BILL NUMBER: AB 2745	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Ammiano

                        FEBRUARY 19, 2010

   An act to amend Section 11628 of the Insurance Code, relating to
motor vehicle insurance.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2745, as introduced, Ammiano. Motor vehicle insurance:
discrimination: geographic area.
   Existing law prohibits an admitted insurer that is licensed to
issue and is issuing motor vehicle liability policies from failing or
refusing to accept an application for that insurance, failing or
refusing to issue that insurance to the applicant, or from issuing or
cancelling that insurance under conditions less favorable to the
insured than in other comparable cases because of specified reasons,
including discrimination between persons within the same geographic
area. Existing law also prohibits the admitted motor vehicle
liability insurer from using any characteristic of sex, race, color,
religion, ancestry, national origin, disability, medical condition,
marital status, sexual orientation, including, but not limited to,
language or location within a geographic area, of itself, as a
condition or risk for which a higher rate, premium, or charge is
required of the insured for that insurance. Existing law defines
geographic area as a portion of this state of not less than 20 square
miles defined by description in the rating manual of an insurer or
in the rating manual of a rating bureau of which the insurer is a
member or subscriber.
   This bill would redefine geographic area as a portion of this
state of not less than 15 square miles defined by description in the
rating manual of an insurer or in the rating manual of a rating
bureau of which the insurer is a member or subscriber.
   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.  It is the intent of the Legislature to limit a state
regulated motor vehicle insurer from arbitrarily raising or lowering
insurance rates based on crime statistics in the given geographic
area of the insured.
  SEC. 2.  Section 11628 of the Insurance Code is amended to read:
   11628.  (a) (1) No admitted insurer that is licensed to issue and
issuing motor vehicle liability policies, as defined in Section 16450
of the Vehicle Code, shall fail or refuse to accept an application
for that insurance, to issue that insurance to an applicant therefor,
or issue or cancel that insurance under conditions less favorable to
the insured than in other comparable cases, except for reasons
applicable alike to persons of every characteristic listed or defined
in subdivision (b) or (e) of Section 51 of the Civil Code,
including, but not limited to, language, or persons of the same
geographic area; nor shall any characteristic listed or defined in
subdivision (b) or (e) of Section 51 of the Civil Code, including,
but not limited to, language, or location within a geographic area,
of itself, constitute a condition or risk for which a higher rate,
premium, or charge may be required of the insured for that insurance.

   (2) As used in this section "geographic area" means a portion of
this state of not less than  20   15 
square miles defined by description in the rating manual of an
insurer or in the rating manual of a rating bureau of which the
insurer is a member or subscriber. In order that geographic areas
used for rating purposes may reflect homogeneity of loss experience,
a record of loss experience for the geographic area shall include the
breakdown of actual loss experience statistics by ZIP Code area (as
designated by the United States Postal Service) within each
geographic area for family owned private passenger motor vehicles and
lightweight commercial motor vehicles, under 11/2-ton load capacity,
used for local service or retail delivery, normally within a 50-mile
radius of garaging, and that are not part of a fleet of five or more
motor vehicles under one ownership. A record of loss experience for
the geographic area, including that statistical data by ZIP Code
area, shall be submitted annually to the commissioner for examination
by each insurer licensed to issue and issuing motor vehicle
liability policies, motor vehicle physical damage policies, or both.
Loss experience shall include separate loss data for each type of
coverage, including liability or physical damage coverage,
underwritten. That report shall include the insurer's statewide loss
ratio, loss adjustment expense ratio, expense ratio, and combined
ratio on its assigned-risk business. An insurer may satisfy its
obligation to report statistical data under this subdivision by
providing its loss experience data and statewide expense ratio and
combined ratio on its assigned-risk business to a rating or advisory
organization for submission to the commissioner. This data shall be
made available to the public by the commissioner annually after
examination. However, the data shall be released in aggregate form by
ZIP Code in order that no individual insurer's loss experience for
any specific geographic area be revealed. Differentiation in rates
between geographical areas shall not constitute unfair
discrimination.
   (3) All information reported to the department pursuant to this
subdivision shall be confidential.
   (4) As used in this section:
   (A) "Language" means the inability to speak, read, write, or
comprehend the English language.
   (B) "Dependents" shall include, but not be limited to, issue
regardless of generation.
   (C) "Spouse" shall be determined without regard to current marital
status.
   (b) The commissioner may require insurers with combined ratios on
statewide assigned-risk business that are 10 percent above the mean
combined ratio for all plan participants to also report the
following:
   (1) The reason for the excessive ratio.
   (2) A plan for reducing the ratio, and when the reduction can be
expected to occur. The commissioner may require insurers subject to
this subdivision to provide periodic reports on the progress in
reducing the combined ratio.
   (c) (1) No admitted insurer, licensed to issue and issuing motor
vehicle liability insurance policies as defined in Section 16450 of
the Vehicle Code, shall fail or refuse to accept an application for
that insurance, refuse to issue that insurance to an applicant
therefor, or cancel that insurance solely for the reason that the
applicant for that insurance or any insured is employed in a specific
occupation, or is on active duty service in the Armed Forces of the
United States.
   (2) Nothing in this section shall prohibit an insurer from doing
any of the following:
   (A) Considering the occupation of the applicant or insured as a
condition or risk for which a higher rate or discounted rate may be
required or offered for coverage in the course and scope of his or
her occupation.
   (B) Charging a deviated rate to any classification of risks
involving a specific occupation, or grouping thereof, if the rate
meets the requirements of Chapter 9 (commencing with Section 1850) of
Part 2 of Division 1 and is based upon actuarial data  which
  that  demonstrates a significant actual
historical differential between past losses or expenses attributable
to the specific occupation, or grouping thereof, and the past losses
or expenses attributable to other classification of risks. For
purposes of compiling that actuarial data for a specific occupation
or grouping thereof, a person shall be deemed employed in the
occupation in which that data is compiled if any of the following is
true:
   (i) The majority of his or her employment during the previous year
was in the occupation.
   (ii) The majority of his or her aggregate earnings for the
immediate preceding three-year period were derived from the
occupation.
   (iii) The person is a member in good standing of a union that is
an authorized collective bargaining agent for persons engaged in the
occupation.
   (3) Nothing in this section shall be construed to include in the
definition of "occupation" any status or activity that does not
result in remuneration for work done or services performed, or
self-employment in a business operated out of an applicant's or
insured's place of residence or persons engaged in the renting,
leasing, selling, repossessing, rebuilding, wrecking, or salvaging of
motor vehicles.
   (d) Nothing in this section shall limit or restrict the ability of
an insurer to refuse to accept an application for or refuse to issue
or cancel insurance for the reason that it is a commercial vehicle
or based upon the consideration of a vehicle's size, weight, design,
or intended use.
   (e) It is the intent of the Legislature that actuarial data by
occupation may be examined for credibility by the commissioner on the
same basis as any other automobile insurance data  which
  that  he or she is empowered to examine.
   (f) (1) Except as provided in Article 4 (commencing with Section
11620), nothing in this section or in Article 10 (commencing with
Section 1861.01) of Chapter 9 of Part 2 of Division 1 or in any other
provision of this code, shall prohibit an insurer from limiting the
issuance or renewal of insurance, as defined in subdivision (a) of
Section 660, to persons who engage in, or have formerly engaged in,
governmental or military service or segments of categories thereof,
and their spouses, dependents, direct descendants, and former
dependents or spouses.
   (2) The term "military service" includes, but is not limited to,
officers, warrant officers, and enlisted persons, officer and warrant
officer candidates, cadets or midshipmen at a service academy,
cadets or midshipmen in advance Reserve Officer Training Corps
programs or on Reserve Officer Training Corps program scholarships,
National Guard officer candidates, students in government-sponsored
precommissioning programs, and foreign military officers while on
temporary duty in the United States.
   (g) Any person subject to regulation by the commissioner pursuant
to this code who fails to comply with a data call required by the
department pursuant to subdivision (a) shall be liable to the state
for a civil penalty in an amount not exceeding five thousand dollars
($5,000) for each 30-day period that the person is not in compliance,
unless the failure to comply is willful, in which case the civil
penalty shall be in an amount not to exceed ten thousand dollars
($10,000) for each 30-day period that the person is not in
compliance, but not to exceed an aggregate amount of one hundred
thousand dollars ($100,000). The commissioner shall collect the
amount so payable and may bring an action in the name of the people
of the State of California to enforce collection. These penalties
shall be in addition to other penalties provided by law.
   (h) This section shall be known and may be cited as the "Rosenthal
Auto Insurance Nondiscrimination Law."