BILL ANALYSIS
AB 591
Page 1
ASSEMBLY THIRD READING
AB 591 (De La Torre)
As Amended June 1, 2009
Majority vote
INSURANCE 10-0 HEALTH 19-0
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|Ayes:|Coto, Garrick, Blakeslee, |Ayes:|Jones, Fletcher, Adams, |
| | | |Ammiano, Block, Carter, |
| |Charles Calderon, Carter, | |Conway, De La Torre, |
| |Feuer, Hayashi, Nava, | |De Leon, Emmerson, Gaines, |
| |Niello, Torres | |Hall, Hayashi, Hernandez, |
| | | |Bonnie Lowenthal, Nava, V. |
| | | |Manuel Perez, Salas, |
| | | |Audra Strickland |
|-----+--------------------------+-----+----------------------------|
| | | | |
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APPROPRIATIONS 12-5
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|Ayes:|De Leon, Ammiano, Charles | | |
| |Calderon, Davis, Fuentes, | | |
| |Hall, John A. Perez, Price, | | |
| |Skinner, Solorio, Torlakson, | | |
| |Krekorian | | |
| | | | |
|-----+-------------------------------+----+---------------------|
|Nays:|Nielsen, Duvall, Harkey, | | |
| |Miller, | | |
| |Audra Strickland | | |
| | | | |
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SUMMARY : Increases the maximum fine from $1,000 to $5,000 for
soliciting, receiving, or paying a referral fee for referring
individuals to receive goods or services when the person knows
that reimbursement will be made by an automobile insurer, and
requires health care service plans and health insurers to
annually file with the state regulator a list of plan products
or policies. Specifically, this bill :
1)Increases from $1,000 to $5,000 the maximum fine for violating
the law against soliciting, receiving, offering, or paying a
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referral fee for referral of an individual for the furnishing
of services or goods which the person knows or should know
that reimbursement is or may be made by an automobile insurer.
2)Requires each health care service plan to annually file with
the Department of Managed Health Care (DMHC) a list of its
health care service plan products with more than 50,000
subscribers and enrollees issued during the previous calendar
year. This list shall identify each type of product by form
number approved by DMHC and by marketing name.
3)Requires each health insurer to annually file with the
California Department of Insurance (CDI) a list of its health
insurance policies with more than 50,000 insureds issued
during the previous calendar year. This list shall identify
each type of policy by the form number approved by the CDI and
by marketing name.
EXISTING LAW :
1)Makes it unlawful for any person to solicit, receive, offer,
or pay any referral fee for the referral of an individual for
the furnishing of services or goods for which the person knows
or should know that reimbursement is or may be made by an
automobile insurer. A violation of this law is a misdemeanor
punishable by a fine of up to $1,000 for each violation.
2)Regulates health care service plans under the Knox-Keene
Health Care Service Plan Act of 1975 (Knox-Keene Act) through
the CDI.
3)Requires health plans and insurers to file with their
respective regulator a list of Medicare supplement contracts
that identify the filing issuer by name and address, and type
of contract it offers by name and form number if one is used.
FISCAL EFFECT : One-time fee supported special fund costs of
$100,000 to DMHC and CDI, combined, to receive plan and insurer
contracts that have been issued or currently outstanding.
COMMENTS :
1)The author states that this bill will ensure that consumers'
interests are placed first and protected from being misled to
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a specific insurer because the person making the referral
receives compensation. Also, by increasing the penalty to not
exceed $5,000 it will deter individuals from referring for
kickbacks and, instead, place the consumers' interest first.
2)The author states that only a few arrests and convictions have
taken place under the existing maximum fine level, and that
there is a declining number of arrests and convictions in
recent years. The bill increases the maximum fine from $1,000
to $5,000 per violation for making unlawful referrals in
connection with automobile insurance. The $1,000 maximum fine
was established in 1990 (AB 2909, Chapter 255, Statutes of
1990).
3)The bill also would require health care service plans and
health insurers to annually file with the DMHC or the CDI a
list of their plan products or health insurance policies
issued or outstanding in this state in the previous calendar
year, including the form number and marketing name for those
products or policies. The author states that if you currently
call CDI and DMHC, you would have to know the form number of
the health plan product or health insurance policy to receive
additional information. The author argues requiring that the
product's marketing name be tracked along with the form number
will allow for consumers to more readily access information
about health plans and health insurers. Health plans and
insurers are already required to file with their state
regulator a list of Medicare supplement contracts that
identify the filing issuer by name and address, and type of
contract it offers by name and form number if one is used.
Analysis Prepared by : Manny Hernandez / INS. / (916) 319-2086
FN: 0001241