BILL NUMBER: SB 1302 INTRODUCED
BILL TEXT
INTRODUCED BY Senator McGuire
(Coauthors: Senators Berryhill and Roth)
(Coauthor: Assembly Member Dodd)
FEBRUARY 19, 2016
An act to amend Sections 10095 and 10095.5 of the Insurance Code,
relating to insurance, and declaring the urgency thereof, to take
effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
SB 1302, as introduced, McGuire. Basic property insurance:
California FAIR Plan.
Under existing law, the California FAIR (fair access to insurance
requirements) Plan Association is a joint reinsurance association of
state insurers that is established to, among other things, assist
persons in securing basic property insurance for qualified property
for which insurance cannot be obtained through the normal insurance
market. Existing law requires the association to establish and
maintain a toll-free telephone number through which a person may
receive assistance in applying for basic property insurance. Existing
law requires an insurer member of the plan to provide to an
applicant who is denied coverage the toll-free number for the plan
for information and assistance in obtaining basic property insurance.
Existing law requires an agent or broker transacting basic property
insurance to either assist a person in making an application for
insurance through the plan or to provide the person with that
toll-free telephone number.
This bill would additionally require the association to establish
and maintain an Internet Web site at which a person may receive
information and assistance in applying for insurance through the
plan. The bill would require an insurer member to provide an
applicant denied coverage or a policyholder whose policy is canceled
or not renewed both that Internet Web site address and toll-free
telephone number. The bill would require the association to cause
that toll-free telephone number and Internet Web site address to be
included in all communications with an applicant or insured. The bill
would require an insurance agent or broker transacting basic
property insurance to assist a person in making an application for
insurance through the plan, and would delete the provision that
permitted the agent or broker, as an alternative, to provide the
person the toll-free telephone number.
This bill would declare that it is to take effect immediately as
an urgency statute.
Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 10095 of the Insurance Code is amended to read:
10095. (a) Within 30 days following the effective date of this
chapter, the association shall submit to the commissioner, for his or
her review, a proposed plan of operation, consistent with the
provisions of this chapter, creating an association consisting of all
insurers licensed to write and engaged in writing in this state, on
a direct basis, basic property insurance or any component
thereof of basic property insurance in homeowners
or other dwelling multiperil policies. Every
An insurer so described in this
subdivision shall be a member of the association and shall
remain a member as a condition of its authority to transact those
kinds of insurance in this state.
(b) The proposed plan shall authorize the association to assume
and cede reinsurance on risks written by insurers in conformity with
the program.
(c) Under the plan, each an insurer
shall participate in the writings, expenses, profits and losses of
the association in the proportion that its premiums written during
the second preceding calendar year bear to the aggregate premiums
written by all insurers in the program, excluding that portion of the
premiums written attributable to the operation of the association.
Premiums written on a policy of basic residential earthquake
insurance issued by the California Earthquake Authority pursuant to
Section 10089.6 shall be attributed to the insurer that writes the
underlying policy of residential property insurance.
(d) The plan shall provide for administration by a governing
committee under rules to be adopted by it the
governing committee with the approval of the commissioner.
Voting on administrative questions of the association and facility
shall be weighted in accordance with each insurer's premiums written
during the second preceding calendar year as disclosed in the reports
filed by the insurer with the commissioner.
(e) The plan shall provide for a plan to encourage persons to
secure basic property insurance through normal channels from an
admitted insurer or a licensed surplus line broker by informing those
persons what steps they must take in order to secure the insurance
through normal channels.
(f) The plan shall be subject to the approval of the commissioner
and shall go into effect upon the tentative approval of the
commissioner. The commissioner may, at any time, withdraw his or her
tentative approval or he or she may, at any time after he or she has
given his or her final approval, revoke that approval if he or she
feels it is necessary to carry out the purposes of the chapter. The
withdrawal or revocation of that approval shall not affect the
validity of any policies executed prior to the date of the
withdrawal. If the commissioner disapproves or withdraws or revokes
his or her approval to all or any part of the plan of operation, the
association shall, within 30 days, submit for review an appropriately
revised plan or part thereof, of a revised
plan, and, if the association fails to do so, or if the revised
plan so filed is unacceptable, the commissioner
shall promulgate a plan of operation or part thereof
of a plan as he or she may deem necessary to
carry out the purpose purposes of this
chapter.
(g) The association may, on its own initiative or at the request
of the commissioner, amend the plan of operation, subject to approval
by the commissioner, who shall have supervision of the inspection
bureau, the facility and the association. The commissioner or any
person designated by him or her, shall have the power of visitation
of and examination into the operation and free access to all the
books, records, files, papers, and documents that relate to operation
of the facility and association, and may summon, qualify, and
examine as witnesses all persons having knowledge of those
operations, including officers, agents, or employees thereof.
(h) Every An insurer member of the
plan shall provide to applicants an applicant
who are is denied
coverage coverage, or a policyholder whose policy is
canceled or not renewed, the Internet Web site address and
statewide toll-free "800" telephone
number for the plan established pursuant to Section 10095.5 for
the purpose of obtaining information and assistance in obtaining
basic property insurance.
SEC. 2. Section 10095.5 of the Insurance Code is amended to read:
10095.5. (a) The association shall establish and maintain an
Internet Web site and a statewide toll-free "800"
telephone number through which persons
a person may receive information and
assistance in applying for insurance through the plan. The
association shall cause the toll-free telephone number to
be published in all general distribution telephone directories in
California. the state and shall include the
toll-free telephone and Internet Web site address on all
communications with an applicant or insured.
(b) Every An insurance agent or
broker transacting basic property insurance shall either
assist persons a person in
making an application for insurance through the
plan or provide persons who desire that insurance with the toll-free
number established pursuant to subdivision (a). plan.
SEC. 3. This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect. The facts constituting the necessity are:
In order to have the consumer protections proposed in this act
become operative as soon as possible for homeowners who are having
difficulty obtaining insurance coverage for their property because
they are located in high-risk brush and wildfire areas, and to
provide insurers adequate time to amend and prepare their required
notices to customers about the availability of coverage through the
FAIR (fair access to insurance requirements) Plan, it is necessary
for this act to take effect immediately.