BILL NUMBER: AB 1309 ENROLLED
BILL TEXT
PASSED THE SENATE SEPTEMBER 7, 1999
PASSED THE ASSEMBLY SEPTEMBER 7, 1999
AMENDED IN SENATE SEPTEMBER 7, 1999
AMENDED IN ASSEMBLY MAY 24, 1999
AMENDED IN ASSEMBLY APRIL 27, 1999
AMENDED IN ASSEMBLY APRIL 6, 1999
INTRODUCED BY Assembly Member Scott
(Coauthor: Senator Speier)
FEBRUARY 26, 1999
An act to amend Sections 2870 and 2871 of the Civil Code, to amend
Section 1063.1 of, and to add Section 1872.91 to, the Insurance
Code, and to amend Section 3702.8 of the Labor Code, relating to
insurance.
LEGISLATIVE COUNSEL'S DIGEST
AB 1309, Scott. Insurance.
(1) Existing law requires employers that elect to be self-insured
for workers' compensation liabilities to obtain a certificate of
consent to self-insure from the Director of Industrial Relations, as
specified. Existing law also requires private employers that cease
to be self-insured to discharge their continuing obligations to
secure the payment of workers' compensation that accrued during the
period of self-insurance by complying with various procedures,
including the deposit and maintenance of a security deposit with the
director for accrued liability. Under these provisions, an employer
that ceases to be self-insured may alternatively discharge this
obligation by purchasing a special excess workers' compensation
insurance policy, and an employer that does so must maintain the
required security deposit for a period of 3 years after the policy is
issued, unless the insurer issuing the policy posts a financial
guarantee bond with the director.
This bill would provide that certain of the provisions relating to
an employer that ceases to be a self-insured employer also apply to
public employers. It would provide that any employer, who is
currently self-insured or who has ceased to be self-insured, may
choose to discharge, without recourse or liability to the
Self-Insurers Security Fund, its continuing obligations as a
self-insurer, by purchasing a special excess workers' compensation
insurance policy, in accordance with existing provisions of law
regarding the transfer of liability to insurers and subject to
certain approvals and rate filing requirements, as specified. The
bill would provide that the provisions relating to the security
deposit only apply to private self-insured employers. The bill would
also delete provisions relating to the issuance of a financial
guarantee bond and instead provide that in order for the special
excess workers' compensation policy to discharge the obligation of a
private employer to maintain a security deposit with the director,
the policy shall provide coverage for all claims arising out of that
liability for the applicable period, and to the extent the policy
does not provide coverage for all claims, the employer shall maintain
with the director the required security deposit for a period of 3
years after the issuance date of the policy. This bill would require
the director to adopt regulations reasonably necessary to implement
these provisions.
(2) Existing law prohibits insurers from engaging in unfair claims
settlement practices, and provides for sanctions against insurers
who engage in unfair claims settlement practices with respect to
coverage under a policy of liability insurance by means of
administrative sanctions against the insurer. SB 1237 of the
1999-2000 Regular Session, the Fair Insurance Responsibility Act of
2000 or "FAIR," would provide that an insurer shall act in good faith
toward and deal fairly with 3rd-party claimants. It would provide
that if an insurer engages in unfair claims settlement practices with
respect to a 3rd-party claimant, the 3rd-party claimant would
generally have the right, upon meeting certain conditions, to assert
a cause of action against the insurer, except as specified. It would
permit binding arbitration for specified personal injury claims.
This bill would make changes to the provisions of SB 1237 if SB
1237 becomes operative. Among those changes would be the elimination
of the use of verdict amounts as evidence of insurer bad faith;
restricting 3rd-party bad faith actions to individuals for bodily
injury, as defined, wrongful death, or property damage resulting from
an incident involving a motor vehicle; providing for a defense, as
specified; limiting the prospective effect of that bill's new
3rd-party rights as to prior accidents, events, occurrences, or
losses; and revising the presumption regarding insurer good faith and
fair dealing arising from the submission of relevant claims to
arbitration.
The bill would require the State Auditor to study the effects of
FAIR, and to deliver his or her report to the Governor and the
Legislature on or before January 1, 2005.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds that public employers are liable
for the payment of workers' compensation benefits in substantial
amounts. These amounts are owed to current or former county
employees who have previously been injured on the job, and to others
in accordance with applicable law. The Legislature finds that new
liabilities are created every year, as additional persons become
eligible for workers' compensation benefits.
SEC. 2. Section 2870 of the Civil Code, as added by Senate Bill
1237 of the 1999-2000 Regular Session, is amended to read:
2870. (a) For purposes of this title, the following definitions
shall apply:
(1) "Third-party claimant" or "claimant" shall mean each
individual seeking recovery against an insured under a liability
insurance policy or a self-funded liability protection program, fund,
or plan, for bodily injury; wrongful death; or property damage
resulting from an incident involving a motor vehicle; including,
without limitation, damages resulting from loss of consortium or loss
of care, comfort, society and the like resulting from wrongful
death.
(2) "Insured" shall mean a natural person or entity named as an
insured in a liability insurance policy or a private self-funded
liability protection program, fund, or plan; a natural person or
entity who is identified as an additional insured under a liability
insurance policy or a private self-funded liability protection
program, fund, or plan; a natural person or entity who is an
additional insured under the definitions of insured persons set forth
in a liability insurance policy or a private self-funded liability
protection program, fund, or plan; a natural person or entity who is
defined, by law, as an insured under a liability insurance policy or
a private self-funded liability protection program, fund, or plan; or
cooperative corporations or interindemnity arrangements provided for
under Section 1280.7 of the Insurance Code.
(3) "Insurer" shall mean any insurer licensed pursuant to, or
subject to regulation under, the Insurance Code which provides
liability insurance to an insured against whom a third-party claimant
makes a claim for bodily injury, or for property damage resulting
from an incident involving a motor vehicle, and the third-party
administrator of any private self-funded liability protection
program, fund, or plan; or cooperative corporations or interindemnity
arrangements provided for under Section 1280.7 of the Insurance
Code. However, "insurer" does not include the self-funded liability
protection program, fund, or plan, itself, an insurer named as the
insurer under a policy of workers' compensation insurance, nor a
self-insured public entity, a private administrator for a public
entity, or a public entity insured by a private insurer or carrier.
For purposes of this section, "public entity" has the meaning set
forth in Section 811.2 of the Government Code.
(4) "Liability insurance" shall mean that portion of a personal or
commercial insurance policy or a private self-funded liability
protection program, fund or plan, which provides liability coverage
for bodily injury, or for property damage resulting from an incident
involving a motor vehicle.
(5) "Bodily injury" shall mean actual physical injury, sickness,
or disease sustained by a person, including death therefrom. "Bodily
injury" shall not mean (a) emotional distress, of any kind,
resulting from economic loss, or (b) emotional distress resulting
from a cause other than economic loss unless accompanied by actual
physical manifestations of such emotional distress.
SEC. 3. Section 2871 of the Civil Code, as added by Senate Bill
1237 of the 1999-2000 Regular Session, is amended to read:
2871. (a) (1) Every insurer, as defined in paragraph (3) of
subdivision (a) of Section 2870, doing business in the State of
California shall act in good faith toward and deal fairly with
third-party claimants. A third-party claimant may bring an action
against an insurer doing business in the State of California to
recover damages, including general, special, and exemplary damages,
for commission of any unfair claims settlement practice specified in
paragraph (1), (2), (3), (5), (8), (9), (10), (11), (12), (13), (14),
or (15) of subdivision (h) of Section 790.03 of the Insurance Code
as it relates to a third-party claimant.
(2) (A) In considering a third-party claim an insurer shall make
an honest, intelligent and knowledgeable evaluation of the claim on
its merits. However, an insurer shall not be considered to have
violated its obligation to act in good faith and deal fairly with a
third-party claimant because of the insurer's honest mistake in
judgment in connection with the settlement of a claim.
(B) The fact that an insurer did not settle a claim is not
necessarily proof of bad faith.
(b) A third-party claimant shall not be entitled to assert the
remedies set forth in subdivision (a) unless the third-party claimant
(1) obtains in the underlying action a final judgment after trial, a
judgment after default, or an arbitration award arising from a
contractual predispute binding arbitration clause or agreement, and
(2) the third-party claimant makes a written demand by certified mail
to settle the claim in the underlying action, and the claimant's
judgment or arbitration award in that prior proceeding exceeded the
amount of the final written demand on all claims by the third-party
claimant made before the trial, entry of default or arbitration
listed above. The final written demand sent by certified mail may
not exceed the applicable policy limits and shall be deemed rejected
if not responded to within 30 days of receipt of the final written
demand.
(c) The remedies set forth in this title shall apply to any
insurer who violates the standards set forth in subdivision (a) in
its handling, processing, or settlement of the claims made by a
third-party claimant under the insured's insurance protection.
(d) A professional liability insurer for medical, health care, or
legal malpractice is not liable under this title if both of the
following conditions apply:
(1) The consent of the policyholder to settlement is a
prerequisite to settlement.
(2) The policyholder withholds consent to settlement.
(e) A person injured in an accident arising out of the operation
or use of a motor vehicle, who at the time of the accident was
operating a motor vehicle in violation of Section 23152 or 23153 of
the Vehicle Code, and was convicted of that offense, may not assert a
cause of action under this section.
(f) Any time period within which an action must be commenced
pursuant to any applicable statute of limitations shall not begin
until the underlying claim has been resolved through a final
judgment. In the event of an appeal by either party, resolution of
the appeal shall be a prerequisite to a claim under this title.
(g) Nothing in this title shall abrogate or limit any theory of
liability or remedy otherwise available at law including, but not
limited to, tort remedies for the breach of implied covenant and fair
dealing or any theory of liability or remedy based on Comunale v.
Traders & General Ins. Co. (1958) 50 Cal.2d 654 or Crisci v.
Security Ins. Co. (1967) 66 Cal.2d 425.
(h) The provisions of this title are prospective and are only
applicable as follows:
(1) To accidents, events, occurrences, or losses that occur on or
after January 1, 2000.
(2) To conduct by any insurer, its agents or employees concerning
accidents, events, occurrences, or losses that occur on or after
January 1, 2000.
SEC. 4. Section 1778 of the Code of Civil Procedure, as added by
Senate Bill 1237 of the 1999-2000 Regular Session, is amended to
read:
1778. If the insurer requests or agrees to submit a claim to
arbitration under Section 1777 the insurer shall be conclusively
presumed to have complied with the duties under subdivision (a) of
Section 2871 of the Civil Code.
SEC. 5. Section 1063.1 of the Insurance Code is amended to read:
1063.1. As used in this article:
(a) "Member insurer" means an insurer required to be a member of
the association in accordance with subdivision (a) of Section 1063,
except and to the extent that the insurer is participating in an
insolvency program adopted by the United States government.
(b) "Insolvent insurer" means a member insurer against which an
order of liquidation or receivership with a finding of insolvency has
been entered by a court of competent jurisdiction.
(c) (1) "Covered claims" means the obligations of an insolvent
insurer, including the obligation for unearned premiums, (i) imposed
by law and within the coverage of an insurance policy of the
insolvent insurer; (ii) which were unpaid by the insolvent insurer;
(iii) which are presented as a claim to the liquidator in this state
or to the association on or before the last date fixed for the filing
of claims in the domiciliary liquidating proceedings; (iv) which
were incurred prior to the date coverage under the policy terminated
and prior to, on, or within 30 days after the date the liquidator was
appointed; (v) for which the assets of the insolvent insurer are
insufficient to discharge in full; (vi) in the case of a policy of
workers' compensation insurance, to provide workers' compensation
benefits under the workers' compensation law of this state; and (vii)
in the case of other classes of insurance if the claimant or insured
is a resident of this state at the time of the insured occurrence,
or the property from which the claim arises is permanently located in
this state.
(2) "Covered claims" also include the obligations assumed by an
assuming insurer from a ceding insurer where the assuming insurer
subsequently becomes an insolvent insurer if, at the time of the
insolvency of the assuming insurer, the ceding insurer is no longer
admitted to transact business in this state. Both the assuming
insurer and the ceding insurer shall have been member insurers at the
time the assumption was made. "Covered claims" under this paragraph
shall be required to satisfy the requirements of subparagraphs (i)
to (vii), inclusive, of paragraph (1), except for the requirement
that the claims be against policies of the insolvent insurer. The
association shall have a right to recover any deposit, bond, or other
assets that may have been required to be posted by the ceding
company to the extent of covered claim payments and shall be
subrogated to any rights the policyholders may have against the
ceding insurer.
(3) "Covered claims" does not include obligations arising from the
following:
(i) Life, annuity, health, or disability insurance.
(ii) Mortgage guaranty, financial guaranty, or other forms of
insurance offering protection against investment risks.
(iii) Fidelity or surety insurance including fidelity or surety
bonds, or any other bonding obligations.
(iv) Credit insurance.
(v) Title insurance.
(vi) Ocean marine insurance or ocean marine coverage under any
insurance policy including claims arising from the following: the
Jones Act (46 U.S.C.A. Sec. 688), the Longshore and Harbor Workers'
Compensation Act (33 U.S.C.A. Sec. 901 et seq.), or any other similar
federal statutory enactment, or any endorsement or policy affording
protection and indemnity coverage.
(vii) Any claims servicing agreement or insurance policy providing
retroactive insurance of a known loss or losses, except a special
excess workers' compensation policy issued pursuant to subdivision
(c) of Section 3702.8 of the Labor Code that covers all or any part
of workers' compensation liabilities of an employer that is issued,
or was previously issued, a certificate of consent to self-insure
pursuant to subdivision (b) of Section 3700 of the Labor Code.
(4) "Covered claims" does not include any obligations of the
insolvent insurer arising out of any reinsurance contracts, nor any
obligations incurred after the expiration date of the insurance
policy or after the insurance policy has been replaced by the insured
or canceled at the insured's request, or after the insurance policy
has been canceled by the association as provided in this chapter, or
after the insurance policy has been canceled by the liquidator, nor
any obligations to any state or to the federal government.
(5) "Covered claims" does not include any obligations to insurers,
insurance pools, or underwriting associations, nor their claims for
contribution, indemnity, or subrogation, equitable or otherwise,
except as otherwise provided in this chapter.
An insurer, insurance pool, or underwriting association may not
maintain, in its own name or in the name of its insured, any claim or
legal action against the insured of the insolvent insurer for
contribution, indemnity or by way of subrogation, except insofar as,
and to the extent only, that the claim exceeds the policy limits of
the insolvent insurer's policy. In those claims or legal actions,
the insured of the insolvent insurer is entitled to a credit or
setoff in the amount of the policy limits of the insolvent insurer's
policy, or in the amount of the limits remaining, where those limits
have been diminished by the payment of other claims.
(6) "Covered claims," except in cases involving a claim for
workers' compensation benefits or for unearned premiums, does not
include any claim in an amount of one hundred dollars ($100) or less,
nor that portion of any claim that is in excess of any applicable
limits provided in the insurance policy issued by the insolvent
insurer.
(7) "Covered claims" does not include that portion of any claim,
other than a claim for workers' compensation benefits, that is in
excess of five hundred thousand dollars ($500,000).
(8) "Covered claims" does not include any amount awarded as
punitive or exemplary damages.
(9) "Covered claims" does not include (i) any claim to the extent
it is covered by any other insurance of a class covered by this
article available to the claimant or insured nor (ii) any claim by
any person other than the original claimant under the insurance
policy in his or her own name, his or her assignee as the person
entitled thereto under a premium finance agreement as defined in
Section 673 and entered into prior to insolvency, his or her
executor, administrator, guardian or other personal representative or
trustee in bankruptcy and does not include any claim asserted by an
assignee or one claiming by right of subrogation, except as otherwise
provided in this chapter.
(10) "Covered claims" does not include any obligations arising out
of the issuance of an insurance policy written by the separate
division of the State Compensation Insurance Fund pursuant to
Sections 11802 and 11803.
(11) "Covered claims" does not include any obligations of the
insolvent insurer arising from any policy or contract of insurance
issued or renewed prior to the insolvent insurer's admission to
transact insurance in the State of California.
(12) "Covered claims" does not include surplus deposits of
subscribers as defined in Section 1374.1.
(d) "Admitted to transact insurance in this state" means an
insurer possessing a valid certificate of authority issued by the
department.
(e) "Affiliate" means a person who directly or indirectly, through
one or more intermediaries, controls, is controlled by, or is under
common control with an insolvent insurer on December 31 of the year
next preceding the date the insurer becomes an insolvent insurer.
(f) "Control" means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies
of a person, whether through the ownership of voting securities, by
contract other than a commercial contract for goods or nonmanagement
services, or otherwise, unless the power is the result of an official
position with or corporate office held by the person. Control is
presumed to exist if any person, directly or indirectly, owns,
controls, holds with the power to vote, or holds proxies
representing, 10 percent or more of the voting securities of any
other person. This presumption may be rebutted by showing that
control does not in fact exist.
(g) "Claimant" means any insured making a first party claim or any
person instituting a liability claim; provided that no person who is
an affiliate of the insolvent insurer may be a claimant.
(h) "Ocean marine insurance" includes marine insurance as defined
in Section 103, except for inland marine insurance, as well as any
other form of insurance, regardless of the name, label, or marketing
designation of the insurance policy, that insures against maritime
perils or risks and other related perils or risks, which are usually
insured against by traditional marine insurance such as hull and
machinery, marine builders' risks, and marine protection and
indemnity. Those perils and risks insured against include, without
limitation, loss, damage, or expense or legal liability of the
insured arising out of or incident to ownership, operation,
chartering, maintenance, use, repair, or construction of any vessel,
craft or instrumentality in use in ocean or inland waterways,
including liability of the insured for personal injury, illness, or
death for loss or damage to the property of the insured or another
person.
(i) "Unearned premium" means that portion of a premium that had
not been earned because of the cancellation of the insolvent insurer'
s policy and is that premium remaining for the unexpired term of the
insolvent insurer's policy. "Unearned premium" does not include any
amount sought as return of a premium under any policy providing
retroactive insurance of a known loss or return of a premium under
any retrospectively rated policy or a policy subject to a contingent
surcharge or any policy in which the final determination of the
premium cost is computed after expiration of the policy and is
calculated on the basis of actual loss experience during the policy
period.
SEC. 6. Section 1872.91 is added to the Insurance Code, to read:
1872.91. (a) The State Auditor shall prepare a report analyzing
and evaluating the effect of the Fair Insurance Responsibility Act of
2000 (FAIR) on California insurance claims practices and rates. The
report shall identify changes in claim practices and patterns caused
by the enactment of FAIR. The report shall be delivered to the
Governor and the Legislature on or before January 1, 2005. The
report shall be funded from existing resources of the State Auditor.
The report shall include, but not be limited to, an analysis of the
following:
(1) The number of complaints to the Department of Insurance
regarding unfair claims settlement practices.
(2) The number and type of actions taken by the Department of
Insurance in response to those complaints.
(3) The number of cases in which the parties enter into voluntary
binding arbitration under Title 11.65 (commencing with Section 1776)
of Part 3 of the Code of Civil Procedure, and the disposition of
those cases, including whether the use of retired judges as
arbitrators has provided an adequate pool of arbitrators.
(4) The number of cases that proceed to trial and the disposition
of these cases, including appeals.
(5) The number of actions filed under Title 13.7 (commencing with
Section 2870) of Part 4 of Division 3 of the Civil Code, and the
disposition of these cases, including appeals.
(6) An analysis of the disposition of cases of third-party
claimants who are not eligible to file a bad faith action and whether
these claimants have been subject to unfair claims settlement
practices.
(b) As part of the study, the State Auditor shall conduct a
statistical closed claim study to compare auto insurance claims
closed in 1999 and 2003. The study shall provide at least the same
kinds of information as the August 1990 study, "Automobile Claims, A
study of Closed Claim Payments Patterns in California," prepared by
the Statistical Analysis Bureau. The Insurance Commissioner shall
cooperate with the State Auditor in this study, and shall provide
information requested by the State Auditor. The study shall identify
the component costs of claims, including, but not limited to, the
items listed in subdivision (c) by coverage for major settlement
methods, including each of the following:
(1) Closed without payment, no litigation.
(2) Closed with payment, no litigation.
(3) Closed without payment, litigated.
(4) Closed with payment after mediation.
(5) Closed with payment after judicial arbitration.
(6) Closed with payment after voluntary binding arbitration.
(7) Closed with payment after trial, including appeals.
(c) The part of the study required in subdivision (b) shall
include the following items, shown separately by coverage:
(1) Number of claims.
(2) Amount of losses or claim payouts, including both economic
damages shown separately by category and noneconomic damages.
(3) Punitive damages or bad faith awards, when applicable.
(4) Defense costs.
(5) Other claim or loss adjustment expenses.
(6) Time period between filing of claim and final settlement.
SEC. 7. Section 3702.8 of the Labor Code is amended to read:
3702.8. (a) Employers who have ceased to be self-insured
employers shall discharge their continuing obligations to secure the
payment of workers' compensation that accrued during the period of
self-insurance, for purposes of Sections 3700, 3700.5, 3706, and
3715, and shall comply with all of the following obligations of
current certificate holders:
(1) Filing annual reports as deemed necessary by the director to
carry out the requirements of this chapter.
(2) In the case of a private employer, depositing and maintaining
a security deposit for accrued liability for the payment of any
workers' compensation that may become due, pursuant to subdivision
(b) of Section 3700 and Section 3701, except as provided in
subdivision (c).
(3) Paying within 30 days all assessments of which notice is sent,
pursuant to subdivision (b) of Section 3745, within 36 months from
the last day the employer's certificate of self-insurance was in
effect. Assessments shall be based on the benefits paid by the
employer during the last full calendar year of self-insurance on
claims incurred during that year.
(b) In addition to proceedings to establish liabilities and
penalties otherwise provided, a failure to comply may be the subject
of a proceeding before the director. An appeal from the director's
determination shall be taken to the appropriate superior court by
petition for writ of mandate.
(c) Notwithstanding subdivision (a), any employer who is currently
self-insured or who has ceased to be self-insured may purchase a
special excess workers' compensation policy to discharge any or all
of the employer's continuing obligations as a self-insurer to pay
compensation or to secure the payment of compensation.
(1) The special excess workers' compensation insurance policy
shall be issued by an insurer authorized to transact workers'
compensation insurance in this state.
(2) Each carrier's special excess workers' compensation policy
shall be approved as to form and substance by the Insurance
Commissioner, and rates for special excess workers' compensation
insurance shall be subject to the filing requirements set forth in
Section 11735 of the Insurance Code.
(3) Each special excess workers' compensation insurance policy
shall be submitted by the employer to the director. The director
shall adopt and publish minimum insurer financial rating standards
for companies issuing special excess workers' compensation policies.
(4) Upon acceptance by the director, a special excess workers'
compensation policy shall provide coverage for all or any portion of
the purchasing employer's claims for compensation arising out of
injuries occurring during the period the employer was self-insured in
accordance with Sections 3755, 3756, and 3757 of the Labor Code and
Sections 11651 and 11654 of the Insurance Code. The director's
acceptance shall discharge the Self-Insurer's Security Fund, without
recourse or liability to the Self-Insurer's Security Fund, of any
continuing liability for the claims covered by the special excess
workers' compensation insurance policy.
(5) For public employers, no security deposit or financial
guarantee bond or other security shall be required. The director
shall set minimum financial rating standards for insurers issuing
special excess workers' compensation policies for public employers.
(d) (1) In order for the special excess workers' compensation
insurance policy to discharge the full obligations of a private
employer to maintain a security deposit with the director for the
payment of self-insured claims, applicable to the period to be
covered by the policy, the special excess policy shall provide
coverage for all claims for compensation arising out of that
liability. The employer shall maintain the required deposit for the
period covered by the policy with the director for a period of three
years after the issuance date of the special excess policy.
(2) If the special workers' compensation insurance policy does not
provide coverage for all of the continuing obligations for which the
private self-insured employer is liable, to the extent the employer'
s obligations are not covered by the policy a private employer shall
maintain the required deposit with the director. In addition, the
employer shall maintain with the director the required deposit for
the period covered by the policy for a period of three years after
the issuance date of the special excess policy.
(e) The director shall adopt regulations pursuant to Section
3702.10 that are reasonably necessary to implement this section in
order to reasonably protect injured workers, employers, the
Self-Insurers' Security Fund, and the California Insurance Guarantee
Association.
(f) The posting of a special excess workers' compensation
insurance policy with the director shall discharge the obligation of
the Self-Insurer's Security Fund pursuant to Section 3744 to pay
claims in the event of an insolvency of a private employer to the
extent of coverage of compensation liabilities under the special
excess workers' compensation insurance policy. The California
Insurance Guarantee Association shall be advised by the director
whenever a special excess workers' compensation insurance policy is
posted.
SEC. 8. The provisions of Sections 2, 3, and 5 of this act, the
provisions of Title 13.7 (commencing with Section 2870) of Part 4 of
Division 3 of the Civil Code, and the provisions of Title 11.65
(commencing with Section
1776) of Part 3 of the Code of Civil Procedure, are severable. If
any of those provisions or any of their applications is held invalid,
that invalidity shall not affect other provisions or applications
that can be given effect without the invalid provision or
application.
SEC. 9. Sections 2, 3, 5, and 7 of this act shall not become
operative unless Senate Bill 1237 of the 1999-2000 Regular Session is
enacted, becomes operative, and this act is chaptered after Senate
Bill 1237.