BILL NUMBER: AB 1163	AMENDED
	BILL TEXT

	AMENDED IN SENATE  AUGUST 31, 2015
	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 service plans and
health insurers:  solicitors, agents and brokers: 
 solicitors and life agents:  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 service
plan and a solicitor, or a health insurer and  an agent or
broker,  a life agent,  from becoming effective
until the plan or insurer has delivered to the  solicitor,
agent, or broker   solicitors or life agent 
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  solicitor, agent, or broker,   solicitor or
agent  or if the change at issue is required pursuant to state
or federal law.
   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: yes.
State-mandated local program: 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 a
solicitor shall not become effective until the health care service
plan has delivered to the solicitor, at least 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 solicitor.
   (2) Right of survivorship.
   (3) Indemnification of the solicitor by the health care service
plan.
   (4) Errors and omissions  in  coverage
requirements for the 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 solicitor.
   (2) The change to the contract is required by state or federal
law.
  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   a life agent  shall not become
effective until the health insurer has delivered to the 
agent or broker,   life agent,  at least 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.   life agent. 
   (2) Right of survivorship.
   (3) Indemnification of the  agent or broker  
life agent  by the health insurer.
   (4) Errors and omissions coverage requirements for the 
agent or broker.   life agent. 
   (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.   life
agent. 
   (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.