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:











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          Support


          Department of Insurance (sponsor)




          Opposition


          None




          Analysis Prepared by:Paul Riches / INS. / (916) 319-2086