BILL ANALYSIS
SENATE JUDICIARY COMMITTEE
Senator Ellen M. Corbett, Chair
2009-2010 Regular Session
AB 470
Assemblymember Niello
As Introduced
Hearing Date: June 23, 2009
Insurance Code
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SUBJECT
Insurance Information: Confidential
DESCRIPTION
This bill would permit an insurer to disclose information from
an accident report, supplemental report, investigative report,
or the actual government report to an insured's lawyer, as
specified.
BACKGROUND
The Insurance Information and Privacy Protection Act (Act)
protects the privacy of insurance consumers in California. In
2006, the Legislature passed and the Governor signed SB 1847
(Committee on Banking, Finance and Insurance, Ch. 405, Stats.
2006) which amended the Act to permit an insurer to disclose
personal information about an individual collected or received
in connection with an insurance transaction when the disclosure
is to an insured and the information is from an accident report,
supplemental report, investigative report, or actual report from
a government agency.
This bill would permit the disclosure of those reports to an
insured's lawyer.
This bill was approved by the Senate Banking, Finance and
Insurance Committee on June 17, 2009.
CHANGES TO EXISTING LAW
Existing law governs the collection, use, and disclosure of
information gathered in connection with insurance transactions.
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The Act generally limits disclosure of personal information by
insurers and agents without the written consent of the
individual. (Ins. Code Sec. 791 et seq.)
Existing law prohibits an insurance institution, agent, or
insurance-support organization from disclosing any personal or
privileged information about an individual collected or received
in connection with an insurance transaction unless the
disclosure is to an insured when the information disclosed is
from an accident report, supplemental report, investigative
report, or the actual report from a government agency or is a
copy of an accident report or other report which the insured is
entitled to obtain, as specified. (Ins. Code Sec. 791.13(s).)
Existing law provides that a client of a lawyer has a privilege
to refuse to disclose, and to prevent another from disclosing, a
confidential communication between the client and lawyer, as
specified. (Evid. Code Sec. 954.)
This bill would extend the existing exemption under Section
791.13 to also permit the disclosure of the specified reports to
an insured's lawyer.
COMMENT
1. Stated need for the bill
The author and sponsor, Civil Justice Association of California
(CJAC), assert that this bill will help to expedite the
settlement of insurance claims by permitting an insurer to
communicate more quickly with the insured's attorney.
CJAC writes in support:
The reasons behind the prohibition in Insurance Code Section
791.12 are to protect the privacy interests of the individual.
However, since this bill would only allow disclosure to an
insured's own lawyer, there is no compelling need for privacy
protection. The lawyer could get the same information through
other means, and the insured has the protections of an
attorney-client relationship.
This inability to directly disclose to the insured's lawyer
information the lawyer or the insured could get anyway by
another source causes delays in the timely processing and
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settlement of claims. This simple bill would allow a
work-around to expedite processing and settlement of claims.
2. Bill would permit exception to privacy protections where
attorney-client relationship exists and where information
disclosed is limited
As discussed previously, the Insurance Information and Privacy
Protection Act protects the personal information of insurance
consumers with limited exceptions. By permitting an insurer to
disclose accident or police reports to an insured's lawyer, this
bill raises the public policy question of whether this exception
to existing law's privacy protections is appropriate in this
instance.
It is important to note, as the sponsor and proponents do, that
the disclosure in this instance is to the insured's lawyer who
has an attorney-client relationship with the insured. This
relationship has the protections of the attorney-client
privilege which protects the confidentiality of communications
between the insured in this case and his or her attorney.
Additionally, the information disclosed under Section 791.13 is
limited to accident reports, supplemental reports, investigative
reports, or the actual report from a government agency or a copy
of an accident report or other report which the insured is
entitled to obtain. For these reasons, it is arguably
appropriate to permit an exception to existing privacy
protections in these limited instances.
3. Supporter's arguments
The Consumer Attorneys of California support the measure,
writing that it "will insure that both plaintiff's counsel as
well as the insurer will be able to quickly gain access to vital
information needed for the settlement of a claim. The public
policy behind current law is to protect the privacy of the
insured. However, in the case of the insured's attorney,
privacy is already protected by the special attorney-client
relationship. The inability of an insurer to directly disclose
the accident report to an insured's attorney causes unnecessary
delays in the settlement process and this bill will remedy the
situation."
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Support : Consumer Attorneys of California; Association of
California Insurance Companies
Opposition : None Known
HISTORY
Source : Civil Justice Association of California
Related Pending Legislation : None Known
Prior Legislation : SB 1847 (Committee on Banking, Finance and
Insurance, Ch. 405, Stats. 2006) See Background.
Prior Vote :
Senate Banking, Finance and Insurance Committee (Ayes 11, Noes
0)
Assembly Floor (Ayes 73, Noes 0)
Assembly Insurance Committee (Ayes 9, Noes 0)
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