Amended in Assembly August 4, 2014

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)

begin insert

(Coauthor: Assembly Member Alejo)

end insert

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,begin insert byend insert increasing the limits on the value of an automobile that can be insured through the program, andbegin insert by additionallyend insert authorizingbegin delete that value toend deletebegin insert the value of an automobile toend insert be determined by a method adopted bybegin delete CAARPend deletebegin insert the CAARP Advisory Committeeend insert and approved by the commissioner. 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 producersbegin insert who are not certifiedend insert 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 wouldbegin delete insteadend deletebegin insert instead, upon the setting of policy rates in 2015 as provided,end insert 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, by July 1, 2016, 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 Advisory Committee to develop a proposal, subject to approval by the commissioner, 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
P5    1automobile policy under the program, with coverage limits at least
2equal to the limits of liability in the underlying low-cost automobile
3policy, shall satisfy the requirements of Section 11580.2 and the
4financial responsibility requirements of Sections 4000.37, 16021,
5and 16431 of the Vehicle Code.

6(c) Medical payments coverage shall be made available to the
7consumer. However, an insurer may charge a premium for that
8coverage in addition to the premium set forth in Section 11629.72.

9(d) The policy shall have an initial term of one year, renewable
10on an annual basis thereafter.

11(e) The policy shall cover the person named in the policy, and
12to the same extent that insurance is provided to the named insured,
13any other person using the automobile, provided the use is with
14his or her permission, express or implied, and within the scope of
15that permission, except that the policy shall not cover members of
16the named insured’s household who do not satisfy the requirements
17of subdivisions (b) to (e), inclusive, of Section 11629.73.

18(f) The policy shall provide coverage for an automobile with a
19value of twenty-five thousand dollars ($25,000) or less, as
20 evidenced by the value given to the automobile by the Department
21of Motor Vehicles in assessing vehicle license fees, or another
22method of determining market value adopted by the California
23Automobile Assigned Risk Plan Advisory Committee (CAARP
24Advisory Committee) and approved by the commissioner.

25

SEC. 3.  

Section 11629.72 of the Insurance Code is amended
26to read:

27

11629.72.  

(a) The annual rate offered under the program for
28each of the counties in California shall be established at a date
29according to the discretion of the commissioner. Surcharges, as a
30percentage of the base rate, shall be added to the base rate and that
31percentage shall be set at the discretion of the commissioner, if
32the named insured or a resident of the household of the named
33insured will be a driver of the automobile covered under the
34low-cost policy, and is either or both of the following:

35(1) An unmarried male between 19 and 24 years of age.

36(2) A person 19 years of age or older to whom any of the
37following applies:

38(A) Operates a vehicle with a driver’s license issued by the
39Department of Motor Vehicles pursuant to Section 12801.9 of the
40Vehicle Code and has fewer than three years of driving history.

P6    1(B) Has fewer than three years of driving history.

2(C) Has not been continually licensed to drive for the past three
3years.

4(b) (1) The California Automobile Assigned Risk Plan shall
5make available to an insured under the program, subject to approval
6by the commissioner, a premium installment option pursuant to
7which an insured is required to pay not more than 20 percent of
8the total policy cost upon issuance of the low-cost policy, followed
9thereafter by seven other payments. The plan may make additional
10payment plans available, subject to approval by the commissioner.

11(2) No other premium financing arrangement shall be permitted.

12(c) Rates for policies issued under the program in each county
13or city and county shall be reviewed and revised as follows:

14(1) Rates shall be sufficient to cover (A) losses incurred under
15policies issued under the program, and (B) expenses, including,
16but not limited to, all reasonable and necessary expenses such as
17the costs of administration, underwriting, taxes, commissions, and
18 claims adjusting, that are incurred due to participation in the
19program. For purposes of this paragraph, “losses incurred” means
20claims paid, claims incurred and reported, and claims incurred but
21not yet reported. In assessing loss reserves, the commissioner shall
22only allow loss reserves that are estimated from actual losses in
23the program or comparable data by a licensed statistical agent, as
24adjusted to reflect coverage provided under the program.

25(2) Rates shall be set so as to result in no projected subsidy of
26the program by those policyholders of insurers issuing policies
27under the program who are not participants in the program.

28(3) Rates shall be set with respect to the program so as to result
29in no projected subsidy by policyholders in one county of
30policyholders in any of the other counties.

31(4) (A) Commencing on January 1, 2015, and annually
32thereafter through January 1, 2017, the California Automobile
33Assigned Risk Plan shall submit the loss and expense data, together
34with a proposed rate and the surcharge authorized by subdivision
35(a) for the low-cost automobile policy for the program, to the
36commissioner for approval in accordance with this chapter. The
37commissioner shall act on the recommendation within 90 days.

38(B) After the January 1, 2017, rate filing, subsequent rate filings
39are mandatory if the rate indication is a change of greater than 7
40percent from the previous filing, or at the discretion of the CAARP
P7    1Advisory Committee if the rate indication is a change of less than
27 percent.

3

SEC. 4.  

Section 11629.73 of the Insurance Code is amended
4to read:

5

11629.73.  

A low-cost automobile insurance policy under the
6program shall only be available for purchase by persons who satisfy
7the following eligibility requirements:

8(a) The person shall be in a household with an annual gross
9household income that does not exceed 250 percent of the federal
10poverty level, as defined in Part 6.2 (commencing with Section
1112693) or as defined in an equivalent manner that is approved by
12the commissioner.

13(b) The person shall be no less than 19 years of age and have
14been continuously licensed to drive an automobile for the previous
15three years, except that a person who has not been continually
16licensed to drive or has fewer than three years of driving history
17may qualify for the surcharge under subdivision (a) of Section
1811629.72.

19(c) The person shall have not more than one of either, but not
20both, of the following within the previous three years:

21(1) A property damage only accident in which the driver was
22principally at fault.

23(2) A point for a moving violation.

24(d) The person shall not have on record within the previous
25three years, an at-fault accident involving bodily injury or death.

26(e) The person shall not have a felony or misdemeanor
27conviction for a violation of the Vehicle Code on his or her motor
28vehicle record.

29(f) The person shall not be a college student claimed as a
30dependent of another person for federal or state income tax
31purposes.

32

SEC. 5.  

Section 11629.745 of the Insurance Code is amended
33to read:

34

11629.745.  

(a) An agent or broker, hereafter referred to as a
35producer, who conducts business in a county in which a low-cost
36automobile insurance policy is available pursuant to this article
37shall inform every new prospective automobile insurance
38policyholder who requests a minimum limits or basic limits
39insurance policy, or coverage to meet California’s minimum limits
40automobile insurance requirements, that the low-cost automobile
P8    1insurance policy may be available for qualifying motorists. The
2information may be provided orally if the producer has been
3contacted by telephone, or in writing, but shall be communicated
4to the policyholder prior to the application for automobile insurance
5coverage in the language in which the producer has otherwise
6communicated with the consumer.

7(b) If the consumer requests more information about the low-cost
8program the producer shall do either of the following:

9(1) If the producer is California Automobile Assigned Risk Plan
10certified, provide the consumer with an explanation in an
11information pamphlet produced by the California Automobile
12Assigned Risk Plan and approved and provided by the Department
13of Insurance of the qualifications, cost, and coverage provided by
14the policy. If the consumer qualifies for the low-cost policy and
15wishes to purchase the policy, the California Automobile Assigned
16Risk Plan certified producer shall provide the application and,
17upon completion, submit the application, supporting documents,
18and the applicant’s certification to the California Automobile
19Assigned Risk Plan. The submittal of the California Automobile
20Assigned Risk Plan application may be in addition to any other
21coverage offered or applied for through the producer.

22(2) If the producer is not California Automobile Assigned Risk
23Plan certified, the producer shall provide the consumer with the
24toll-free telephone number for the California Automobile Assigned
25Risk Plan or the program’s Internet Web site address as an option
26to coverage offered by the producer.

27

SEC. 6.  

Section 11629.75 of the Insurance Code is amended
28to read:

29

11629.75.  

(a) A certified producer shall provide to an applicant
30for a low-cost automobile insurance policy under this article a
31notice relating to coverage under the policy. The notice shall be
32provided in a separate document at the time of application, and
33include the following statement in 14-point boldface type:

3435“NOTICE
36

37INSURANCE COVERAGE PROVIDED IN THE POLICY YOU
38ARE BUYING CONTAINS REDUCED LIABILITY
39COVERAGE FOR PERSONAL INJURIES OR PROPERTY
40DAMAGE RESULTING FROM THE OPERATION OF THE
P9    1INSURED VEHICLE. IF LOSSES FROM AN AUTOMOBILE
2ACCIDENT EXCEED THE COVERAGE PROVIDED BY THIS
3POLICY, YOU CAN BE HELD PERSONALLY LIABLE AND
4RESPONSIBLE FOR THOSE LOSSES.

5THIS POLICY PROVIDES LIABILITY COVERAGE FOR
6INJURIES OR DEATH CAUSED TO OTHER PERSONS IN
7THE TOTAL AMOUNT OF TEN THOUSAND DOLLARS
8($10,000) PER PERSON IN ANY ONE ACCIDENT, AND UP
9TO A TOTAL AMOUNT OF TWENTY THOUSAND DOLLARS
10($20,000) FOR ALL PERSONS IN ANY ONE ACCIDENT. THE
11 POLICY ALSO PROVIDES UP TO A TOTAL AMOUNT OF
12THREE THOUSAND DOLLARS ($3,000) IN LIABILITY
13COVERAGE FOR PROPERTY DAMAGE IN ANY ONE
14ACCIDENT. IF YOU WANT MORE INSURANCE COVERAGE,
15YOU MUST REQUEST A DIFFERENT POLICY.

16THIS POLICY ALSO DOES NOT COVER DAMAGE TO YOUR
17OWN VEHICLE, LOSSES RESULTING FROM YOUR BODILY
18INJURY OR DEATH, OR COVERAGE FOR LOSSES CAUSED
19BY AN UNINSURED OR UNDERINSURED DRIVER.
20HOWEVER, THESE OTHER COVERAGES MAY BE
21AVAILABLE AT EXTRA COST THROUGH OTHER
22INSURERS.

23THIS POLICY MAY ALSO CONTAIN UNINSURED
24MOTORIST BODILY INJURY COVERAGE IN THE TOTAL
25AMOUNT OF TEN THOUSAND DOLLARS ($10,000) PER
26PERSON IN ANY ONE ACCIDENT AND UP TO A TOTAL
27AMOUNT OF TWENTY THOUSAND DOLLARS ($20,000)
28FOR ALL PERSONS IN ANY ONE ACCIDENT, IF YOU SO
29CHOOSE. IN ADDITION, THIS POLICY MAY ALSO
30CONTAIN MEDICAL PAYMENTS COVERAGE IN THE
31AMOUNT OF ONE THOUSAND DOLLARS ($1,000) PER
32PERSON IN ANY ONE ACCIDENT, IF YOU SO CHOOSE.

33THIS POLICY DOES NOT COVER ANY OTHER DRIVER IN
34YOUR HOUSEHOLD WHO:

35(a) IS UNDER 19 YEARS OF AGE; OR

36(b) HAS LESS THAN 3 YEARS OF CONTINUOUSLY
37LICENSED DRIVING EXPERIENCE (UNLESS THE POLICY
38INCLUDES A SURCHARGE FOR THIS DRIVER); OR

39(c) HAS MORE THAN ONE OF EITHER, OR BOTH, OF THE
40FOLLOWING:

P10   1--A PROPERTY DAMAGE ONLY ACCIDENT IN WHICH
2THE DRIVER WAS PRINCIPALLY AT FAULT.

3--A POINT FOR A MOVING VIOLATION; OR

4(d) HAS IN THE PREVIOUS 3 YEARS AN AT-FAULT
5ACCIDENT INVOLVING BODILY INJURY OR DEATH; OR

6(e) HAS A FELONY OR MISDEMEANOR CONVICTION
7FROM A VIOLATION OF THE VEHICLE CODE ON HIS OR
8HER MOTOR VEHICLE RECORD.”


10(b) When the certified producer establishes delivery of the
11disclosure form specified in subdivision (a) by obtaining the
12signature of the applicant or insured, there shall be a conclusive
13presumption that the certified producer has complied with the
14disclosure requirements of this section.

15

SEC. 7.  

Section 11629.76 of the Insurance Code is amended
16to read:

17

11629.76.  

(a) begin insert(1)end insertbegin insertend insertFor a low-cost automobile insurance policy
18issued pursuant to the program, certified producers shall be entitled
19tobegin delete a commission rate of 12 percent or fifty dollars ($50), whichever
20is greater.end delete
begin insert the same commission rate as is paid by the California
21Automobile Assigned Risk Plan for private passenger, nonfleet
22risks under Article 4 (commencing with Section 11620). The
23commission rate prescribed in this paragraph shall only be in
24effect until the conditions described in paragraph (2) are fulfilled.end insert

begin insert

25(2) Effective upon the setting of policy rates in 2015 pursuant
26to Section 11629.72, for a low-cost automobile insurance policy
27issued pursuant to the program, certified producers shall be
28entitled to a commission rate of 12 percent or fifty dollars ($50),
29whichever is greater.

end insert

30(b) Notwithstanding subdivision (a), the commissioner may at
31any time establish a commission for a low-cost automobile
32insurance policy issued pursuant to the program and may make
33the commission effective on any policy originated within an entire
34year, or any portion of a year, as is needed to provide an incentive
35to certified producers to sell low-cost automobile insurance to
36eligible applicants. The commissioner shall not establish a
37commission pursuant to this subdivision if the commissioner
38determines that setting the commission rate will result in a lower
39commission than the commission paid by the California
P11   1Automobile Assigned Risk Plan for private passenger, nonfleet
2risks under Article 4 (commencing with Section 11620).

3(c) No other fees of any kind may be charged or collected
4pursuant to this section and the sale of a low-cost policy under this
5article shall not be conditioned on the purchase of any other product
6or service.

7

SEC. 8.  

Section 11629.77 of the Insurance Code is amended
8to read:

9

11629.77.  

(a) A low-cost automobile insurance policy issued
10pursuant to the program shall be canceled only for the following
11reasons:

12(1) Nonpayment of premium.

13(2) Fraud or material misrepresentation affecting the policy or
14the insured.

15(3) The purchase of additional automobile liability insurance
16coverage in violation of subdivision (a) of Section 11629.78.

17(4) The purchase or maintenance of automobile liability
18insurance coverage other than a low-cost policy for any additional
19vehicles in the insured’s household, in violation of subdivision (b)
20of Section 11629.78.

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

22(1) A substantial increase in the hazard insured against.

23(2) The insured no longer meets the applicable eligibility
24requirements. In this regard, the eligibility of an insured shall be
25recertified by the California Automobile Assigned Risk Plan after
26the first year of eligibility, and annually thereafter by the insurer
27that issued the policy.

28(c) By January 1, 2016, the CAARP Advisory Committee shall
29report to the commissioner on a proposal, subject to approval by
30the commissioner, to allow a consumer to reinstate, in lieu of
31canceling, all policies that have been canceled for nonpayment of
32premium, and on a proposal, subject to approval by the
33commissioner, to allow consumers to make installment payments
34by debit card or credit card. The CAARP Advisory Committee
35shall also report, by July 1, 2016, on a proposal, subject to approval
36by the commissioner, to allow access to the program for applicants
3716 to 18 years of age who are economically independent and meet
38other eligibility guidelines, and also for families who have an adult
39driver covered under the program and a driver 16 to 18 years of
40age in the household.

P12   1

SEC. 9.  

Section 11629.81 of the Insurance Code is amended
2to read:

3

11629.81.  

(a) The California Automobile Assigned Risk Plan
4shall report to the commissioner on an annual basis, and at those
5additional times as it deems prudent, on the status of the program.
6The report shall include data regarding new policies, renewed
7policies, and policy cancellations or nonrenewals.

8(b) The department shall combine the report pursuant to
9subdivision (a) with the report required by Section 11629.85 and
10submit the combined report to the Legislature on or before March
1115 of each year.

12(c) A report submitted pursuant to subdivision (b) shall be
13submitted in compliance with Section 9795 of the Government
14Code.

15

SEC. 10.  

Section 11629.84 of the Insurance Code is amended
16to read:

17

11629.84.  

This article shall remain in effect only until January
181, 2020, and as of that date is repealed, unless a later enacted
19statute, that is enacted before January 1, 2020, deletes or extends
20that date.

21

SEC. 11.  

Section 11629.85 of the Insurance Code is amended
22to read:

23

11629.85.  

(a) Notwithstanding Section 10231.5 of the
24Government Code, on or before March 15 of each year, the
25commissioner shall prepare and propose a plan in a report to the
26Legislature setting forth the methods the commissioner intends to
27implement to inform households eligible for the program about
28the availability of low-cost automobile insurance.

29(b) The plan shall include, at a minimum, a brief description of
30methods proposed to be used, anticipated costs, sources of revenue,
31goals, targets, objectives, and a justification of the proposed
32methods. The plan shall also explain how the department proposes
33to work in cooperation with the California Automobile Assigned
34Risk Plan, the social service agencies, the Department of Motor
35Vehicles, and community-based organizations in order to inform
36eligible households of the existence of the program.

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

38(1) The commissioner’s determination regarding whether the
39program has been successful, based on the criteria specified in
P13   1subdivision (d), and an explanation regarding that success or lack
2thereof.

3(2) In cooperation with the California Automobile Assigned
4Risk Plan, structural characteristics of the program that may require
5statutory revision in order for the program to succeed or to improve
6upon existing success.

7(3) Impediments to success of the program that can reasonably
8be overcome by revision to the strategies adopted by the
9department.

10(4) A detailed explanation of the department’s use for the
11program of funds assessed pursuant to Section 1872.81 for the
12previous fiscal year.

13(5) For the previous calendar year, a list of the total low-cost
14auto premium for each county in which the program was available.

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

16(1) The program generated sufficient premiums to cover losses
17incurred under policies issued under the program, and expenses
18incurred by the program, as calculated pursuant to subdivision (c)
19of Section 11629.72.

20(2) The program served the public purpose of offering access
21to automobile insurance to otherwise underserved communities in
22the program areas.

23(3) The program offered access to automobile insurance to
24previously uninsured motorists seeking affordable coverage in the
25program areas.

26(4) The program’s outreach efforts lead uninsured motorists to
27contact a producer, and the driver obtains any auto insurance policy
28that complies with California law.

29(e) Any written or oral advertisements, including, but not limited
30to, paid or unpaid commercial or noncommercial advertising, by
31the department with reference to the low-cost automobile insurance
32program shall reference the department and shall not reference the
33commissioner by name or office, or include the commissioner’s
34voice, image, or likeness. The department shall not participate with
35any nongovernmental entity that produces or intends to produce
36advertisements or educational material that include the name of
37the commissioner or his or her voice, image, or likeness, and that
38are intended to make eligible households aware of the existence
39of low-cost automobile insurance.

P14   1(f) A report submitted pursuant to subdivision (a) shall be
2 submitted in compliance with Section 9795 of the Government
3Code.

4

SEC. 12.  

Section 11629.86 of the Insurance Code is amended
5to read:

6

11629.86.  

(a) A California Automobile Assigned Risk Plan
7certified producer may accept and process an application to
8purchase a low-cost automobile insurance policy under this
9program through an Internet Web site, in accordance with this
10section and regulations adopted by thebegin delete Department of Insuranceend delete
11begin insert departmentend insert pursuant to this section.

12(b) Any producer seeking certification to accept and process
13low-cost automobile insurance policy applications through an
14Internet Web site shall notify the California Automobile Assigned
15Risk Plan of its intentions to do so prior to accepting any
16applications to the program.

17(c) Prior to accepting payment and upon transmitting any
18information from the consumer, the producer’s Internet Web site
19shall include a clear explanation of whether the consumer will be
20afforded insurance coverage upon payment and, if not, when the
21consumer will receive coverage and how he or she will receive
22notice of coverage.

23(d) A producer accepting and processing applications through
24an Internet Web site shall be entitled to the same commission
25available to a producer selling a low-cost automobile insurance
26policy by any other means acceptable under the law.

27(e) Any producer accepting and processing applications through
28an Internet Web site is subject to the laws and rules governing this
29program and is liable for any errors and omissions related to the
30 transaction of insurance to the same extent as a producer selling
31a low-cost automobile insurance policy by any other means
32acceptable under the law.

33(f) Any consumer information required by this article may be
34accepted by electronic means after thebegin delete Department of Insuranceend delete
35begin insert departmentend insert adopts regulations implementing this section and only
36if the information is submitted in accordance with those regulations.

37(g) The California Automobile Assigned Risk Plan shall
38coordinate with thebegin delete Department of Insuranceend deletebegin insert departmentend insert in order
39to develop a system for receiving and assigning policies issued
40through Internet Web sites.

P15   1(h) The California Automobile Assigned Risk Plan may request,
2and thebegin delete Department of Insuranceend deletebegin insert departmentend insert may include in its
3plan submitted pursuant to Section 11629.85, up to fifty thousand
4dollars ($50,000) from the department’s existing consumer outreach
5fund to be used for the sole purpose of implementing this section.

6

SEC. 13.  

Section 11629.87 of the Insurance Code is repealed.

7

SEC. 14.  

Section 11629.87 is added to the Insurance Code, to
8read:

9

11629.87.  

(a) The department shall, by December 31, 2015,
10in consultation with the CAARP Advisory Committee, establish
11and maintain a consumer-oriented Internet Web site that provides
12all of the following:

13(1) Referral to a list of certified agents or brokers with an office
14in the same geographic area as the consumer who may be contacted
15to purchase a low-cost automobile insurance policy.

16(2) Information about the eligibility requirements, benefits, and
17limits of the low-cost automobile insurance policy.

18(3) Notification that if a consumer does not qualify for the
19low-cost automobile insurance policy, other policies may be
20available from producers or insurers, and directing the consumer
21to the department’s automobile insurance premium comparison
22Internet Web page.

23(b) The CAARP Advisory Committee shall develop a proposal,
24by December 31, 2015, subject to approval by the commissioner,
25for interested consumers to apply for the program without
26physically visiting the office of a producer. This proposal may
27include the electronic uploading of documents, electronic
28signatures, linking eligible hotline callers and Internet Web site
29visitors directly to one or more producers, and electronic payments.



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