BILL ANALYSIS
AB 2490
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CONCURRENCE IN SENATE AMENDMENTS
AB 2490 (Jones)
As Amended August 20, 2010
Majority vote
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|ASSEMBLY: |41-28|(May 24, 2010) |SENATE: |23-13|(August 30, |
| | | | | |2010) |
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Original Committee Reference: INS.
SUMMARY : Requires dispute resolution clauses entered into
between an employer and a workers' compensation insurer to
specify that California law applies and the venue where disputes
are to be resolved is in California.
The Senate amendments :
1)Delete several findings and declarations and redraft other
findings to more accurately reflect the current language in
the bill.
2)Clarify that the bill only applies to contracts with employers
whose principal place of business is in California.
3)Require any choice of law or choice of venue clause to be
provided by the insurer to the employer contemporaneously with
any written offer or quote for workers' compensation
insurance.
4)Would allow, notwithstanding the bill's requirements, an
employer and insurer to negotiate, prior to the inception of
the policy, a choice of law or venue clause.
EXISTING LAW :
1)Provides for a comprehensive system of workers' compensation
benefits to be paid to employees who are injured on the job.
2)Requires every employer in the state to obtain a policy of
workers' compensation insurance from an insurer licensed to
transact this insurance in the state, or obtain a certificate
of self-insurance from the Department of Industrial Relations.
AB 2490
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3)Authorizes employers to purchase "high-deductible" workers'
compensation insurance policies, subject to certain
conditions, whereby the employer is effectively self-insured
below the deductible, but the insurer is ultimately
responsible to guarantee payment of benefits.
4)Requires workers' compensation insurers to file their policy
forms with the Insurance Commissioner (IC) for approval, but
does not specifically require side agreements such as dispute
resolution agreements to be part of that filing.
AS PASSED BY THE ASSEMBLY , this bill:
1)Provided that any agreement between an employer and a workers'
compensation insurer concerning resolution of a California
dispute, including an arbitration clause, shall:
a) Contain a choice of law provision that selects
California law as the law to be applied to any dispute;
b) Contain a forum selection clause that identifies
California as the proper venue for any proceedings arising
out of a dispute; and,
c) Be submitted to the IC as part of the policy form filing
that is required of workers' compensation insurers for
workers' compensation policies.
2)Specified that a failure to comply with the above requirements
renders the dispute resolution agreement void and
unenforceable.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, one-time fee-supported special fund costs of less
than $30,000 to the Department of Insurance (DOI), and on-going
absorbable workload for DOI to continue oversight of the
provisions established by this bill.
AB 2490
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Analysis Prepared by : Mark Rakich / INS. / (916) 319-2086
FN: 0006693