BILL NUMBER: AB 1432 CHAPTERED 10/10/99 CHAPTER 808 FILED WITH SECRETARY OF STATE OCTOBER 10, 1999 APPROVED BY GOVERNOR OCTOBER 7, 1999 PASSED THE ASSEMBLY SEPTEMBER 10, 1999 PASSED THE SENATE SEPTEMBER 9, 1999 AMENDED IN SENATE SEPTEMBER 9, 1999 AMENDED IN ASSEMBLY APRIL 26, 1999 INTRODUCED BY Assembly Members Oller, Maddox, Villaraigosa, Scott, and Cedillo, and Senators Brulte, Escutia, and Speier FEBRUARY 26, 1999 An act to amend Sections 1600 and 1603 of the Insurance Code, and to add Section 12208 to the Revenue and Taxation Code, relating to insurance. LEGISLATIVE COUNSEL'S DIGEST AB 1432, Oller. Insurance: service of process: tax credit. (1) Existing law requires a foreign insurer to appoint a designated agent for service of process, and deems the agent in law to be a general agent and the principal agent of the insurer in this state. This bill would make clarifying changes including that the agent appointed may be a corporate officer of the insurer residing in this state, and that for service of process the agent is the principal agent of the insurer in this state. (2) Existing insurance tax law requires every insurer, as defined, doing business in this state, to annually pay a tax on gross premiums, as specified, at the rates provided by law. Except as otherwise provided, the rate of tax to be applied to the basis of the annual tax in respect to each year is 2.35%. SB 527 and SB 171 of the 1999-2000 Regular Session would provide for the issuance, until January 1, 2004, of policies of low-cost automobile insurance to certain low-income motorists in certain areas of the state. This bill would allow as a credit against that tax an amount equal to the amount of the gross premiums tax due on account of pilot project insurance for previously uninsured motorists, as specified. The bill would provide that the tax credit shall become operative only if SB 171 and SB 527 are also enacted and become operative on or before January 1, 2000. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 1600 of the Insurance Code is amended to read: 1600. The commissioner shall require every foreign insurer, as a condition precedent to receiving and holding a certificate of authority, to file and maintain in the commissioner's office a writing designating an agent for service of process. The agent designated may be any person residing in this state, including, but not limited to, any corporate officer of the insurer. The writing shall state the name of the agent and his or her place of business in this state with sufficient particularity so that he or she can readily be found by peace officers or process servers. Appointment of an agent reasonably available for service of papers, notice, proof of loss, summons or other process during business hours shall be continuously maintained by every admitted insurer subject to this article while it holds a valid and unrevoked certificate of authority. SEC. 2. Section 1603 of the Insurance Code is amended to read: 1603. The person appointed and designated pursuant to Section 1600 shall be deemed in law a general agent, and shall for service of process be the principal agent of the insurer in this state. SEC. 3. Section 12208 is added to the Revenue and Taxation Code, to read: 12208. (a) There shall be allowed as a credit against the amount of tax, as defined in Section 28 of Article XIII of the California Constitution, an amount equal to the amount of the gross premiums tax due from the insurer on account of pilot project insurance for previously uninsured motorists. (b) As used in this section "pilot project insurance for previously uninsured motorists" means motor vehicle liability insurance issued by an insurer under Article 5.5 (commencing with Section 11629.7) or Article 5.6 (commencing with Section 11629.9) of Chapter 1 of Part 3 of Division 2 of the Insurance Code, with respect to an insured who, at the time of the issuance, owned or operated a motor vehicle without proof of financial responsibility as defined in Section 16020 of the Vehicle Code, and any renewal of that insurance. SEC. 4. Section 3 of this act shall become operative only if SB 527 and SB 171 of the 1999-2000 Regular Session are also enacted and become effective on or before January 1, 2000.