BILL NUMBER: AB 601	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Garrick

                        FEBRUARY 25, 2009

   An act to amend Section 1872.81 of the Insurance Code, relating to
motor vehicle insurance.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 601, as introduced, Garrick. Motor vehicle insurance: special
assessments.
   Existing law, until January 1, 2010, imposes on an insurer a $0.30
special purpose assessment on each vehicle insured under an
insurance policy issued in this state by the insurer. Existing law
specifies that $0.20 of each $0.30 special purpose assessment shall
be used to fund specified consumer service functions of the
Department of Insurance relating to motor vehicle insurance. Existing
law further specifies that the remaining $0.10 of each $0.30
assessment shall be used to fund the improvement of certain consumer
functions of the department. Under existing law, the funding purpose
of the $0.10 portion of the $0.30 special purpose assessment is
further broken down to portions with specified purposes.
   This bill would extend the operation of these provisions until
January 1, 2015. This bill would delete the specified purpose for one
of the final portions of the $0.10 portion of the total assessment.
This bill would also reduce the $0.30 special purpose assessment to a
$0.20 special purpose assessment and would state that the purpose of
this reduction is for the department to spend down the reserve for
that special purpose assessment while ensuring that the ratios
between the allocations of funds remain unchanged, as specified.
   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 1872.81 of the Insurance Code is amended to
read:
   1872.81.   (a)    In addition to the special
purpose assessment imposed pursuant to Section 1872.8, an insurer
doing business in this state shall pay to the commissioner an annual
special purpose assessment of thirty cents ($0.30) for each vehicle
insured under an insurance policy it issues in this state, for
expenditure as follows: 
   (a) 
    (1)  An amount equivalent to twenty cents ($0.20) of the
special purpose assessment imposed per insured vehicle by this
 section   subdivision  shall be used for
the purpose of paying for consumer service functions of the
department that are related to automobile insurance. The revenues
under this  subdivision   paragraph  shall
be used to improve service to consumers through the rating and
underwriting services bureau, the claims services bureau, the
investigations bureau, or any successor bureaus of the department
that may assume the consumer service functions of these bureaus, and
legal services in support of these bureaus. The department shall
develop a plan for the use of the revenues available under this
 subdivision   paragraph  for the purposes
authorized, and shall submit the plan to the Assembly and Senate
Committees on Insurance. 
   (b) 
    (2)  An amount equivalent to ten cents ($0.10) of the
special purpose assessment imposed per insured vehicle by this
 section   subdivision  shall be used for
the purpose of improving consumer functions of the department related
to automobile insurance. Revenues available under this 
subdivision   paragraph  shall be used to improve
consumer functions through one or more of the following: 
   (1) 
    (A)  The rating and underwriting services bureau.

   (2) 
    (B)  The claims services bureau. 
   (3) 
    (C)  The investigations bureau. 
   (4) 
    (D)  Any successor bureau of the department that may
assume automobile insurance consumer functions of these bureaus, and
legal services in support of these bureaus. These revenues also may
be used for improving the ability of the department to respond to
consumer complaints and information requests through the department's
toll-free telephone number, and for improving the ability of the
department to offer information about automobile insurance rates to
the public. The department shall develop a plan for the use of the
revenues available under this  subdivision  
paragraph  for the purpose authorized, and shall submit the plan
to the Assembly and Senate Committees on Insurance. 
   (c) 
    (3)  Notwithstanding  subdivision (b) 
 paragraph (2)  , the Department of Insurance, after January
1, 2006, and the Department of Motor Vehicles, after that date, may
propose to the budget committees of the Legislature a proposed use of
up to five cents ($0.05) of the ten-cent ($0.10) special purpose
assessment levied pursuant to  subdivision (b)  
paragraph (2)  related to informing consumers about the
existence of any low-cost automobile insurance program authorized in
law pursuant to Section 11629.7 or other statutes that also establish
a program of the type identified in Section 11629.7. Funds for this
purpose shall not be expended without prior budget approval. The
total amount of funds authorized to both departments in total, or to
one department in total, for this purpose shall not exceed five cents
($0.05). The departments shall explain, with as much specificity as
is reasonably possible, the objectives for the use of the funds and
quantitative criteria by which the Legislature may evaluate the
effectiveness of the department's use of funds. 
   (d) At least five cents ($0.05) of the ten-cent ($0.10) special
purpose assessment shall be directed to the purpose set forth in
subdivision (a) until January 1, 2009, and to the degree that funding
for low-cost auto insurance is not fully appropriated up to five
cents ($0.05), the difference thereof shall be additionally allocated
to purposes set forth in subdivision (a).  
   (b) From July 1, 2010, to December 31, 2014, inclusive, the
special purpose assessment provided for in subdivision (a) shall be
reduced from thirty cents ($0.30) to twenty cents ($0.20) for each
vehicle insured under an insurance policy issued by an insurer in
this state. The ratios between the allocations of funds made by
paragraphs (1), (2), and (3) of subdivision (a) shall remain in
effect. It is the intent of the Legislature that the Department of
Insurance will spend down the reserve for this special purpose
assessment during this period while ensuring that the ratios between
the allocations of funds made by paragraphs (1), (2), and (3) of
subdivision (a) remain unchanged.  
   (e) 
    (c)  This section shall remain in effect only until
January 1,  2010,   2015,  and as of that
date is repealed, unless a later enacted statute, that is enacted
before January 1,  2010,   2015,  deletes
or extends that date.