BILL ANALYSIS
AB 1597
Page 1
Date of Hearing: April 28, 2010
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 1597 (Jones) - As Amended: April 13, 2010
Policy Committee: Insurance
Vote:11-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill extends the sunset of the California Low Cost
Automobile Insurance Program from January 1, 2011 to January 1,
2016. This bill makes several changes to the administration of
the program, including the elimination of a notice requirement
for San Francisco and Los Angeles, the elimination of the most
recent annual report requirement, and modifies the notice and
effective dates of coverage provisions.
FISCAL EFFECT
Minor and absorbable costs to the California Department of
Insurance to modify reporting requirements and to continue
oversight of the Low Cost Automobile Insurance Program (LCAP)
COMMENTS
1)Rationale . This bill is sponsored by the California
Department of Insurance to extend the sunset of the LCAP and
to modify reporting and notice requirements. According to the
author this bill enables good drivers to purchase insurance
with lower coverage requirements and premiums than are
available on the open market. The LCAP has provided
approximately 50,000 policies since its inception, and had
11,439 policies in force during the last reporting period
(December 31, 2009).
2)Background . The LCAP is designed to reduce the number of
uninsured drivers on California's roads and make insurance
available to more consumers. The program was established in
1999 for drivers in Los Angeles and San Francisco and was made
AB 1597
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statewide in 2007. Annual auto insurance premiums are set by
county and currently range from $161 to $368 per year. The
premium rates are set by a public rate-setting process.
3)Related Legislation . SB 171 (Escutia), Chapter 794, Statutes
of 1999 and SB 527 (Speier), Chapter 807, Statutes of 1999
established the LCAP pilot program in 2000.
Analysis Prepared by : Mary Ader / APPR. / (916) 319-2081