Amended in Assembly June 30, 2014

Amended in Assembly June 18, 2014

Amended in Senate April 22, 2014

Amended in Senate April 2, 2014

Senate BillNo. 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, 11629.84, 11629.85, and 11629.86 of, and to repeal and add Section 11629.87 of, 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, rate and surcharge setting restrictions, and reporting requirements. 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.

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, increasing the limits on the value of an automobile that can be insured through the program, and authorizing that value to be determined by a method adopted by CAARP and approved by thebegin delete Commissioner.end deletebegin insert commissioner.end insert The bill would extend the repeal date of the program 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. 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 plans, subject to approval by the commissioner, including one under which the insured pays no more than 20% of the policy cost initially followed by 7 payments.

(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 program’s 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 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, bybegin delete January 1, 2017,end deletebegin insert July 1, 2016,end insert 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 a driver 16 to 18 years of age in the household.

(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.

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 Advisorybegin delete Committee, subject to approval by the commissioner,end deletebegin insert Committeeend insert to develop a proposalbegin insert, subject to approval by the commissioner,end insert for interested consumers to apply for the program without physically visiting the office of a producer, as provided.

(7) This bill would make conforming changes.

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

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

P4    1

SECTION 1.  

Section 11629.7 of the Insurance Code is
2amended to read:

3

11629.7.  

(a) There is established, within the California
4Automobile Assigned Risk Plan established under Section 11620,
5a low-cost automobile insurance program for all counties in
6California.

7 (b) The commissioner, after a public hearing, shall approve or
8issue a reasonable plan for the equitable apportionment, among
9insurers required to participate in the California Automobile
10Assigned Risk Plan established under Section 11620, of persons
11who are eligible to purchase through the program a low-cost
12automobile insurance policy, as described in Section 11629.71.
13The program shall be conducted in conjunction with the California
14Automobile Assigned Risk Plan established under Section 11620.

15

SEC. 2.  

Section 11629.71 of the Insurance Code is amended
16to read:

17

11629.71.  

A low-cost automobile insurance policy for purposes
18of the program established under this article shall have all of the
19following attributes:

20(a) The policy shall offer coverage in the amount of ten thousand
21dollars ($10,000) for bodily injury to, or death of, each person as
22a result of any one accident and, subject to that limit as to one
23person, the amount of twenty thousand dollars ($20,000) for bodily
24injury to, or death of all persons as a result of any one accident,
25and the amount of three thousand dollars ($3,000) for damage to
26property of others as a result of any one accident.

27(b) The coverage required by Section 11580.2 shall be made
28available to the consumer. However, an insurer may charge a
29premium for that coverage in addition to the premium set forth in
30Section 11629.72. Notwithstanding the coverage amounts required
31by Section 11580.2 and Section 16056 of the Vehicle Code,
32uninsured motorist coverage issued in conjunction with a low-cost
33automobile policy under the program, with coverage limits at least
34equal to the limits of liability in the underlying low-cost automobile
35policy, shall satisfy the requirements of Section 11580.2 and the
36financial responsibility requirements of Sections 4000.37, 16021,
37and 16431 of the Vehicle Code.

P5    1(c) Medical payments coverage shall be made available to the
2consumer. However, an insurer may charge a premium for that
3coverage in addition to the premium set forth in Section 11629.72.

4(d) The policy shall have an initial term of one year, renewable
5on an annual basis thereafter.

6(e) The policy shall cover the person named in the policy, and
7to the same extent that insurance is provided to the named insured,
8any other person using the automobile, provided the use is with
9his or her permission, express or implied, and within the scope of
10that permission, except that the policy shall not cover members of
11the named insured’s household who do not satisfy the requirements
12of subdivisions (b) to (e), inclusive, of Section 11629.73.

13(f) The policy shall provide coverage for an automobile with a
14value of twenty-five thousand dollars ($25,000) or less, as
15 evidenced by the value given to the automobile by the Department
16of Motor Vehicles in assessing vehicle license fees, or another
17method of determining market value adopted by the California
18Automobile Assigned Risk Plan Advisory Committee (CAARP
19Advisory Committee) and approved by the commissioner.

20

SEC. 3.  

Section 11629.72 of the Insurance Code is amended
21to read:

22

11629.72.  

(a) The annual rate offered under the program for
23each of the counties in California shall be established at a date
24according to the discretion of the commissioner. Surcharges, as a
25percentage of the base rate, shall be added to the base rate and that
26percentage shall be set at the discretion of the commissioner, if
27the named insured or a resident of the household of the named
28insured will be a driver of the automobile covered under the
29low-cost policy, and is either or both of the following:

30(1) An unmarried male between 19 and 24 years of age.

31(2) A person 19 years of age or older to whom any of the
32following applies:

33(A) Operates a vehicle with a driver’s license issued by the
34Department of Motor Vehicles pursuant to Section 12801.9 of the
35Vehicle Code and has fewer than three years of driving history.

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

37(C) Has not been continually licensed to drive for the past three
38years.

39(b) (1) The California Automobile Assigned Risk Plan shall
40make available to an insured under the program, subject to approval
P6    1by the commissioner, a premium installment option pursuant to
2which an insured is required to pay not more than 20 percent of
3the total policy cost upon issuance of the low-cost policy, followed
4thereafter by seven other payments. The plan may make additional
5payment plans available, subject to approval by the commissioner.

6(2) No other premium financing arrangement shall be permitted.

7(c) Rates for policies issued under the program in each county
8or city and county shall be reviewed and revised as follows:

9(1) Rates shall be sufficient to cover (A) losses incurred under
10policies issued under the program, and (B) expenses, including,
11but not limited to, all reasonable and necessary expenses such as
12the costs of administration, underwriting, taxes, commissions, and
13 claims adjusting, that are incurred due to participation in the
14program. For purposes of this paragraph, “losses incurred” means
15claims paid, claims incurred and reported, and claims incurred but
16not yet reported. In assessing loss reserves, the commissioner shall
17only allow loss reserves that are estimated from actual losses in
18the program or comparable data by a licensed statistical agent, as
19adjusted to reflect coverage provided under the program.

20(2) Rates shall be set so as to result in no projected subsidy of
21the program by those policyholders of insurers issuing policies
22under the program who are not participants in the program.

23(3) Rates shall be set with respect to the program so as to result
24in no projected subsidy by policyholders in one county of
25policyholders in any of the other counties.

26(4) (A) Commencing on January 1, 2015, and annually
27thereafter through January 1, 2017, the California Automobile
28Assigned Risk Plan shall submit the loss and expense data, together
29with a proposed rate and the surcharge authorized by subdivision
30(a) for the low-cost automobile policy for the program, to the
31commissioner for approval in accordance with this chapter. The
32commissioner shall act on the recommendation within 90 days.

33(B) After the January 1, 2017, rate filing, subsequent rate filings
34are mandatory if the rate indication is a change of greater than 7
35percent from the previous filing, or at the discretion of the CAARP
36Advisory Committee if the rate indication is a change of less than
377 percent.

38

SEC. 4.  

Section 11629.73 of the Insurance Code is amended
39to read:

P7    1

11629.73.  

A low-cost automobile insurance policy under the
2program shall only be available for purchase by persons who satisfy
3the following eligibility requirements:

4(a) The person shall be in a household with an annual gross
5household income that does not exceed 250 percent of the federal
6poverty level, as defined in Part 6.2 (commencing with Section
712693) or as defined in an equivalent manner that is approved by
8the commissioner.

9(b) The person shall be no less than 19 years of age and have
10been continuously licensed to drive an automobile for the previous
11three years, except that a person who has not been continually
12licensed to drive or has fewer than three years of driving history
13may qualify for the surcharge under subdivision (a) of Section
1411629.72.

15(c) The person shall have not more than one of either, but not
16both, of the following within the previous three years:

17(1) A property damage only accident in which the driver was
18principally at fault.

19(2) A point for a moving violation.

20(d) The person shall not have on record within the previous
21three years, an at-fault accident involving bodily injury or death.

22(e) The person shall not have a felony or misdemeanor
23conviction for a violation of the Vehicle Code on his or her motor
24vehicle record.

25(f) The person shall not be a college student claimed as a
26dependent of another person for federal or state income tax
27purposes.

28

SEC. 5.  

Section 11629.745 of the Insurance Code is amended
29to read:

30

11629.745.  

(a) An agent or broker, hereafter referred to as a
31producer, who conducts business in a county in which a low-cost
32automobile insurance policy is available pursuant to this article
33shall inform every new prospective automobile insurance
34policyholder who requests a minimum limits or basic limits
35insurance policy, or coverage to meet California’s minimum limits
36automobile insurance requirements, that the low-cost automobile
37insurance policy may be available for qualifying motorists. The
38information may be provided orally if the producer has been
39contacted by telephone, or in writing, but shall be communicated
40to the policyholder prior to the application for automobile insurance
P8    1coverage in the language in which the producer has otherwise
2communicated with the consumer.

3(b) If the consumer requests more information about the low-cost
4program the producer shall do either of the following:

5(1) If the producer is California Automobile Assigned Risk Plan
6certified, provide the consumer with an explanation in an
7information pamphlet produced by the California Automobile
8Assigned Risk Plan and approved and provided by the Department
9of Insurance of the qualifications, cost, and coverage provided by
10the policy. If the consumer qualifies for the low-cost policy and
11wishes to purchase the policy, the California Automobile Assigned
12Risk Plan certified producer shall provide the application and,
13upon completion, submit the application, supporting documents,
14and the applicant’s certification to the California Automobile
15Assigned Risk Plan. The submittal of the California Automobile
16Assigned Risk Plan application may be in addition to any other
17coverage offered or applied for through the producer.

18(2) If the producer is not California Automobile Assigned Risk
19Plan certified, the producer shall provide the consumer with the
20toll-free telephone number for the California Automobile Assigned
21Risk Plan or the program’s Internet Web site address as an option
22to coverage offered by the producer.

23

SEC. 6.  

Section 11629.75 of the Insurance Code is amended
24to read:

25

11629.75.  

(a) A certified producer shall provide to an applicant
26for a low-cost automobile insurance policy under this article a
27notice relating to coverage under the policy. The notice shall be
28provided in a separate document at the time of application, and
29include the following statement in 14-point boldface type:

3031“NOTICE
32

33INSURANCE COVERAGE PROVIDED IN THE POLICY YOU
34ARE BUYING CONTAINS REDUCED LIABILITY
35COVERAGE FOR PERSONAL INJURIES OR PROPERTY
36DAMAGE RESULTING FROM THE OPERATION OF THE
37INSURED VEHICLE. IF LOSSES FROM AN AUTOMOBILE
38ACCIDENT EXCEED THE COVERAGE PROVIDED BY THIS
39POLICY, YOU CAN BE HELD PERSONALLY LIABLE AND
40RESPONSIBLE FOR THOSE LOSSES.

P9    1THIS POLICY PROVIDES LIABILITY COVERAGE FOR
2INJURIES OR DEATH CAUSED TO OTHER PERSONS IN
3THE TOTAL AMOUNT OF TEN THOUSAND DOLLARS
4($10,000) PER PERSON IN ANY ONE ACCIDENT, AND UP
5TO A TOTAL AMOUNT OF TWENTY THOUSAND DOLLARS
6($20,000) FOR ALL PERSONS IN ANY ONE ACCIDENT. THE
7POLICY ALSO PROVIDES UP TO A TOTAL AMOUNT OF
8THREE THOUSAND DOLLARS ($3,000) IN LIABILITY
9COVERAGE FOR PROPERTY DAMAGE IN ANY ONE
10ACCIDENT. IF YOU WANT MORE INSURANCE COVERAGE,
11YOU MUST REQUEST A DIFFERENT POLICY.

12THIS POLICY ALSO DOES NOT COVER DAMAGE TO YOUR
13OWN VEHICLE, LOSSES RESULTING FROM YOUR BODILY
14INJURY OR DEATH, OR COVERAGE FOR LOSSES CAUSED
15BY AN UNINSURED OR UNDERINSURED DRIVER.
16HOWEVER, THESE OTHER COVERAGES MAY BE
17AVAILABLE AT EXTRA COST THROUGH OTHER
18INSURERS.

19THIS POLICY MAY ALSO CONTAIN UNINSURED
20MOTORIST BODILY INJURY COVERAGE IN THE TOTAL
21AMOUNT OF TEN THOUSAND DOLLARS ($10,000) PER
22PERSON IN ANY ONE ACCIDENT AND UP TO A TOTAL
23AMOUNT OF TWENTY THOUSAND DOLLARS ($20,000)
24FOR ALL PERSONS IN ANY ONE ACCIDENT, IF YOU SO
25CHOOSE. IN ADDITION, THIS POLICY MAY ALSO
26CONTAIN MEDICAL PAYMENTS COVERAGE IN THE
27AMOUNT OF ONE THOUSAND DOLLARS ($1,000) PER
28PERSON IN ANY ONE ACCIDENT, IF YOU SO CHOOSE.

29THIS POLICY DOES NOT COVER ANY OTHER DRIVER IN
30YOUR HOUSEHOLD WHO:

31(a) IS UNDER 19 YEARS OF AGE; OR

32(b) HAS LESS THAN 3 YEARS OF CONTINUOUSLY
33LICENSED DRIVING EXPERIENCE (UNLESS THE POLICY
34INCLUDES A SURCHARGE FOR THIS DRIVER); OR

35(c) HAS MORE THAN ONE OF EITHER, OR BOTH, OF THE
36FOLLOWING:

37--A PROPERTY DAMAGE ONLY ACCIDENT IN WHICH
38THE DRIVER WAS PRINCIPALLY AT FAULT.

39--A POINT FOR A MOVING VIOLATION; OR

P10   1(d) HAS IN THE PREVIOUS 3 YEARS AN AT-FAULT
2ACCIDENT INVOLVING BODILY INJURY OR DEATH; OR

3(e) HAS A FELONY OR MISDEMEANOR CONVICTION
4FROM A VIOLATION OF THE VEHICLE CODE ON HIS OR
5HER MOTOR VEHICLE RECORD.”


7(b) When the certified producer establishes delivery of the
8disclosure form specified in subdivision (a) by obtaining the
9signature of the applicant or insured, there shall be a conclusive
10presumption that the certified producer has complied with the
11disclosure requirements of this section.

12

SEC. 7.  

Section 11629.76 of the Insurance Code is amended
13to read:

14

11629.76.  

(a) For a low-cost automobile insurance policy
15issued pursuant to the program, certified producers shall be entitled
16to a commission rate of 12 percent or fifty dollars ($50), whichever
17is greater.

18(b) Notwithstanding subdivision (a), the commissioner may at
19any time establish a commission for a low-cost automobile
20insurance policy issued pursuant to the program and may make
21the commission effective on any policy originated within an entire
22year, or any portion of a year, as is needed to provide an incentive
23to certified producers to sell low-cost automobile insurance to
24eligible applicants. The commissioner shall not establish a
25commission pursuant to this subdivision if the commissioner
26determines that setting the commission rate will result in a lower
27commission than the commission paid by the California
28Automobile Assigned Risk Plan for private passenger, nonfleet
29risks under Article 4 (commencing with Section 11620).

30(c) No other fees of any kind may be charged or collected
31pursuant to this section and the sale of a low-cost policy under this
32article shall not be conditioned on the purchase of any other product
33or service.

34

SEC. 8.  

Section 11629.77 of the Insurance Code is amended
35to read:

36

11629.77.  

(a) A low-cost automobile insurance policy issued
37pursuant to the program shall be canceled only for the following
38reasons:

39(1) Nonpayment of premium.

P11   1(2) Fraud or material misrepresentation affecting the policy or
2the insured.

3(3) The purchase of additional automobile liability insurance
4coverage in violation of subdivision (a) of Section 11629.78.

5(4) The purchase or maintenance of automobile liability
6insurance coverage other than a low-cost policy for any additional
7vehicles in the insured’s household, in violation of subdivision (b)
8of Section 11629.78.

9(b) A policy shall be nonrenewed only for the following reasons:

10(1) A substantial increase in the hazard insured against.

11(2) The insured no longer meets the applicable eligibility
12requirements. In this regard, the eligibility of an insured shall be
13recertified by the California Automobile Assigned Risk Plan after
14the first year of eligibility, and annually thereafter by the insurer
15that issued the policy.

16(c) By January 1, 2016, the CAARP Advisory Committee shall
17report to the commissioner on a proposal, subject to approval by
18the commissioner, to allow a consumer to reinstate, in lieu of
19canceling, all policies that have been canceled for nonpayment of
20premium, and on a proposal, subject to approval by the
21commissioner, to allow consumers to make installment payments
22by debit card or credit card. The CAARP Advisory Committee
23shall also report, bybegin delete January 1, 2017,end deletebegin insert July 1, 2016,end insert on a proposal,
24subject to approval by the commissioner, to allow access to the
25program for applicants 16 to 18 years of age who are economically
26independent and meet other eligibility guidelines, and also for
27families who have an adult driver covered under the program and
28a driver 16 to 18 years of age in the household.

29

SEC. 9.  

Section 11629.81 of the Insurance Code is amended
30to read:

31

11629.81.  

(a) The California Automobile Assigned Risk Plan
32shall report to the commissioner on an annual basis, and at those
33additional times as it deems prudent, on the status of the program.
34The report shall include data regarding new policies, renewed
35policies, and policy cancellations or nonrenewals.

36(b) The department shall combine the report pursuant to
37subdivision (a) with the report required by Section 11629.85 and
38submit the combined report to the Legislature on or before March
3915 of each year.

P12   1(c) A report submitted pursuant to subdivision (b) shall be
2submitted in compliance with Section 9795 of the Government
3Code.

4

SEC. 10.  

Section 11629.84 of the Insurance Code is amended
5to read:

6

11629.84.  

This article shall remain in effect only until January
71, 2020, and as of that date is repealed, unless a later enacted
8statute, that is enacted before January 1, 2020, deletes or extends
9that date.

10

SEC. 11.  

Section 11629.85 of the Insurance Code is amended
11to read:

12

11629.85.  

(a) Notwithstanding Section 10231.5 of the
13Government Code, on or before March 15 of each year, the
14commissioner shall prepare and propose a plan in a report to the
15Legislature setting forth the methods the commissioner intends to
16implement to inform households eligible for the program about
17the availability of low-cost automobile insurance.

18(b) The plan shall include, at a minimum, a brief description of
19methods proposed to be used, anticipated costs, sources of revenue,
20goals, targets, objectives, and a justification of the proposed
21methods. The plan shall also explain how the department proposes
22to work in cooperation with the California Automobile Assigned
23Risk Plan, the social service agencies, the Department of Motor
24Vehicles, and community-based organizations in order to inform
25eligible households of the existence of the program.

26(c) The plan shall also include all of the following:

27(1) The commissioner’s determination regarding whether the
28program has been successful, based on the criteria specified in
29subdivision (d), and an explanation regarding that success or lack
30thereof.

31(2) In cooperation with the California Automobile Assigned
32Risk Plan, structural characteristics of the program that may require
33statutory revision in order for the program to succeed or to improve
34upon existing success.

35(3) Impediments to success of the program that can reasonably
36be overcome by revision to the strategies adopted by the
37department.

38(4) A detailed explanation of the department’s use for the
39program of funds assessed pursuant to Section 1872.81 for the
40previous fiscal year.

P13   1(5) For the previous calendar year, a list of the total low-cost
2auto premium for each county in which the program was available.

3(d) The program is successful if the following occur:

4(1) The program generated sufficient premiums to cover losses
5incurred under policies issued under the program, and expenses
6incurred by the program, as calculated pursuant to subdivision (c)
7of Section 11629.72.

8(2) The program served the public purpose of offering access
9to automobile insurance to otherwise underserved communities in
10the program areas.

11(3) The program offered access to automobile insurance to
12previously uninsured motorists seeking affordable coverage in the
13program areas.

14(4) The program’s outreach efforts lead uninsured motorists to
15contact a producer, and the driver obtains any auto insurance policy
16that complies with California law.

17(e) Any written or oral advertisements, including, but not limited
18to, paid or unpaid commercial or noncommercial advertising, by
19the department with reference to the low-cost automobile insurance
20program shall reference the department and shall not reference the
21commissioner by name or office, or include the commissioner’s
22voice, image, or likeness. The department shall not participate with
23any nongovernmental entity that produces or intends to produce
24advertisements or educational material that include the name of
25the commissioner or his or her voice, image, or likeness, and that
26are intended to make eligible households aware of the existence
27of low-cost automobile insurance.

28(f) A report submitted pursuant to subdivision (a) shall be
29submitted in compliance with Section 9795 of the Government
30Code.

31

SEC. 12.  

Section 11629.86 of the Insurance Code is amended
32to read:

33

11629.86.  

(a) A California Automobile Assigned Risk Plan
34certified producer may accept and process an application to
35purchase a low-cost automobile insurance policy under this
36program through an Internet Web site, in accordance with this
37section and regulations adopted by the Department of Insurance
38pursuant to this section.

39(b) Any producer seeking certification to accept and process
40low-cost automobile insurance policy applications through an
P14   1Internet Web site shall notify the California Automobile Assigned
2Risk Plan of its intentions to do so prior to accepting any
3applications to the program.

4(c) Prior to accepting payment and upon transmitting any
5information from the consumer, the producer’s Internet Web site
6shall include a clear explanation of whether the consumer will be
7afforded insurance coverage upon payment and, if not, when the
8consumer will receive coverage and how he or she will receive
9notice of coverage.

10(d) A producer accepting and processing applications through
11an Internet Web site shall be entitled to the same commission
12available to a producer selling a low-cost automobile insurance
13policy by any other means acceptable under the law.

14(e) Any producer accepting and processing applications through
15an Internet Web site is subject to the laws and rules governing this
16program and is liable for any errors and omissions related to the
17 transaction of insurance to the same extent as a producer selling
18a low-cost automobile insurance policy by any other means
19acceptable under the law.

20(f) Any consumer information required by this article may be
21accepted by electronic means after the Department of Insurance
22adopts regulations implementing this section and only if the
23information is submitted in accordance with those regulations.

24(g) The California Automobile Assigned Risk Plan shall
25coordinate with the Department of Insurance in order to develop
26a system for receiving and assigning policies issued through
27Internet Web sites.

28(h) The California Automobile Assigned Risk Plan may request,
29and the Department of Insurance may include in its plan submitted
30pursuant to Section 11629.85, up to fifty thousand dollars ($50,000)
31from the department’s existing consumer outreach fund to be used
32for the sole purpose of implementing this section.

33

SEC. 13.  

Section 11629.87 of the Insurance Code is repealed.

34

SEC. 14.  

Section 11629.87 is added to the Insurance Code, to
35read:

36

11629.87.  

(a) The department shall, by December 31, 2015,
37in consultation with the CAARP Advisory Committee, establish
38and maintain a consumer-oriented Internet Web site that provides
39all of the following:

P15   1(1) Referral to a list of certified agents or brokers with an office
2in the same geographic area as the consumer who may be contacted
3to purchase a low-cost automobile insurance policy.

4(2) Information about the eligibility requirements, benefits, and
5limits of the low-cost automobile insurance policy.

6(3) Notification that if a consumer does not qualify for the
7low-cost automobile insurance policy, other policies may be
8available from producers or insurers, and directing the consumer
9to the department’s automobile insurance premium comparison
10Internet Web page.

11(b) The CAARP Advisory Committee shall develop a proposal,
12by December 31, 2015, subject to approval by the commissioner,
13for interested consumers to apply for the program without
14physically visiting the office of a producer. This proposal may
15include the electronic uploading of documents, electronic
16signatures, linking eligible hotline callers and Internet Web site
17visitors directly to one or more producers, and electronic payments.



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