BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 591
                                                                  Page  1

          Date of Hearing:   May 13, 2009 

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Kevin De Leon, Chair

                 AB 591 (De La Torre) - As Amended:  April 15, 2009 

          Policy Committee:                              Insurance  
          Vote:10-0
                        Health                                19-0

          Urgency:     No                   State Mandated Local Program:  
          Yes    Reimbursable:              No

           SUMMARY  

          This bill requires health plans and health insurers to file with  
          the California Department of Managed Care (DMHC) or the  
          California Department of Insurance (CDI), a list of plan  
          contracts and policies offered, issued, or outstanding each  
          year.  In addition, this bill increases the maximum fine from  
          $1,000 to $5,000 to unlawfully solicit, receive, offer or pay  
          any referral fee associated with car insurance.   

           FISCAL EFFECT  

          1)Annual fee-supported special fund costs of $500,000 to DMHC  
            and CDI, combined, to receive plan and insurer contracts that  
            have been offered, issued, or are outstanding. DMHC indicates  
            the department will need to track and file thousands of health  
            plan contracts. According to the author, this bill only  
            expands DMHC current law reporting requirements and does not  
            expand these requirements significantly. 

          2)Minor absorbable workload to CDI to continue oversight of car  
            insurance policies and professionals. 

           COMMENTS  

           Rationale  . This bill contains two provisions to increase  
          consumer protections in the insurance market. The first  
          requirement applies to health plan and insurer specificity in  
          filings with DMHC and CDI. According to the author, the  
          increased specificity will make it easier for consumers to  
          resolve complaints with each regulator. According to the author,  








                                                                  AB 591
                                                                  Page  2

          policy holders currently call-in to the regulators and only know  
          general information about their policy, not more specific  
          tracking information. This bill increases the availability of  
          the more specific information. 

          This bill also increases the penalty for the payment or receipt  
          of a kickback for a car insurance referral.  According to the  
          author, individuals sometimes receive a referral they think is  
          in their best interest, but instead, a kickback is involved.   
          The increase in kickback penalty is intended to reduce the use  
          of kickbacks. 



           Analysis Prepared by  :    Mary Ader / APPR. / (916) 319-2081