BILL ANALYSIS Ó
AB 1515
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Date of Hearing: April 8, 2015
ASSEMBLY COMMITTEE ON INSURANCE
Tom Daly, Chair
AB 1515
(Committee on Insurance) - As Amended April 6, 2015
SUBJECT: Insurance
SUMMARY: Makes numerous technical and clarifying changes to the
Insurance Code. Specifically, this bill:
1)Requires automobile, property, life and disability insurers to
add the Department of Insurance (DOI) website address to an
existing disclosure document provided to new policy holders.
2)Increases the amount of Risk Based Capital a life insurer must
hold without triggering increased financial oversight by the
DOI.
3)Requires that multiple employer welfare arrangements (MEWAs)
add the Department of Insurance website address to an existing
disclosure document provided to participating employers and
employees.
4)Requires and insurer to add the DOI consumer information phone
number to an existing notice provided to the insured after a
claim is filed.
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5)Requires the minimum type size for the word "insurance" that
is printed on the following documents created by insurance
agents and brokers:
a. Business cards
b. Price quotations
c. Insurance Products
d. Print advertisements
6)Requires life settlement agents and title marketing
representatives to notify the DOI of specified criminal
convictions, bankruptcy proceedings, and admissions or
judicial findings related to lying, cheating and stealing.
7)Requires a surplus lines broker to add the DOI website address
to the notice that they are required to provide to the
purchaser of a policy from a non-admitted insurer.
8)Repeals obsolete statutory language related to persistency
discounts for automobile insurance.
9)Requires insurers pay claims on disability insurance policies
that are neither health insurance nor disability income
policies within 30 days.
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10)Clarifies the disclosure requirements for life insurance
policies and annuities sold to senior citizens.
11)Requires disability insurers to add the DOI website and
consumer complaint phone number to promotional materials and
specified insurance documents.
12)Requires that the DOI website address be added to application
forms for Medicare Supplement plans.
13)Repeals obsolete language relating to long-term care
insurance.
14)Corrects obsolete language describing mental illnesses.
15)Repeals obsolete language regarding the distribution of
long-term care insurance policies.
16)Updates references to the long-term care model law adopted by
the National Association of Insurance Commissioners.
17)Requires vehicle service contracts to include the DOI website
address.
18)Permits the commissioner to delegate the authority to approve
settlements for agents/brokers if the settlement does not
involve financial misconduct involving more than $50,000.
19)Clarifies the continuing education requirements for bail
licensees.
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EXISTING LAW:
1)Requires automobile, property, life and disability insurers to
provide specified information regarding complaint resolution
processes and resources when first issuing a policy.
2)Requires insurers to maintain specified levels of "risk based
capital" as a means to ensure their solvency.
3)Provides for the existence of MEWAs which allow multiple small
employers to affiliate for the purpose of self-insuring
employee health insurance.
4)Requires an insurer to provide the insured a specified notice
regarding the fair settlement of insurance claims after a
claim is filed.
5)Requires insurance agents and brokers to provide specified
information on certain insurance related documents.
6)Requires most agents and brokers to notify the DOI of
specified criminal convictions, bankruptcy proceedings, and
admissions or judicial findings related to lying, cheating and
stealing.
7)Requires a surplus lines broker to provide a specified notice
to the purchaser of a policy from a non-admitted insurer.
8)Corrects obsolete references to the Vehicle Code.
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9)Requires disability insurance policies that are neither health
insurance nor disability income policies to pay claims within
30 days.
10)Requires insurers to pay claims on a disability income
insurance policy to pay claims within 30 days.
11)Requires the commissioner to approve all settlements
negotiated on his behalf.
FISCAL EFFECT: Undetermined
COMMENTS:
1) Purpose . This bill is the annual insurance omnibus bill. It
contains numerous technical and/or clarifying changes to the
Insurance Code. Most notably, the bill corrects erroneous
cross-references to the vehicle code relating to individual
motor vehicle records (MVR). Under Proposition 103, insurers
are required to provide a "good driver" discount to drivers
with less than two "moving violations." Subsequent
legislation required insurers to use the number of "points" on
a driver's MVR when determining "good driver" status and when
determining auto insurance rates. Previous legislation
altered the numbering of the relevant Vehicle Code section and
failed to update the cross-references in the Insurance Code.
REGISTERED SUPPORT / OPPOSITION:
AB 1515
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Support
Department of Insurance (sponsor)
Opposition
None
Analysis Prepared by:Paul Riches / INS. / (916) 319-2086