BILL NUMBER: AB 1193	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JUNE 13, 2001
	AMENDED IN ASSEMBLY  MAY 8, 2001
	AMENDED IN ASSEMBLY  APRIL 30, 2001
	AMENDED IN ASSEMBLY  APRIL 16, 2001
	AMENDED IN ASSEMBLY  APRIL 2, 2001

INTRODUCED BY   Assembly Member Steinberg
   (Coauthors:  Assembly Members Calderon, Diaz, Dutra, Firebaugh,
Frommer, Kehoe,  Koretz,  Maddox, Pavley, Richman,
Strom-Martin, and Vargas)
   (Coauthors:  Senators Bowen, Kuehl, Machado,  and Romero
  Romero, and Sher  )

                        FEBRUARY 23, 2001

   An act to amend Section 790.03 of, and to add Section 676.10 to,
the Insurance Code, relating to insurance.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1193, as amended, Steinberg.  Insurers:  hate crimes:
cancellation or refusal to renew.
   (1) Existing law provides for  the  regulation of
insurers by the Insurance Commissioner.  Existing law imposes various
limitations on insurers relative to cancellation or nonrenewal of
policies protecting against certain residential, liability, and
commercial risks.
   This bill would provide that an insurer issuing policies
protecting against certain residential, liability, and commercial
risks may not cancel or refuse to renew a policy  issued to a
place of worship including, but not limited to, a church, synagogue,
or temple, or a nonprofit entity organized and operated for
religious, charitable, educational, or health purposes, 
solely on the basis that one or more claims has been made against the
policy during the preceding 60 months for a loss that is the result
of a hate crime committed against the person or property of an
insured  , if the insured is a religious or educational
organization or other nonprofit organization organized and operated
for religious, charitable, or educational purposes  .  This bill
would authorize a law enforcement agency, using specified
guidelines, to determine if the action in question was a hate crime.
This bill would require an insurer to report to the commissioner the
cancellation or nonrenewal of a policy subject to these provisions
after an insured has submitted a claim to the insurer that is the
result of a hate crime  , and would require the insurer to
provide additional related information to the commissioner 
.
   (2) Existing law provides that certain actions are defined as
unfair methods of competition and unfair and deceptive acts or
practices in the business of insurance, and specifies certain
penalties and powers of the commissioner in this regard.
   This bill would provide that a violation of the bill's
requirements would be subject to these provisions.
   Vote:  majority.  Appropriation:  no.  Fiscal committee:  yes.
State-mandated local program:  no.


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


  SECTION 1.  Section 676.10 is added to the Insurance Code, to read:

   676.10.  (a) This section applies to policies covered by Section
675, 675.5, or 676.5  if the insured is a religious organization
described in clause (i) of subparagraph (A) of paragraph (1) of
subsection (b) of Section 170 of Title 26 of the United States Code,
an educational organization described in clause (ii) of subparagraph
(A) of paragraph (1) of subsection (b) of Section 170 of Title 26 of
the United States Code, or other nonprofit organization described in
clause (vi) of subparagraph (A) of paragraph (1) of subsection (b) of
Section 170 of Title 26 of the United States Code that is organized
and operated for religious, charitable, or educational purposes 
.
   (b) No insurer issuing policies subject to this section shall
cancel or refuse to renew the policy  of a church, synagogue,
temple, or other place of worship, or a nonprofit entity organized
and operated for religious, charitable, educational, or health
purposes,  solely on the basis that one or more claims has
been made against the policy during the preceding 60 months for a
loss that is the result of a hate crime committed against the person
or property of the insured.
   (c) As it relates to this section, if determined by a law
enforcement agency, a "hate crime"  includes  
may include  any of the following:
   (1) By force or threat of force, willfully injure, intimidate,
interfere with, oppress, or threaten any other person in the free
exercise or enjoyment of any right or privilege secured to him or her
by the Constitution or laws of this state or by the Constitution or
laws of the United States because of the other person's race, color,
religion, ancestry, national origin, disability, gender, or sexual
orientation, or because he or she perceives that the other person has
one or more of those characteristics.  However, the foregoing
offense does not include speech alone, except upon a showing that the
speech itself threatened violence against a specific person or group
of persons and that the defendant had the apparent ability to carry
out the threat.
   (2) Knowingly deface, damage, or destroy the real or personal
property of any other person for the purpose of intimidating or
interfering with the free exercise or enjoyment of any right or
privilege secured to the other person by the Constitution or laws of
this state or by the Constitution or laws of the United States,
because of the other person's race, color, religion, ancestry,
national origin, disability, gender, or sexual orientation, or
because he or she perceives that the other person has one or more of
those characteristics.
   (d) Upon cancellation of or refusal to renew a policy subject to
this section after an insured has submitted a claim to the insurer
that is the result of a hate crime committed against the person or
property of the insured, the insurer shall report the cancellation or
nonrenewal to the commissioner  and shall provide the
commissioner with any related information required by the
commissioner pursuant to regulations adopted by the commissioner.
 . 
   (e) A violation of this section shall be an unfair practice
subject to Article 6.5 (commencing with Section 790) of Chapter 1 of
Division 2.
   (f) Nothing in this section shall prevent an insurer subject to
this section from taking any of the actions set forth in subdivision
(b) on the basis of criteria not otherwise made invalid by this
section or any other act, regulation, or law.
  SEC. 2.  Section 790.03 of the Insurance Code is amended to read:
   790.03.  The following are hereby defined as unfair methods of
competition and unfair and deceptive acts or practices in the
business of insurance.
   (a) Making, issuing, circulating, or causing to be made, issued or
circulated, any estimate, illustration, circular or statement
misrepresenting the terms of any policy issued or to be issued or the
benefits or advantages promised thereby or the dividends or share of
the surplus to be received thereon, or making any false or
misleading statement as to the dividends or share of surplus
previously paid on similar policies, or making any misleading
representation or any misrepresentation as to the financial condition
of any insurer, or as to the legal reserve system upon which any
life insurer operates, or using any name or title of any policy or
class of policies misrepresenting the true nature thereof, or making
any misrepresentation to any policyholder insured in any company for
the purpose of inducing or tending to induce  such 
 the  policyholder to lapse, forfeit, or surrender his or
her  insurance.
   (b) Making or disseminating or causing to be made or disseminated
before the public in this state, in any newspaper or other
publication, or any advertising device, or by public outcry or
proclamation, or in any other manner or means whatsoever, any
statement containing any assertion, representation or statement with
respect to the business of insurance or with respect to any person in
the conduct of his or her insurance business, which is untrue,
deceptive, or misleading, and which is known, or which by the
exercise of reasonable care should be known, to be untrue, deceptive,
or misleading.
   (c) Entering into any agreement to commit, or by any concerted
action committing, any act of boycott, coercion or intimidation
resulting in or tending to result in unreasonable restraint of, or
monopoly in, the business of insurance.
   (d) Filing with any supervisory or other public official, or
making, publishing, disseminating, circulating, or delivering to any
person, or placing before the public, or causing directly or
indirectly, to be made, published, disseminated, circulated,
delivered to any person, or placed before the public any false
statement of financial condition of an insurer with intent to
deceive.
   (e) Making any false entry in any book, report, or statement of
any insurer with intent to deceive any agent or examiner lawfully
appointed to examine into its condition or into any of its affairs,
or any public official to whom the insurer is required by law to
report, or who has authority by law to examine into its condition or
into any of its affairs, or, with like intent, willfully omitting to
make a true entry of any material fact pertaining to the business of
the insurer in any book, report, or statement of the insurer.
   (f) Making or permitting any unfair discrimination between
individuals of the same class and equal expectation of life in the
rates charged for any contract of life insurance or of life annuity
or in the dividends or other benefits payable thereon, or in any
other of the terms and conditions of the contract.
   This subdivision shall be interpreted, for any contract of
ordinary life insurance or individual life annuity applied for and
issued on or after January 1, 1981, to require differentials based
upon the sex of the individual insured or annuitant in the rates or
dividends or benefits, or any combination thereof.  This requirement
is satisfied if those differentials are substantially supported by
valid pertinent data segregated by sex, including, but not
necessarily limited to, mortality data segregated by sex.
   However, for any contract of ordinary life insurance or individual
life annuity applied for and issued on or after January 1, 1981, but
before the compliance date, in lieu of those differentials based on
data segregated by sex, rates, or dividends or benefits, or any
combination thereof, for ordinary life insurance or individual life
annuity on a female life may be calculated as follows:  (a) according
to an age not less than three years nor more than six years younger
than the actual age of the female insured or female annuitant, in the
case of a contract of ordinary life insurance with a face value
greater than five thousand dollars ($5,000) or a contract of
individual life annuity; and (b) according to an age not more than
six years younger than the actual age of the female insured, in the
case of a contract of ordinary life insurance with a face value of
five thousand dollars ($5,000) or less.  "Compliance date" as used in
this paragraph shall mean the date or dates established as the
operative date or dates by future amendments to this code directing
and authorizing life insurers to use a mortality table containing
mortality data segregated by sex for the calculation of adjusted
premiums and present values for nonforfeiture benefits and valuation
reserves as specified in Sections 10163.5 and 10489.2 or successor
sections.
   Notwithstanding the provisions of this subdivision, sex-based
differentials in rates or dividends or benefits, or any combination
thereof, shall not be required for (1) any contract of life insurance
or life annuity issued pursuant to arrangements which may be
considered terms, conditions, or privileges of employment as these
terms are used in Title VII of the Civil Rights Act of 1964 (Public
Law 88-352), as amended, and (2) tax sheltered annuities for
employees of public schools or of tax exempt organizations described
in Section 501(c)(3) of the Internal Revenue Code.
   (g) Making or disseminating, or causing to be made or
disseminated, before the public in this state, in any newspaper or
other publication, or any other advertising device, or by public
outcry or proclamation, or in any other manner or means whatever,
whether directly or by implication, any statement that a named
insurer, or named insurers, are members of the California Insurance
Guarantee Association, or insured against insolvency as defined in
Section 119.5.  This subdivision shall not be interpreted to prohibit
any activity of the California Insurance Guarantee Association or
the commissioner authorized, directly or by implication, by Article
14.2 (commencing with Section 1063).
   (h) Knowingly committing or performing with such frequency as to
indicate a general business practice any of the following unfair
claims settlement practices:
   (1) Misrepresenting to claimants pertinent facts or insurance
policy provisions relating to any coverages at issue.
   (2) Failing to acknowledge and act reasonably promptly upon
communications with respect to claims arising under insurance
policies.
   (3) Failing to adopt and implement reasonable standards for the
prompt investigation and processing of claims arising under insurance
policies.
   (4) Failing to affirm or deny coverage of claims within a
reasonable time after proof of loss requirements have been completed
and submitted by the insured.
   (5) Not attempting in good faith to effectuate prompt, fair, and
equitable settlements of claims in which liability has become
reasonably clear.
   (6) Compelling insureds to institute litigation to recover amounts
due under an insurance policy by offering substantially less than
the amounts ultimately recovered in actions brought by the insureds,
when the insureds have made claims for amounts reasonably similar to
the amounts ultimately recovered.
   (7) Attempting to settle a claim by an insured for less than the
amount to which a reasonable  man   person 
would have believed he  or she  was entitled by reference
to written or printed advertising material accompanying or made part
of an application.
   (8) Attempting to settle claims on the basis of an application
which was altered without notice to, or knowledge or consent of, the
insured, his or her representative, agent, or broker.
   (9) Failing, after payment of a claim, to inform insureds or
beneficiaries, upon request by them, of the coverage under which
payment has been made.
   (10) Making known to insureds or claimants a practice of the
insurer of appealing from arbitration awards in favor of insureds or
claimants for the purpose of compelling them to accept settlements or
compromises less than the amount awarded in arbitration.
   (11) Delaying the investigation or payment of claims by requiring
an insured, claimant, or the physician of either, to submit a
preliminary claim report, and then requiring the subsequent
submission of formal proof of loss forms, both of which submissions
contain substantially the same information.
   (12) Failing to settle claims promptly, where liability has become
apparent, under one portion of the insurance policy coverage in
order to influence settlements under other portions of the insurance
policy coverage.
   (13) Failing to provide promptly a reasonable explanation of the
basis relied on in the insurance policy, in relation to the facts or
applicable law, for the denial of a claim or for the offer of a
compromise settlement.
   (14) Directly advising a claimant not to obtain the services of an
attorney.
   (15) Misleading a claimant as to the applicable statute of
limitations.
   (16) Delaying the payment or provision of hospital, medical, or
surgical benefits for services provided with respect to acquired
immune deficiency syndrome or AIDS-related complex for more than 60
days after the insurer has received a claim for those benefits, where
the delay in claim payment is for the purpose of investigating
whether the condition preexisted the coverage.  However, this 60-day
period shall not include any time during which the insurer is
awaiting a response for relevant medical information from a health
care provider.
   (i) Canceling or refusing to renew a policy in violation of
Section 676.10.