Amended in Assembly March 16, 2016

California Legislature—2015–16 Regular Session

Assembly Bill No. 2474

Introduced by Assembly Member Mullin

February 19, 2016

An act to amend Section begin delete 12901 end delete begin insert 11580.24 end insert of the Insurance Code, relating to insurance.

LEGISLATIVE COUNSEL’S DIGEST

AB 2474, as amended, Mullin. begin delete Insurance Commissioner: conflict of interest. end delete begin insert Automobile insurance: personal vehicle sharing. end insert

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Existing law defines a “personal vehicle sharing program” as a legal entity qualified to do business in the State of California engaged in the business of facilitating the sharing of private passenger motor vehicles for noncommercial use by individuals within the state. Existing law requires the personal vehicle sharing program to facilitate the installation, operation, and maintenance of computer hardware and software and signage necessary for a private passenger motor vehicle to be used in a personal vehicle sharing program, including payment of the cost of damage or theft of that equipment and any damage caused to the vehicle by the installation, operation, and maintenance of that equipment.

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This bill would delete the above-described requirements.

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Existing law requires the personal vehicle sharing program to be liable for a loss or injury that occurs during any time period when the private passenger motor vehicle is under the operation and control of a person, other than the vehicle owner, pursuant to a personal vehicle sharing program, or otherwise under the control of a personal vehicle sharing program. A personal vehicle sharing program continues to be liable until specified events occur, including, but not limited to, that the private passenger motor vehicle is returned to a location designated by the personal vehicle sharing program.

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This bill would instead require that one of the triggering events be that the private passenger motor vehicle is returned to the location designated and agreed to by both the vehicle owner and the user of the vehicle, consistent with the terms and policies of the personal vehicle sharing program.

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Existing law establishes the office of the Insurance Commissioner and provides that the commissioner shall be elected by the people in the same time, place, and manner as the Governor not to exceed 2 4-year terms. Existing law requires the commissioner to be a person competent and fully qualified to perform the duties of the office, as specified. Existing law also prohibits the commissioner, any deputy, or employee, during his or her tenure of office, from being be an officer, agent, or employee of an insurer or directly or indirectly interested in any insurer or licensee, except as specified.

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This bill would make technical, nonsubstantive changes to those provisions.

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Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

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begin insert Section 11580.24 of the end insert begin insert Insurance Code end insert begin insert is
amended to read: end insert

11580.24.  

(a)  begin delete No end delete begin insert A end insert private passenger motor vehicle insured
by its owner pursuant to a policy of insurance subject to Section
11580.1 or 11580.2 shall begin insert not end insert be classified as a commercial vehicle,
for-hire vehicle, permissive use vehicle, or livery solely because
its owner allows it to be used for personal vehicle sharing as long
as all of the following circumstances apply:

(1) The personal vehicle sharing is conducted pursuant to a
personal vehicle sharing program.

(2) The annual revenue received by the begin insert private passenger motor end insert
vehicle’s owner begin delete which end delete begin insert that end insert was generated by the personal vehicle
sharing of the vehicle does not exceed the annual expenses of
owning and operating the vehicle, including depreciation, interest,
lease payments, auto loan payments, insurance, maintenance,
parking, fuel, cleaning, automobile repair, and costs associated
with personal vehicle sharing, including, but not limited to, the
installation, operation, and maintenance of computer hardware
and software, signage identifying the vehicle as a personal sharing
vehicle, and any fees charged by a personal vehicle sharing
program.

(3) The owner of the private passenger motor vehicle does not
knowingly place the vehicle into commercial use, as defined by
Section 675.5, by a personal vehicle sharing user while engaged
in personal vehicle sharing.

(b) For purposes of this section the following definitions apply:

(1) “Personal vehicle sharing” means the use of private
passenger motor vehicles by persons other than the vehicle’s owner,
in connection with a personal vehicle sharing program.

(2) “Personal vehicle sharing program” means a legal entity
qualified to do business in the State of California engaged in the
business of facilitating the sharing of private passenger begin insert motor end insert
vehicles for noncommercial use by individuals within the state.

(3) “Private passenger motor vehicle” means a vehicle that is
insured, or is subject to being insured, under a personal automobile
liability insurance policy insuring a single individual or individuals
residing in the same household, as the named insured, or meets
the requirements of Section 16058 of the Vehicle Code, but does
not include a vehicle with fewer than four wheels.

(c) A personal vehicle sharing program shall, for each begin insert private
passenger motor end insert vehicle that it facilitates the use of, do all of the
following:

(1) During all times that the begin insert private passenger motor end insert vehicle is
engaged in personal vehicle sharing, provide insurance coverages
for the vehicle and operator of the vehicle that are equal to or
greater than the insurance coverages maintained by the vehicle
owner and reported to the personal vehicle sharing program.
However, the personal vehicle sharing program shall not provide
liability coverage less than three times the minimum insurance
requirements for private passenger begin insert motor end insert vehicles. Compliance
with the terms and conditions of this paragraph shall be deemed
to avoid the application of the limitation on damage recoveries set
forth in Section 3333.4 of the Civil Code.

(2) Provide the registered owner of the begin insert private passenger motor end insert
vehicle with a Department of Motor Vehicles Form REG 5085 or
other suitable proof of compliance with the insurance requirements
of this section and the requirements of the California Financial
Responsibility Law in Section 1656.2 of the Vehicle Code, a copy
of which shall be maintained in the vehicle by the vehicle’s
registered owner during any time when the vehicle is operated by
any person other than the vehicle’s owner pursuant to a personal
vehicle sharing program.

(3) Collect, maintain, and make available to the begin insert private
passenger motor end insert vehicle’s owner, the vehicle owner’s primary
automobile liability insurer on file with the Department of Motor
Vehicles, and to any other government agency as required by law,
at the cost of the personal vehicle sharing program, verifiable
electronic records that identify the date, time, initial and final
locations of the vehicle, and miles driven when the vehicle is under
the control of a person other than the vehicle’s owner pursuant to
a personal vehicle sharing program.

(4) Provide the begin insert private passenger motor end insert vehicle’s owner and
any person that operates the vehicle pursuant to a personal vehicle
sharing program with a disclosure that contains information
explaining the terms and conditions contained in this section.

(5) Not knowingly permit the begin insert private passenger motor end insert vehicle
to be operated for commercial use by a personal vehicle sharing
user while engaged in personal vehicle sharing.

(6) Use only private passenger begin insert motor end insert vehicles.

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(7) Facilitate the installation, operation, and maintenance of
computer hardware and software and signage, necessary for a
vehicle to be used in a personal vehicle sharing program, including
payment of the cost of damage or theft of that equipment and any
damage caused to the vehicle by the installation, operation, and
maintenance of that equipment.

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(d) Notwithstanding any other begin delete provision of end delete law or any provision
in a private passenger motor vehicle owner’s automobile begin insert liability end insert
insurance policy, in the event of a loss or injury that occurs during
any time period when the vehicle is under the operation and control
of a person, other than the vehicle owner, pursuant to a personal
vehicle sharing program, or otherwise under the control of a
personal vehicle sharing program, the personal vehicle sharing
program shall assume all liability of the owner and shall be
considered the owner of the vehicle for all purposes. Nothing in
this section limits the liability of the personal vehicle sharing
program for its acts or omissions that result in injury to any persons
as a result of the use or operation of a personal vehicle sharing
program.

(e) A personal vehicle sharing program shall continue to be
liable pursuant to subdivision (d) until both of the following occur:

(1) The private passenger motor vehicle is returned to begin delete a location
designated by the personal vehicle sharing program. end delete begin insert the location
designated and agreed to by both the vehicle owner and the user
of the vehicle, consistent with the terms and policies of the personal
vehicle sharing program. end insert

(2) The earliest of one of the following occurs:

(A) The expiration of the time period established for the
particular use of the begin insert private passenger motor end insert vehicle.

(B) The intent to terminate the personal vehicle sharing use is
verifiably communicated to the personal vehicle sharing program.

(C) The begin insert private passenger motor end insert vehicle’s owner takes
possession and control of the vehicle.

(f) The personal vehicle sharing program shall assume liability
for a claim in which a dispute exists as to who was in control of
the begin insert private passenger motor end insert vehicle when the loss occurred giving
rise to the claim, and the vehicle’s private passenger motor vehicle
insurer shall indemnify the personal vehicle sharing program to
the extent of its obligation under the applicable insurance begin delete policy, end delete
begin insert policy end insert if it is determined that the vehicle’s owner was in control
of the vehicle at the time of the loss.

(g) In the event that the owner of the begin insert private passenger motor end insert
vehicle is named as a defendant in a civil begin delete action, end delete begin insert action end insert for a loss
or injury that occurs during any time period when the vehicle is
under the operation and control of a person, other than the vehicle’s
owner, pursuant to a personal vehicle sharing program, or otherwise
under the control of a personal vehicle sharing program, the
personal vehicle sharing program shall have the duty to defend
and indemnify the vehicle’s owner, subject to the provisions of
subdivisions (d) and (f).

(h) Notwithstanding any other begin delete provision of end delete law or any provision
in a begin insert private passenger motor end insert vehicle owner’s automobile liability
insurance policy, while a begin delete private passenger motor end delete vehicle is used
by a person other than its owner pursuant to personal vehicle
sharing facilitated through a personal vehicle sharing program, all
of the following shall apply:

(1) The insurer of that begin insert private passenger motor end insert vehicle on file
with the Department of Motor Vehicles may exclude any and all
coverage afforded pursuant to its policy.

(2) The primary and excess insurer or insurers of the owners,
operators, and maintainers of the private passenger motor vehicle
used in a personal vehicle sharing program shall have the right to
notify an insured that it has no duty to defend or indemnify any
person or organization for liability for any loss that occurs during
use of the vehicle in a personal vehicle sharing program.

(i)  begin delete No end delete begin insert A end insert policy of insurance that is subject to Section 11580.1
or 11580.2 shall begin insert not end insert be canceled, voided, terminated, rescinded,
or nonrenewed solely on the basis that the private passenger motor
vehicle has been made available for personal vehicle sharing
pursuant to a personal vehicle sharing program that is in
compliance with the provisions of this section.

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SECTION 1.  

Section 12901 of the Insurance Code is amended
to read:

12901.  

(a) The commissioner shall be a person competent and
fully qualified to perform the duties of the office. Neither the
commissioner nor a deputy or employee shall, during his or her
tenure of office, be an officer, agent, or employee of an insurer or
directly or indirectly interested in an insurer or licensee under this
code, except (1) as a policyholder, or, (2) by virtue of relationship
by blood or marriage to a person interested in an insurer or licensee.

(b) If the commissioner, a deputy, or an employee holds a license
or permit issued under this code, he or she shall surrender it for
cancellation within 10 days after appointment and qualification.
Upon termination of his or her office or employment that license
or permit shall be reissued for the balance of the then current
license or permit year without fee or penalty.

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