BILL NUMBER: AB 802 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 21, 2009
INTRODUCED BY Assembly Member Duvall
FEBRUARY 26, 2009
An act to amend Section 758.5 of the Insurance Code,
relating to motor vehicle insurance. An act to amend
Sections 1873 and 1874.1 of the Insurance Code, relating to insurance
information.
LEGISLATIVE COUNSEL'S DIGEST
AB 802, as amended, Duvall. Motor vehicle insurance:
direct repair programs. Insurance fraud: release of
information: other unlawful activity.
Existing law requires an insurer, or agent authorized by that
insurer to act on behalf of the insurer, upon written request, to
release to a requesting officer of an authorized governmental agency,
as defined, any or all relevant information deemed important to the
authorized governmental agency that the insurer may possess relating
to any specific insurance fraud.
This bill would also require the insurer, or agent authorized by
that insurer to act on behalf of the insurer, to release to the
authorized governmental agency any or all relevant information deemed
important to the authorized governmental agency that the insurer may
possess relating to any other unlawful activity recovered in the
course of an insurance fraud investigation. This bill would state
that the Bureau of Automotive Repair, the Medical Board of
California, and the State Bar of California are included as
authorized governmental agencies, as specified.
Existing law prohibits insurers from requiring that an automobile
be repaired at a specific automotive repair dealer. Under existing
law, an insurer may suggest or recommend a specific automotive repair
dealer under certain specified circumstances.
This bill would state that nothing in that provision prohibits an
insurer from providing a claimant with information regarding the
benefits available to the claimant under the terms of the automobile
insurance policy.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1873 of the
Insurance Code is amended to read:
1873. (a) Upon written request to an insurer by officers
designated in subdivisions (a) and (b) of Section 830.1 and
subdivision (a) of Section 830.2, and subdivisions (a), (c), and (i)
of Section 830.3 of the Penal Code, an insurer, or agent authorized
by that insurer to act on behalf of the insurer, shall release to the
requesting authorized governmental agency any or all relevant
information deemed important to the authorized governmental agency
that the insurer may possess relating to any specific insurance fraud
or any other unlawful activity recovered in the course of an
insurance fraud investigation . Relevant information may
include, but is not limited to, all of the following:
(1) Insurance policy information relevant to the insurance fraud
under investigation, including, but not limited to, any application
for a policy.
(2) Policy premium payment records which
that are available.
(3) History of previous claims made by the insured.
(4) Information relating to the investigation of the insurance
fraud, including statements of any person, proof of loss, and notice
of loss.
(5) Complete copies of both sides of payment drafts.
(b) The provisions of subdivision (a) shall not operate to
authorize disclosure of medical information not otherwise authorized
for disclosure pursuant to law.
SEC. 2. Section 1874.1 of the Insurance
Code is amended to read:
1874.1. The following definitions govern the construction of this
article, unless the context requires otherwise:
(a) "Authorized governmental agency" means the Department of the
California Highway Patrol, the Department of Insurance, the
Department of Justice, the Department of Motor Vehicles, the police
department of a city, or a city and county, the sheriff's office or
department of a county, a law enforcement agency of the federal
government, the district attorney of any county, or city and county,
and any licensing agency governed by the Business and Professions
Code , including the Bureau of Automotive Repair, the Medical
Board of California, and the State Bar of California, or the
Chiropractic Initiative Act.
(b) "Relevant" means having a tendency to make the existence of
any fact that is of consequence to the investigation or determination
of an issue more probable or less probable than it would be without
the information.
(c) Information shall be deemed important if, within the sole
discretion of the authorized governmental agency, that information is
requested by that authorized governmental agency.
(d) "Insurer" means the automobile assigned risk plan established
pursuant to Section 11620 of the Insurance Code, as well as any
insurer writing insurance for motor vehicles or otherwise liable for
any loss due to motor vehicle theft or motor vehicle insurance fraud.
(e) "Motor vehicle" means motor vehicle as defined in Section 415
of the Vehicle Code.
SECTION 1. Section 758.5 of the Insurance Code
is amended to read:
758.5. (a) No insurer shall require that an automobile be
repaired at a specific automotive repair dealer, as defined in
Section 9880.1 of the Business and Professions Code. Nothing in this
section prohibits an insurer from providing a claimant with
information regarding the benefits available to the claimant under
the terms of the automobile insurance policy.
(b) (1) No insurer shall suggest or recommend that an automobile
be repaired at a specific automotive repair dealer unless either of
the following applies:
(A) A referral is expressly requested by the claimant.
(B) The claimant has been informed in writing of the right to
select the automotive repair dealer.
(2) If the recommendation is accepted by the claimant, the insurer
shall cause the damaged vehicle to be restored to its condition
prior to the loss at no additional cost to the claimant other than as
stated in the policy or as is otherwise allowed by law. If the
recommendation of an automotive repair dealer is done orally, and if
the oral recommendation is accepted by the claimant, the insurer
shall provide the information contained in this paragraph, as noted
in the statement below, to the claimant at the time the
recommendation is made. The insurer shall send the written notice
required by this paragraph within five calendar days from the oral
recommendation. The written notice required by this paragraph shall
include the following statement plainly printed in no less than
10-point type:
"WE ARE PROHIBITED BY LAW FROM REQUIRING THAT REPAIRS BE DONE AT A
SPECIFIC AUTOMOTIVE REPAIR DEALER. YOU ARE ENTITLED TO SELECT THE
AUTO BODY REPAIR SHOP TO REPAIR DAMAGE COVERED BY US. WE HAVE
RECOMMENDED AN AUTOMOTIVE REPAIR DEALER THAT WILL REPAIR YOUR DAMAGED
VEHICLE. IF YOU AGREE TO USE OUR RECOMMENDED AUTOMOTIVE REPAIR
DEALER, WE WILL CAUSE THE DAMAGED VEHICLE TO BE RESTORED TO ITS
CONDITION PRIOR TO THE LOSS AT NO ADDITIONAL COST TO YOU OTHER THAN
AS STATED IN THE INSURANCE POLICY OR AS OTHERWISE ALLOWED BY LAW. IF
YOU EXPERIENCE A PROBLEM WITH THE REPAIR OF YOUR VEHICLE, PLEASE
CONTACT US IMMEDIATELY FOR ASSISTANCE."
(c) Except as provided in subparagraph (A) of paragraph (1) of
subdivision (b), after the claimant has chosen an automotive repair
dealer, the insurer shall not suggest or recommend that the claimant
select a different automotive repair dealer.
(d) Any insurer that, by the insurance contract, suggests or
recommends that an automobile be repaired at a particular automotive
repair dealer shall also do both of the following:
(1) Prominently disclose the contractual provision in writing to
the insured at the time the insurance is applied for and at the time
the claim is acknowledged by the insurer.
(2) If the claimant elects to have the vehicle repaired at the
shop of his or her choice, the insurer shall not limit or discount
the reasonable repair costs based on charges that would have been
incurred had the vehicle been repaired by the insurer's chosen shop.
(e) For purposes of this section, "claimant" means a first-party
claimant or insured, or a third-party claimant who asserts a right of
recovery for automotive repairs under an insurance policy.
(f) The powers of the commissioner to enforce this section shall
include those granted in Article 6.5 (commencing with Section 790) of
Chapter 1 of Part 2 of Division 1.