BILL NUMBER: AB 1163	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JULY 14, 2015
	AMENDED IN ASSEMBLY  MAY 12, 2015
	AMENDED IN ASSEMBLY  APRIL 21, 2015

INTRODUCED BY   Assembly Member Rodriguez

                        FEBRUARY 27, 2015

   An act to add Section 1399.3 to the Health and Safety Code, and to
add Section 769.56 to the Insurance Code, relating to health care
coverage.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 1163, as amended, Rodriguez. Health care  services plan
  service plans  and health insurers: 
solicitors,  agents and brokers: notice of contract changes.
   Existing law, the Knox-Keene Health Care Service Plan Act of 1975,
provides for the licensure and regulation of health care service
plans by the Department of Managed Health Care and makes a willful
violation of the act a crime. Existing law also provides for the
regulation of health insurers by the Department of Insurance.
   This bill would prohibit a material change, as defined, made to
the terms and conditions of a contract between a health care 
services   service  plan  and a solicitor,
 or  a  health insurer and an agent or broker, from
becoming effective until the plan or insurer has delivered to the
 agent   solicitor, agent,  or broker
written or electronic notice of the change or changes to the
contract, within a specified time period. These provisions would not
apply if the material change is agreed to by the plan or insurer and
the  agent   solicitor, agent,  or broker,
or if the change at issue is required pursuant to state or federal
law. 
   This bill would exempt violations of the provisions relating to
health care service plans from the from criminal offense and other
disciplinary provisions of the Knox-Keene Health Care Service Plan
Act of 1975.  
   This bill would impose a state-mandated local program by creating
a new crime with respect to health care service plans.  
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.  
   This bill would provide that no reimbursement is required by this
act for a specified reason. 
   Vote: majority. Appropriation: no. Fiscal committee:  no
  yes  . State-mandated local program:  no
  yes  .


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 1399.3 is added to the Health and Safety Code,
to read:
   1399.3.  (a) A material change made by a health care service plan,
as defined in subdivision (f) of Section 1345, to the terms and
conditions of a contract between the health care service plan and
 an agent or broker   a solicitor  shall
not become effective until the health care service plan has delivered
to the  agent or broker,   solicitor,  at
least  60   45  days prior to the effective
date of the change, written or electronic notice indicating the
change or changes to the contract. For purposes of this section, a
"material change" is a change made to a provision of the contract
affecting any of the following:
   (1) Commissions, bonuses, and incentives paid to the 
agent or broker.  solicitor. 
   (2) Right of survivorship.
   (3) Indemnification of the  agent or broker  
solicitor  by the health care service plan.
   (4) Errors and omissions  in  coverage requirements for
the  agent or broker.   solicitor. 
   (b) Subdivision (a) shall not apply under either of the following
circumstances:
   (1) The change to the contract is mutually agreed upon by the
health care service plan and the  agent or broker. 
 solicitor. 
   (2) The change to the contract is required by state or federal
law. 
   (c) This section is not subject to Article 7 (commencing with
Section 1386) or Article 8 (commencing with Section 1390). 
  SEC. 2.  Section 769.56 is added to the Insurance Code, to read:
   769.56.  (a) A material change made by a health insurer, as
defined in subdivision (b) of Section 106, to the terms and
conditions of a contract between the health insurer and an agent or
broker shall not become effective until the health insurer has
delivered to the agent or broker, at least  60  
45  days prior to the effective date of the change, written or
electronic notice indicating the change or changes to the contract.
For purposes of this section, a "material change" is a change made to
a provision of the contract affecting any of the following:
   (1) Commissions, bonuses, and incentives paid to the agent or
broker.
   (2) Right of survivorship.
   (3) Indemnification of the agent or broker by the health insurer.
   (4) Errors and omissions coverage requirements for the agent or
broker.
   (b) Subdivision (a) shall not apply under either of the following
circumstances:
   (1) The change to the contract is mutually agreed upon by the
health insurer and the agent or broker.
   (2) The change to the contract is required by state or federal
law.
   SEC. 3.    No reimbursement is required by this act
pursuant to Section 6 of Article XIII B of the California
Constitution because the only costs that may be incurred by a local
agency or school district will be incurred because this act creates a
new crime or infraction, eliminates a crime or infraction, or
changes the penalty for a crime or infraction, within the meaning of
Section 17556 of the Government Code, or changes the definition of a
crime within the meaning of Section 6 of Article XIII B of the
California Constitution.