BILL ANALYSIS
AB 1449
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Date of Hearing: April 21, 2009
ASSEMBLY COMMITTEE ON HEALTH
Dave Jones, Chair
AB 1449 (De Leon) - As Introduced: February 27, 2009
SUBJECT : Health care coverage: solicitation.
SUMMARY : Revises and makes specific to individual health care
coverage the duty established for agents, brokers, solicitors,
or sales representatives, who assist an applicant in completing
applications for health care coverage, to assist applicants in
providing answers to health questions accurately and completely,
as specified.
EXISTING LAW :
1)Requires anyone who solicits, negotiates, or effects contracts
of insurance to be licensed for that purpose by the
Commissioner of Insurance, and to meet specified testing and
training requirements.
2)Establishes a duty on the part of agents, brokers, or
solicitors who assist applicants in submitting applications to
provide answers to health questions accurately and completely.
3)Requires an agent, broker or solicitor to attest to both of
the following on a written application:
a) That to the best of his or her knowledge, the
information on the application is complete and accurate;
and,
b) That he or she explained to the applicant, in
easy-to-understand language, the risk to the applicant of
providing inaccurate information and the applicant
understood the explanation.
4)Requires, if, in an attestation required by 2) above, a
declarant willfully states as true any material fact he or she
knows to be false, that person to, in addition to any
applicable penalties or remedies available under current law,
be subject to a civil penalty of up $10,000.
5)Authorizes any public prosecutor to bring a civil action to
AB 1449
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impose the civil penalty under 3) above and requires a health
plan or health insurance application to include a statement
advising declarants of the civil penalty authorized under this
bill.
FISCAL EFFECT : This bill has not yet been analyzed by a fiscal
committee.
COMMENTS :
1)PURPOSE OF THIS BILL . According to the author, this bill is
needed to clarify that the duty established for health
insurance agents to help in completing health insurance
applications accurately is applicable to the individual health
insurance market.
2)BACKGROUND . AB 2569 (De Leon), Chapter 604, Statutes of 2008,
which established the duty on health insurance agents revised
under this bill, related to health insurance rescission.
"Rescission" is the process whereby insurers cancel individual
health coverage on the basis of alleged missing or incomplete
information on the part of the insured person at the time of
application. AB 2569 focused on the role of agents in helping
individuals to complete the application for health insurance
to make sure that agents did not contribute in any way to the
potential for a rescission because of errors or omissions in
the application. This bill would clarify that the duty to be
complete and accurate established by AB 2569 applies to
individual health insurance applications.
3)PREVIOUS LEGISLATION. AB 2569 (De Leon) requires health plans
and health insurers to offer new coverage, or continue
existing coverage, for any individual whose coverage was
rescinded, other than the individual whose information led to
the rescission, within 60 days, without medical underwriting,
as defined. Establishes a duty for agents to assist
applicants in providing accurate and complete answers to
health questions.
4)SUPPORT IF AMENDED . The California Medical Association writes
that it would support this bill if amended to: a) provide
whistleblower protection if a declarant reports a violation by
an agent or sales representative, and b) that the disclosure
required in existing law be prominently displayed on the
application.
AB 1449
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REGISTERED SUPPORT / OPPOSITION :
Support
None on file.
Opposition
None on file.
Analysis Prepared by : Deborah Kelch / HEALTH / (916) 319-2097