 years of age.

(2)  begin delete To end delete begin insert A person 19 years of age or older to end insert whom any of the
following applies:

(A) Operates a vehicle with a driver’s license issued by the
Department of Motor Vehicles pursuant to Section 12801.9 of the
Vehicle Code and has fewer than three years of driving history.

(B) Has fewer than three years of driving history.

(C) Has not been continually licensed to drive for the past three
years.

(b) (1)  begin delete In addition to existing premium installment options
offered by the California Automobile Assigned Risk Plan under
Article 4 (commencing with Section 11620), the plan shall also end delete
begin insert The California Automobile Assigned Risk Plan shall end insert make available
to an insured under the program begin insert , subject to approval by the
commissioner, end insert a premium installment option pursuant to which an
insured is required to pay not more than begin delete 15 end delete begin insert 20 end insert percent of the total
policy cost upon issuance of the low-cost policy, followed
thereafter by begin delete six end delete begin insert seven end insert other payments. begin insert The plan may make
additional payment plans available, subject to approval by the
commissioner. end insert

begin delete

(2) Beginning on January 1, 2015, the commissioner may
approve or issue new installment plans in addition to or replacing
those offered pursuant to paragraph (1).

end delete begin delete

(3)

end delete

begin insert (2) end insert  No other premium financing arrangement shall be permitted.

(c) Rates for policies issued under the program in each county
or city and county shall be reviewed and revised as follows:

(1) Rates shall be sufficient to cover (A) losses incurred under
policies issued under the program, and (B) expenses, including,
but not limited to, all reasonable and necessary expenses such as
the costs of administration, underwriting, taxes, commissions, and
claims adjusting, that are incurred due to participation in the
program. For purposes of this paragraph, “losses incurred” means
claims paid, claims incurred and reported, and claims incurred but
not yet reported. In assessing loss reserves, the commissioner shall
only allow loss reserves that are estimated from actual losses in
the program or comparable data by a licensed statistical agent, as
adjusted to reflect coverage provided under the program.

(2) Rates shall be set so as to result in no projected subsidy of
the program by those policyholders of insurers issuing policies
under the program who are not participants in the program.

(3) Rates shall be set with respect to the program so as to result
in no projected subsidy by policyholders in one county of
policyholders in any of the other counties.

(4)  begin insert (A) end insert begin insert   end insert Commencing on January 1, 2015, and begin delete no less than
every three years thereafter, end delete begin insert annually thereafter through January
1, 2017, end insert the California Automobile Assigned Risk Plan shall submit
the loss and expense data, together with a proposed rate and the
surcharge authorized by subdivision (a) for the low-cost automobile
policy for the program, to the commissioner for approval in
accordance with this chapter. The commissioner shall act on the
recommendation within 90 days.

begin insert

(B) After the January 1, 2017, rate filing, subsequent rate filings
are mandatory if the rate indication is a change of greater than 7
percent from the previous filing, or at the discretion of the CAARP
Advisory Committee if the rate indication is a change of less than
7 percent.

end insert

SEC. 4.  

Section 11629.73 of the Insurance Code is amended
to read:

11629.73.  

A low-cost automobile insurance policy under the
program shall only be available for purchase by persons who satisfy
the following eligibility requirements:

(a) The person shall be in a household with an annual gross
household income that does not exceed 250 percent of the federal
poverty level, as defined in Part 6.2 (commencing with Section
12693) or as defined in an equivalent manner that is approved by
the commissioner.

(b) The person shall be no less than 19 years of age and have
been continuously licensed to drive an automobile for the previous
three years, except that a person who has not been continually
licensed to drive or has fewer than three years of driving history
may qualify for the surcharge under subdivision (a) of Section
11629.72.

(c) The person shall have not more than one of either, but not
both, of the following within the previous three years:

(1) A property damage only accident in which the driver was
principally at fault.

(2) A point for a moving violation.

(d) The person shall not have on record within the previous
three years, an at-fault accident involving bodily injury or death.

(e) The person shall not have a felony or misdemeanor
conviction for a violation of the Vehicle Code on his or her motor
vehicle record.

(f) The person shall not be a college student claimed as a
dependent of another person for federal or state income tax
purposes.

SEC. 5.  

Section 11629.745 of the Insurance Code is amended
to read:

11629.745.  

(a) An agent or broker, hereafter referred to as a
producer, who conducts business in a county in which a low-cost
automobile insurance policy is available pursuant to this article
shall inform every new prospective automobile insurance
policyholder who requests a minimum limits or basic limits
insurance policy, or coverage to meet California’s minimum limits
automobile insurance requirements, that the low-cost automobile
insurance policy may be available for qualifying motorists. The
information may be provided orally if the producer has been
contacted by telephone, or in writing, but shall be communicated
to the policyholder prior to the application for automobile insurance
coverage in the language in which the producer has otherwise
communicated with the consumer.

(b) If the consumer requests more information about the low-cost
program the producer shall do either of the following:

(1) If the producer is California Automobile Assigned Risk Plan
certified, provide the consumer with an explanation in an
information pamphlet produced by the California Automobile
Assigned Risk Plan and approved and provided by the Department
of Insurance of the qualifications, begin delete cost end delete begin insert cost, end insert and coverage provided
by the policy. If the consumer qualifies for the low-cost policy and
wishes to purchase the policy, the California Automobile Assigned
Risk Plan certified producer shall provide the application and,
upon completion, submit the application, supporting documents,
and the applicant’s certification to the California Automobile
Assigned Risk Plan. The submittal of the California Automobile
Assigned Risk Plan application may be in addition to any other
coverage offered or applied for through the producer.

(2) If the producer is not California Automobile Assigned Risk
Plan certified, the producer shall provide the consumer with the
toll-free telephone number for the California Automobile Assigned
Risk Plan or the program’s Internet Web site address as an option
to coverage offered by the producer.

SEC. 6.  

Section 11629.75 of the Insurance Code is amended
to read:

11629.75.  

(a) A certified producer shall provide to an applicant
for a low-cost automobile insurance policy under this article a
notice relating to coverage under the policy. The notice shall be
provided in a separate document at the time of application, and
include the following statement in 14-point boldface type:

“NOTICE

INSURANCE COVERAGE PROVIDED IN THE POLICY YOU
ARE BUYING CONTAINS REDUCED LIABILITY
COVERAGE FOR PERSONAL INJURIES OR PROPERTY
DAMAGE RESULTING FROM THE OPERATION OF THE
INSURED VEHICLE. IF LOSSES FROM AN AUTOMOBILE
ACCIDENT EXCEED THE COVERAGE PROVIDED BY THIS
POLICY, YOU CAN BE HELD PERSONALLY LIABLE AND
RESPONSIBLE FOR THOSE LOSSES.

THIS POLICY PROVIDES LIABILITY COVERAGE FOR
INJURIES OR DEATH CAUSED TO OTHER PERSONS IN
THE TOTAL AMOUNT OF TEN THOUSAND DOLLARS
($10,000) PER PERSON IN ANY ONE ACCIDENT, AND UP
TO A TOTAL AMOUNT OF TWENTY THOUSAND DOLLARS
($20,000) FOR ALL PERSONS IN ANY ONE ACCIDENT. THE
POLICY ALSO PROVIDES UP TO A TOTAL AMOUNT OF
THREE THOUSAND DOLLARS ($3,000) IN LIABILITY
COVERAGE FOR PROPERTY DAMAGE IN ANY ONE
ACCIDENT. IF YOU WANT MORE INSURANCE COVERAGE,
YOU MUST REQUEST A DIFFERENT POLICY.

THIS POLICY ALSO DOES NOT COVER DAMAGE TO YOUR
OWN VEHICLE, LOSSES RESULTING FROM YOUR BODILY
INJURY OR DEATH, OR COVERAGE FOR LOSSES CAUSED
BY AN UNINSURED OR UNDERINSURED DRIVER.
HOWEVER, THESE OTHER COVERAGES MAY BE
AVAILABLE AT EXTRA COST THROUGH OTHER
INSURERS.

THIS POLICY MAY ALSO CONTAIN UNINSURED
MOTORIST BODILY INJURY COVERAGE IN THE TOTAL
AMOUNT OF TEN THOUSAND DOLLARS ($10,000) PER
PERSON IN ANY ONE ACCIDENT AND UP TO A TOTAL
AMOUNT OF TWENTY THOUSAND DOLLARS ($20,000)
FOR ALL PERSONS IN ANY ONE ACCIDENT, IF YOU SO
CHOOSE. IN ADDITION, THIS POLICY MAY ALSO
CONTAIN MEDICAL PAYMENTS COVERAGE IN THE
AMOUNT OF ONE THOUSAND DOLLARS ($1,000) PER
PERSON IN ANY ONE ACCIDENT, IF YOU SO CHOOSE.

THIS POLICY DOES NOT COVER ANY OTHER DRIVER IN
YOUR HOUSEHOLD WHO:

(a) IS UNDER 19 YEARS OF AGE; OR

(b) HAS LESS THAN 3 YEARS OF CONTINUOUSLY
LICENSED DRIVING EXPERIENCE (UNLESS THE POLICY
INCLUDES A SURCHARGE FOR THIS DRIVER); OR

(c) HAS MORE THAN ONE OF EITHER, OR BOTH, OF THE
FOLLOWING:

--A PROPERTY DAMAGE ONLY ACCIDENT IN WHICH
THE DRIVER WAS PRINCIPALLY AT FAULT.

--A POINT FOR A MOVING VIOLATION; OR

(d) HAS IN THE PREVIOUS 3 YEARS AN AT-FAULT
ACCIDENT INVOLVING BODILY INJURY OR DEATH; OR

(e) HAS A FELONY OR MISDEMEANOR CONVICTION
FROM A VIOLATION OF THE VEHICLE CODE ON HIS OR
HER MOTOR VEHICLE RECORD.”

(b) When the certified producer establishes delivery of the
disclosure form specified in subdivision (a) by obtaining the
signature of the applicant or insured, there shall be a conclusive
presumption that the certified producer has complied with the
disclosure requirements of this section.

SEC. 7.  

Section 11629.76 of the Insurance Code is amended
to read:

11629.76.  

(a) For a low-cost automobile insurance policy
issued pursuant to the program, certified producers shall be entitled
to a commission rate of begin delete ____ percent. end delete begin insert 12 percent or fifty dollars
($50), whichever is greater. end insert

(b) Notwithstanding subdivision (a), the commissioner may at
any time establish a commission for a low-cost automobile
insurance policy issued pursuant to the program and may make
the commission effective on any policy originated within an entire
year, or any portion of a year, as is needed to provide an incentive
to certified producers to sell low-cost automobile insurance to
eligible applicants. The commissioner shall not establish a
commission pursuant to this subdivision if the commissioner
determines that setting the commission rate will result in a lower
commission than the commission paid by the California
Automobile Assigned Risk Plan for private passenger, nonfleet
risks under Article 4 (commencing with Section 11620).

(c) No other fees of any kind may be charged or collected
pursuant to this section and the sale of a low-cost policy under this
article shall not be conditioned on the purchase of any other product
or service.

SEC. 8.  

Section 11629.77 of the Insurance Code is amended
to read:

11629.77.  

(a) A low-cost automobile insurance policy issued
pursuant to the program shall be canceled only for the following
reasons:

(1) Nonpayment of premium.

(2) Fraud or material misrepresentation affecting the policy or
the insured.

(3) The purchase of additional automobile liability insurance
coverage in violation of subdivision (a) of Section 11629.78.

(4) The purchase or maintenance of automobile liability
insurance coverage other than a low-cost policy for any additional
vehicles in the insured’s household, in violation of subdivision (b)
of Section 11629.78.

begin delete

(b) The California Automobile Assigned Risk Plan and an
insurance carrier shall notify producers of pending policy
cancellations. The plan and an insurance carrier shall allow a
consumer to reinstate, in lieu of canceling, all policies that have
been canceled for nonpayment of premium. The plan and an
insurance carrier shall accept payment by check or money order,
and shall allow a consumer or producer to make a down payment
and installment payments by debit card or credit card, either by
telephone or through its Internet Web site.

end delete begin delete

(c)

end delete

begin insert (b) end insert  A policy shall be nonrenewed only for the following reasons:

(1) A substantial increase in the hazard insured against.

(2) The insured no longer meets the applicable eligibility
requirements. In this regard, the eligibility of an insured shall be
recertified by the California Automobile Assigned Risk Plan after
the first year of eligibility, and annually thereafter by the insurer
that issued the policy.

begin insert

(c) By January 1, 2016, the CAARP Advisory Committee shall
report to the commissioner on a proposal, subject to approval by
the commissioner, to allow a consumer to reinstate, in lieu of
canceling, all policies that have been canceled for nonpayment of
premium, and on a proposal, subject to approval by the
commissioner, to allow consumers to make installment payments
by debit card or credit card. The CAARP Advisory Committee
shall also report, by January 1, 2017, on a proposal, subject to
approval by the commissioner, to allow access to the program for
applicants 16 to 18 years of age who are economically independent
and meet other eligibility guidelines, and also for families who
have an adult driver covered under the program and a driver 16
to 18 years of age in the household.

end insert

SEC. 9.  

Section 11629.81 of the Insurance Code is amended
to read:

11629.81.  

(a) The California Automobile Assigned Risk Plan
shall report to the commissioner on an annual basis, and at those
additional times as it deems prudent, on the status of the program.
The report shall include data regarding new policies, renewed
policies, and policy cancellations or nonrenewals.

(b) The department shall combine the report pursuant to
subdivision (a) with the report required by Section 11629.85 and
submit the combined report to the Legislature on or before March
15 of each year.

(c) A report submitted pursuant to subdivision (b) shall be
submitted in compliance with Section 9795 of the Government
Code.

SEC. 10.  

Section 11629.84 of the Insurance Code is amended
to read:

11629.84.  

This article shall remain in effect only until January
1, 2020, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2020, deletes or extends
that date.

SEC. 11.  

Section 11629.85 of the Insurance Code is amended
to read:

11629.85.  

(a) Notwithstanding Section 10231.5 of the
Government Code, on or before March 15 of each year, the
commissioner shall prepare and propose a plan in a report to the
Legislature setting forth the methods the commissioner intends to
implement to inform households eligible for the program about
the availability of low-cost automobile insurance.

(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 agencies, 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 for the
previous fiscal year.

(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.

(f) A report submitted pursuant to subdivision (a) shall be
submitted in compliance with Section 9795 of the Government
Code.

begin delete

SEC. 12.  

Section 11629.87 of the Insurance Code is amended
to read:

11629.87.  

(a) Subject to the approval of the commissioner,
the California Automobile Assigned Risk Plan shall establish and
maintain an Internet Web site that shall provide members of the
public with an option for each of the following:

(1) Referral to a list of certified agents or brokers with an office
in the same geographic area as the consumer who may be contacted
to purchase a low-cost automobile insurance policy. This list shall
contain the name, address, telephone number, and, if available,
the email address and Internet Web site of those agents or brokers.

(2) Assignment to a randomly selected certified agent or broker
in the same geographic area as the consumer who can be accessed
online to process and accept an application to purchase a low-cost
automobile insurance policy. The assigned agent or broker shall
be subject to the conditions specified in Section 11629.86.

(3) The ability to apply directly on the Internet Web site.

(b) The plan may, with the approval of the department, authorize
the use, for a designated period of time, of the department-owned
Internet Web site domain name http://www.mylowcostauto.com,
or any other relevant domain names controlled by the Department
of Insurance, for the purposes of this section and Section 11629.86.

(c) The plan shall ensure that the Internet Web site does all of
the following:

(1) Provides all disclosures and other information required by
law that would otherwise be provided by a producer.

(2) Effectively educates consumers about the eligibility
requirements, the benefits, and the limits of the low-cost
automobile insurance policy.

(3) Describes or establishes a process to collect any documents
that are necessary for determining qualification for the policy.

(4) Establishes a process to electronically certify the information
provided by the consumer.

(5) Maintains safeguards to ensure that consumer information
transmitted through that Internet Web site is secure.

(6) Provides the physical address of the producer and the
telephone number and e-mail of the producer.

(7) Provides the contact information for the Consumer Services
Division of the department.

(8) Adheres to any other rules and regulations adopted by the
Department of Insurance to promote the purposes of this section
and Section 11629.86.

(9) Notifies the consumer that if he or she does not qualify for
the low-cost automobile insurance policy that other policies may
be available from producers or insurers. Directs the consumer to
the department’s auto insurance premium comparison Internet
Web page.

(d) The Internet Web site shall not be made available to the
public until the commissioner has made a determination that it
adequately provides all of the necessary information a consumer
would need in order to apply to purchase the policy.

(e) The Internet Web site shall be constructed to authorize the
consumer to forward the application, supporting documents, and
the consumer’s certification to the plan.

(f) The Internet Web site shall accept payment by credit or debit
card or other form of electronic payment the department determines
to be appropriate. It shall also provide a mechanism for payment
by check.

(g) The Internet Web site shall be made available in English
and Spanish and in as many additional languages as feasible. The
English and Spanish language sites shall be made available to the
public as soon as possible, irrespective of whether other versions
are finalized.

(h) The plan may request, and the department may include in
its plan submitted pursuant to Section 11629.85, that up to one
hundred thousand dollars ($100,000) from the department’s
existing consumer outreach fund be made available for the
development of the Internet Web site. Electronic signatures shall
have the same effect as pen-on-paper signatures for the purposes
of this program. The staff answering the plan’s toll-free telephone
number may transfer the consumer directly to a producer who may
sell a policy to the consumer.

(i) The plan and an insurance carrier shall establish a data system
whereby renewed policies, policy cancellations, and nonrenewals
can be tracked, both by aggregate numbers and by individual
consumer. The department shall have access to both the aggregate
and individual consumer data for research and outreach purposes.

end delete

begin insert

begin insert SEC. 12. end insert   

end insert

begin insert Section 11629.86 of the end insert begin insert Insurance Code end insert begin insert is amended
to read: end insert

11629.86.  

(a) A California Automobile Assigned Risk Plan
certified producer may accept and process an application to
purchase a low-cost automobile insurance policy under this
program through an Internet Web site, in accordance with this
section and regulations adopted by the Department of Insurance
pursuant to this section.

(b) Any producer seeking certification to accept and process
low-cost automobile insurance policy applications through an
Internet Web site shall notify the California Automobile Assigned
Risk Plan of its intentions to do so prior to accepting any
applications to the begin delete program, and the producer’s Internet Web site
shall comply with the rules established by subdivision (c) of
Section 11629.87. end delete begin insert program. end insert

(c) Prior to accepting payment and upon transmitting any
information from the consumer, the producer’s Internet Web site
shall include a clear explanation of whether the consumer will be
afforded insurance coverage upon payment and, if not, when the
consumer will receive coverage and how he or she will receive
notice of coverage.

(d) A producer accepting and processing applications through
an Internet Web site shall be entitled to the same commission
available to a producer selling a low-cost automobile insurance
policy by any other means acceptable under the law.

(e) Any producer accepting and processing applications through
an Internet Web site is subject to the laws and rules governing this
program and is liable for any errors and omissions related to the
transaction of insurance to the same extent as a producer selling
a low-cost automobile insurance policy by any other means
acceptable under the law.

(f) Any consumer information required by this article may be
accepted by electronic means after the Department of Insurance
adopts regulations implementing this section and only if the
information is submitted in accordance with those regulations.

(g) The California Automobile Assigned Risk Plan shall
coordinate with the Department of Insurance in order to develop
a system for receiving and assigning policies issued through
Internet Web sites.

(h) The California Automobile Assigned Risk Plan may request,
and the Department of Insurance may include in its plan submitted
pursuant to Section 11629.85, up to fifty thousand dollars ($50,000)
from the department’s existing consumer outreach fund to be used
for the sole purpose of implementing this section.

begin insert

begin insert SEC. 13. end insert   

end insert

begin insert Section 11629.87 of the end insert begin insert Insurance Code end insert begin insert is repealed. end insert

begin delete

11629.87.  

(a) Subject to the approval of the commissioner,
the California Automobile Assigned Risk Plan shall establish and
maintain, or contract with an entity to establish and maintain, an
Internet Web site that shall provide members of the public with
an option for either of the following:

(1) Referral to a list of certified agents or brokers with an office
in the same geographic area as the consumer who may be contacted
to purchase a low-cost automobile insurance policy. This list shall
contain the name, address, telephone number, and, if available,
the e-mail address and Internet Web site of those agents or brokers.

(2) Assignment to a randomly selected certified agent or broker
in the same geographic area as the consumer who can be accessed
online to process and accept an application to purchase a low-cost
automobile insurance policy. The assigned agent or broker shall
be subject to the conditions specified in Section 11629.86.

(b) The plan may, with the approval of the Department of
Insurance, authorize the use, for a designated period of time, of
the department-owned Internet Web site domain name
http://www.mylowcostauto.com, or any other relevant domain
names controlled by the Department of Insurance, for the purposes
of this section and Section 11629.86.

(c) The plan shall ensure that the Internet Web site does all of
the following:

(1) Provides all disclosures and other information required by
law that would otherwise be provided by a producer.

(2) Effectively educates consumers about the eligibility
requirements, the benefits, and the limits of the low-cost
automobile insurance policy.

(3) Describes or establishes a process to collect any documents
that are necessary for determining qualification for the policy.

(4) Establishes a process to electronically certify the information
provided by the consumer.

(5) Maintains safeguards to ensure that consumer information
transmitted through that Internet Web site is secure.

(6) Provides the physical address of the producer and the
telephone number and e-mail of the producer.

(7) Provides the contact information for the Consumer Services
Division of the Department of Insurance.

(8) Adheres to any other rules and regulations adopted by the
Department of Insurance to promote the purposes of this section
and Section 11629.86.

(9) Notifies the consumer that if he or she does not qualify for
the low-cost automobile insurance policy that other policies may
be available from producers or insurers. Directs the consumer to
the Department of Insurance’s auto insurance premium comparison
Internet Web page.

(d) The Internet Web site shall not be made available to the
public until the commissioner has made a determination that it
adequately provides all of the necessary information a consumer
would need in order to apply to purchase the policy.

(e) The Internet Web site shall be constructed to authorize the
plan-certified producer to forward the application, supporting
documents, and the applicant’s certification to the plan.

(f) The Internet Web site shall accept payment by credit or debit
card or other form of electronic payment the Department of
Insurance determines to be appropriate. It shall also provide a
mechanism for payment by check.

(g) The Internet Web site shall be made available in English
and Spanish and in as many additional languages as feasible. The
English and Spanish language sites shall be made available to the
public as soon as possible, irrespective of whether other versions
are finalized.

(h) Notwithstanding any provision of Chapter 2 (commencing
with Section 10290) of Part 2 of Division 2 of the Public Contract
Code, if the plan chooses to contract with an entity to establish
and maintain the Internet Web site, the plan shall solicit and
consider the contract via an open, competitive bid process;
however, it shall not issue a request for proposals until the
Department of Insurance has approved the request. The contract
period shall not extend more than three years. Twelve months
before the expiration of the contract, the plan shall determine
whether to renew the contract or solicit bids for a new contract.

(i) The plan may request, and the Department of Insurance may
include in its plan submitted pursuant to Section 11629.85, that
up to one hundred thousand dollars ($100,000) from the
department’s existing consumer outreach fund be made available
for the development of the Internet Web Site.

end delete

begin insert

begin insert SEC. 14. end insert   

end insert

begin insert Section 11629.87 is added to the end insert begin insert Insurance Code end insert begin insert , to
read: end insert

begin insert

begin insert 11629.87. end insert   

(a) The department shall, by December 31, 2015,
in consultation with the CAARP Advisory Committee, establish
and maintain a consumer-oriented Internet Web site that provides
all of the following:

(1) Referral to a list of certified agents or brokers with an office
in the same geographic area as the consumer who may be
contacted to purchase a low-cost automobile insurance policy.

(2) Information about the eligibility requirements, benefits, and
limits of the low-cost automobile insurance policy.

(3) Notification that if a consumer does not qualify for the
low-cost automobile insurance policy, other policies may be
available from producers or insurers, and directing the consumer
to the department’s automobile insurance premium comparison
Internet Web page.

(b) The CAARP Advisory Committee shall develop a proposal,
by December 31, 2015, subject to approval by the commissioner,
for interested consumers to apply for the program without
physically visiting the office of a producer. This proposal may
include the electronic uploading of documents, electronic
signatures, linking eligible hotline callers and Internet Web site
visitors directly to one or more producers, and electronic payments.

end insert