BILL NUMBER: AB 601 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JUNE 1, 2009
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 amended, 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 make technical, nonsubstantive changes
to these provisions and would extend the operation of
these the 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:
(1) An amount equivalent to twenty cents ($0.20) of the special
purpose assessment imposed per insured vehicle by this 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 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 paragraph for the purposes authorized,
and shall submit the plan to the Assembly and Senate Committees on
Insurance.
(2) An amount equivalent to ten cents ($0.10) of the special
purpose assessment imposed per insured vehicle by this subdivision
shall be used for the purpose of improving consumer functions of the
department related to automobile insurance. Revenues available under
this paragraph shall be used to improve consumer functions through
one or more of the following:
(A) The rating and underwriting services bureau.
(B) The claims services bureau.
(C) The investigations bureau.
(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 paragraph for the purpose authorized,
and shall submit the plan to the Assembly and Senate Committees on
Insurance.
(3) Notwithstanding 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 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.
(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.
(c)
(b) This section shall remain in effect only until
January 1, 2015, and as of that date is repealed, unless a later
enacted statute, that is enacted before January 1, 2015, deletes or
extends that date.