SB 1302, as amended, 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 telephone 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 and would require the association to include the toll-free telephone number and the Internet Web site address on all communications with an applicant or an insured. The bill, beginning March 1, 2017, 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 delete the provision permitting an agent or broker to provide the toll-free telephone number of the plan as an alternative to assisting a person in making an application for insurance through the plan, and would instead require an agent or broker to assist a personbegin delete inend deletebegin insert
seeking his or her help in obtaining basic property insurance coverage byend insert making an applicationbegin insert for insuranceend insert through the plan by submitting an application at the person’sbegin delete request orend deletebegin insert request,end insert by providing the person with the California FAIR Plan’s Internet Web site address and the toll-free telephonebegin delete number.end deletebegin insert number, or by making an application for insurance, at the person’s request, and placing that person with or through an insurer that offers, or a surplus line broker that procures, basic property insurance
coverage.end insert
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 10095 of the Insurance Code is amended
2to read:
(a) Within 30 days following the effective date of this
4chapter, the association shall submit to the commissioner, for his
5or her review, a proposed plan of operation, consistent with the
6provisions of this chapter, creating an association consisting of all
7insurers licensed to write and engaged in writing in this state, on
8a direct basis, basic property insurance or any component of basic
9property insurance in homeowners or other dwelling multiperil
10policies. An insurer described in this subdivision shall be a member
11of the association and shall remain a member as a condition of its
12authority to transact those kinds of insurance in this state.
P3 1(b) The
proposed plan shall authorize the association to assume
2and cede reinsurance on risks written by insurers in conformity
3with the program.
4(c) Under the plan, an insurer shall participate in the writings,
5expenses, and profits and losses of the association in the proportion
6that its premiums written during the second preceding calendar
7year bear to the aggregate premiums written by all insurers in the
8program, excluding that portion of the premiums written
9attributable to the operation of the association. Premiums written
10on a policy of basic residential earthquake insurance issued by the
11California Earthquake Authority pursuant to Section 10089.6 shall
12be attributed to the insurer that writes the underlying policy of
13residential property insurance.
14(d) The plan shall provide for
administration by a governing
15committee under rules to be adopted by the governing committee
16with the approval of the commissioner. Voting on administrative
17questions of the association and facility shall be weighted in
18accordance with each insurer’s premiums written during the second
19preceding calendar year as disclosed in the reports filed by the
20insurer with the commissioner.
21(e) The plan shall provide for a plan to encourage persons to
22secure basic property insurance through normal channels from an
23admitted insurer or a licensed surplus line broker by informing
24those persons what steps they must take in order to secure the
25insurance through normal channels.
26(f) The plan shall be subject to the approval of the commissioner
27and shall go into effect upon the tentative approval
of the
28commissioner. The commissioner may, at any time, withdraw his
29or her tentative approval or he or she may, at any time after he or
30she has given his or her final approval, revoke that approval if he
31or she feels it is necessary to carry out the purposes of the chapter.
32The withdrawal or revocation of that approval shall not affect the
33validity of any policies executed prior to the date of the withdrawal.
34If the commissioner disapproves or withdraws or revokes his or
35her approval to all or any part of the plan of operation, the
36association shall, within 30 days, submit for review an
37appropriately revised plan or part of a revised plan, and, if the
38association fails to do so, or if the revised plan is unacceptable,
39the commissioner shall promulgate a plan of operation or part of
P4 1a plan as he or she may deem necessary to carry out the purposes
2of this chapter.
3(g) The association may, on its own initiative or at the request
4of the commissioner, amend the plan of operation, subject to
5approval by the commissioner, who shall have supervision of the
6inspection bureau, the facility, and the association. The
7commissioner or any person designated by him or her, shall have
8the power of visitation of and examination into the operation and
9free access to all the books, records, files, papers, and documents
10that relate to operation of the facility and association, and may
11summon, qualify, and examine as witnesses all persons having
12knowledge of those operations, including officers, agents, or
13employees thereof.
14(h) Every insurer member of the plan shall provide to applicants
15who are denied coverage the statewide toll-free telephone number
16for
the plan established pursuant to Section 10095.5 for the purpose
17of obtaining information and assistance in obtaining basic property
18insurance.
19(i) This section shall remain in effect only until March 1, 2017,
20and as of that date is repealed, unless a later enacted statute, that
21is enacted before March 1, 2017, deletes or extends that date.
Section 10095 is added to the Insurance Code, to read:
(a) Within 30 days following the effective date of this
24chapter, the association shall submit to the commissioner, for his
25or her review, a proposed plan of operation, consistent with the
26provisions of this chapter, creating an association consisting of all
27insurers licensed to write and engaged in writing in this state, on
28a direct basis, basic property insurance or any component of basic
29property insurance in homeowners or other dwelling multiperil
30policies. An insurer described in this subdivision shall be a member
31of the association and shall remain a member as a condition of its
32authority to transact those kinds of insurance in this state.
33(b) The
proposed plan shall authorize the association to assume
34and cede reinsurance on risks written by insurers in conformity
35with the program.
36(c) Under the plan, an insurer shall participate in the writings,
37expenses, and profits and losses of the association in the proportion
38that its premiums written during the second preceding calendar
39year bear to the aggregate premiums written by all insurers in the
40program, excluding that portion of the premiums written
P5 1attributable to the operation of the association. Premiums written
2on a policy of basic residential earthquake insurance issued by the
3California Earthquake Authority pursuant to Section 10089.6 shall
4be attributed to the insurer that writes the underlying policy of
5residential property insurance.
6(d) The plan shall provide for
administration by a governing
7committee under rules to be adopted by the governing committee
8with the approval of the commissioner. Voting on administrative
9questions of the association and facility shall be weighted in
10accordance with each insurer’s premiums written during the second
11preceding calendar year as disclosed in the reports filed by the
12insurer with the commissioner.
13(e) The plan shall provide for a plan to encourage persons to
14secure basic property insurance through normal channels from an
15admitted insurer or a licensed surplus line broker by informing
16those persons what steps they must take in order to secure the
17insurance through normal channels.
18(f) The plan shall be subject to the approval of the commissioner
19and shall go into effect upon the tentative approval
of the
20commissioner. The commissioner may, at any time, withdraw his
21or her tentative approval or he or she may, at any time after he or
22she has given his or her final approval, revoke that approval if he
23or she feels it is necessary to carry out the purposes of the chapter.
24The withdrawal or revocation of that approval shall not affect the
25validity of any policies executed prior to the date of the withdrawal.
26If the commissioner disapproves or withdraws or revokes his or
27her approval to all or any part of the plan of operation, the
28association shall, within 30 days, submit for review an
29appropriately revised plan or part of a revised plan, and, if the
30association fails to do so, or if the revised plan is unacceptable,
31the commissioner shall promulgate a plan of operation or part of
32a plan as he or she may deem necessary to carry out the purposes
33of this chapter.
34(g) The association may, on its own initiative or at the request
35of the commissioner, amend the plan of operation, subject to
36approval by the commissioner, who shall have supervision of the
37inspection bureau, the facility, and the association. The
38commissioner or any person designated by him or her, shall have
39the power of visitation of and examination into the operation and
40free access to all the books, records, files, papers, and documents
P6 1that relate to operation of the facility and association, and may
2summon, qualify, and examine as witnesses all persons having
3knowledge of those operations, including officers, agents, or
4employees thereof.
5(h) An insurer member of the plan shall provide to an applicant
6who is denied coverage, or a policyholder whose policy is canceled
7or not
renewed, the Internet Web site address and statewide toll-free
8telephone number for the plan established pursuant to Section
910095.5 for the purpose of obtaining information and assistance
10in obtaining basic property insurance.
11(i) This section shall become operative March 1, 2017.
Section 10095.5 of the Insurance Code is amended to
13read:
(a) The association shall establish and maintain an
15Internet Web site and a statewide toll-free telephone number
16through which a person may receive information and assistance
17in applying for insurance through the plan. The association shall
18cause the toll-free telephone number to be published in all general
19distribution telephone directories in the state and shall include the
20toll-free telephone number and Internet Web site address on all
21communications with an applicant or insured.
22(b) An insurance agent or broker transacting basic property
23
insurance shall assist a person in making an application for
24insurance through the plan by submitting an application at the
25person’s request or by providing the person with the California
26FAIR Plan’s Internet Web site address and the toll-free telephone
27number.
28
(b) An insurance agent or broker transacting basic property
29insurance shall assist a person seeking his or her help in obtaining
30basic property insurance coverage by any one of the following
31methods:
32
(1) Making an application for insurance through the plan by
33submitting an application at the person’s request.
34
(2) Providing the person with the California FAIR Plan’s
35Internet Web site address and the toll-free telephone number.
36
(3) Making an application for insurance, at the person’s request,
37and placing that person with or through an insurer that offers, or
38a surplus line broker that procures, basic property insurance
39coverage.
This act is an urgency statute necessary for the
2immediate preservation of the public peace, health, or safety within
3the meaning of Article IV of the Constitution and shall go into
4immediate effect. The facts constituting the necessity are:
5In order to have the consumer protections proposed in this act
6become operative as soon as possible for homeowners who are
7having difficulty obtaining insurance coverage for their property
8because they are located in high-risk brush and wildfire areas, and
9to provide insurers adequate time to amend and prepare their
10required notices to customers about the availability of coverage
11through the California FAIR (fair access
to insurance requirements)
12Plan, it is necessary for this act to take effect immediately.
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