AB 1492,
as amended, Low. begin deleteAssigned risk plans. end deletebegin insertInsurance: inducements to purchase property or services.end insert
Existing law prohibits an insurer from participating in a plan to offer or effect insurance or annuities as an inducement to the purchase or rental by the public of specified property or services without a separate charge for that insurance. Existing law also prohibits an agent, broker, or solicitor from arranging the sale of that insurance. Existing law authorizes the Insurance Commissioner to revoke the license, certificate, or other authority to do business or engage in his or her occupation, as applicable, of an insurer, agent, broker, or solicitor who willfully violates those prohibitions. Existing law specifies exceptions to those prohibitions for certain categories of insurance.
end insertbegin insertThis bill would add to the existing exceptions described above private passenger automobile insurance issued in connection with the sale or lease of a new vehicle and paid for by the vehicle manufacturer, provided that prior to finalizing the purchase the purchaser is advised of the cost of that insurance included in connection with the sale or lease.
end insertExisting law authorizes groups of insurers not under common ownership or management to form a limited assignment distribution arrangement. Existing law requires each arrangement to have one servicing carrier that writes assigned risk business on behalf of the members of the arrangement in return for consideration from the other participating carriers for not writing the business.
end deleteThis bill would make technical, nonsubstantive changes to that provision.
end deleteVote: majority.
Appropriation: no.
Fiscal committee: begin deleteno end deletebegin insertyesend insert.
State-mandated local program: no.
The people of the State of California do enact as follows:
begin insertSection 777.1 of the end insertbegin insertInsurance Codeend insertbegin insert is amended
2to read:end insert
No insurer shall participate inbegin delete anyend deletebegin insert aend insert plan to offer or
4effectbegin delete any kind or kinds ofend delete insurance or annuities in this state as
5an inducement to the purchase or rental by the public ofbegin delete anyend delete
6 property, real or personal or mixed, or services, withoutbegin delete anyend deletebegin insert aend insert
7 separate charge to
the insured forbegin delete suchend deletebegin insert thatend insert insurance, nor shall
8begin delete anyend deletebegin insert aend insert agent, broker, or solicitor arrange the sale ofbegin delete any suchend deletebegin insert thatend insert
9 insurance.begin delete The provisions of thisend deletebegin insert Thisend insert articlebegin delete shall not be applicableend delete
10begin insert
does not applyend insert to insurance written in connection with subscriptions
11to newspapers of general circulation; norbegin delete shallend deletebegin insert doesend insert it apply to
12insurance issued to credit unions or to members of credit unions
13in connection with the purchase of shares inbegin delete such aend deletebegin insert theend insert credit union;
14norbegin delete shallend deletebegin insert doesend insert it apply to insurance offered as a guarantee of the
15performance of goods,begin delete which insuranceend deletebegin insert
thatend insert is designed to protect
16the purchasers or users of such goods;begin insert
nor does it apply to private
17passenger automobile insurance issued in connection with the sale
18or lease of a new vehicle and paid for by the vehicle manufacturer,
19provided the purchaser is advised prior to finalizing the purchase
20of the vehicle of the annual cost of the insurance included in
21connection with the sale or lease;end insert norbegin delete shall it be applicableend deletebegin insert does
22it applyend insert to any title insurance or life or disability insurance written
23in connection with anbegin delete indebtedness, the purpose of which insurance begin insert indebtedness that is intendedend insert to pay the balance of the
24isend delete
25indebtedness in the event of the death
or disability of the person
26insured; norbegin delete shall it be applicableend deletebegin insert does it applyend insert to any of the
27provisions of Part 5 (commencing at Section 12140), Division 2
28of this code; norbegin delete shall it be applicableend deletebegin insert does it applyend insert to insurance
29provided incidentally to the sale of services if the cost of the
P3 1insurance to the seller of the services does not exceed the sum of
2one dollar ($1) per annum for each purchaser of those services.
Section 11623.5 of the Insurance Code is
4amended to read:
(a) Groups of insurers not under common ownership
6or management may form a limited assignment distribution
7arrangement. Each arrangement shall have one servicing carrier
8that writes assigned risk business on behalf of the members of the
9arrangement in return for consideration from the other participating
10carriers for not writing the business.
11(b) An insurer may not act as a servicing carrier except with the
12continuing approval of the commissioner.
13(c) Each servicing carrier shall have a surplus of at least ten
14million dollars ($10,000,000).
15(d) Upon the approval of the commissioner of a servicing carrier
16under this section, the plan shall make all assignments that
17otherwise would be made to a participant to the servicing carrier
18for that participant.
19(e) The commissioner shall impose a filing fee for the filing
20necessary to obtain approval pursuant to this section. The fee shall
21be limited to that amount sufficient to defray the
costs of the
22department in connection with considering the application.
O
98