BILL NUMBER: SB 2107	CHAPTERED  09/30/00

	CHAPTER   1091
	FILED WITH SECRETARY OF STATE   SEPTEMBER 30, 2000
	APPROVED BY GOVERNOR   SEPTEMBER 30, 2000
	PASSED THE SENATE   AUGUST 30, 2000
	PASSED THE ASSEMBLY   AUGUST 28, 2000
	AMENDED IN ASSEMBLY   AUGUST 25, 2000
	AMENDED IN ASSEMBLY   JULY 6, 2000
	AMENDED IN ASSEMBLY   JUNE 12, 2000
	AMENDED IN SENATE   MAY 8, 2000
	AMENDED IN SENATE   APRIL 13, 2000

INTRODUCED BY   Senator Speier

                        FEBRUARY 25, 2000

   An act to amend Sections 12921 and 12975.7 of the Insurance Code,
relating to insurance.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 2107, Speier.  Insurance:  settlement agreements:
administrative.
   Existing law permits the Insurance Commissioner to impose
penalties for various violations of provisions of the Insurance Code.
  Existing law permits the Insurance Commissioner to settle
administrative actions brought to enforce the provisions of the
Insurance Code or other laws that impose the duty upon the
commissioner to regulate the business of insurance in this state.
   This bill would specify the extent of the authority of the
commissioner in the settlement with an insurer of an administrative
action.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 12921 of the Insurance Code is amended to read:

   12921.  (a) The commissioner shall perform all duties imposed upon
him or her by the provisions of this code and other laws regulating
the business of insurance in this state, and shall enforce the
execution of those provisions and laws.
   (b) In an administrative action to enforce the provisions of this
code and other laws regulating the business of insurance in this
state, any settlement is subject to all of the following:
   (1) The commissioner may delegate the power to negotiate the terms
and conditions of a settlement but the commissioner may not delegate
the power to approve the settlement.
   (2) Unless specifically provided for in a provision of this code,
the commissioner may not agree to any of the following:
   (A) That the respondent contribute, deposit, or transfer any
moneys or other resources to a nonprofit entity.
   (B) That a respondent contribute, deposit, or transfer any fine,
penalty, assessment, cost, or fee except to the commissioner for
deposit in the appropriate state fund pursuant to Section 12975.7.
   (C) That the commissioner may or shall direct the transfer,
distribution, or payment to another person or entity of any fine,
penalty, assessment, cost, or fee.
   (D) The use of the commissioner's name, likeness, or voice in any
printed material or audio or visual medium, either for general
distribution or for distribution to specific recipients.
   (3) The commissioner may only agree to payment to those persons or
entities to whom payment  may be due because of the respondent's
violation of a provision of this code or other law regulating the
business of insurance in this state.
   (4) A settlement may only include the sanctions provided by this
code or other laws regulating the business of insurance in this
state, except that the settlement may include attorney's fees, costs
of the department in bringing the enforcement action, and future
costs of the department to ensure compliance with the settlement
agreement.
  SEC. 2.  Section 12975.7 of the Insurance Code is amended to read:

   12975.7.  All moneys received by the commissioner in payment of
lawful fees or reimbursements pursuant to this code shall be
transmitted to the State Treasurer to be deposited in the State
Treasury to the credit of the Insurance Fund.  Unless specified in
this code to be deposited in a different fund, all moneys received by
the commissioner in fines, penalties, assessments, costs, or other
sanctions shall be transmitted to the State Treasury for deposit in
the General Fund.  The money in the Insurance Fund received from the
commissioner pursuant to this section is hereby appropriated as
follows:
   (a) To pay the refunds authorized by this code.
   (b) The balance of the money in the fund shall be used for the
support of the Department of Insurance as authorized by the Budget
Act and for related cash flow needs.