BILL ANALYSIS
AB 2779
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Date of Hearing: April 21, 2010
ASSEMBLY COMMITTEE ON INSURANCE
Jose Solorio, Chair
AB 2779 (Committee on Insurance) - As Amended: April 8, 2010
SUBJECT : California Automobile Assigned Risk Plan
SUMMARY : Deletes obsolete laws concerning emergency
regulations adopted by the Insurance Commissioner (IC) in
connection with the California Low-Cost Automobile Insurance
Program. Specifically, this bill :
1)Repeals the requirement of the IC to adopt emergency
regulations in connection with the commencement of operations
of the California Low-Cost Automobile Insurance Program in the
County of Los Angeles and the City and County of San
Francisco.
2)Repeals the requirement of the IC to adopt emergency
regulations in connection with implementing this program in
the other counties of the state.
EXISTING LAW :
1)Authorizes the California Low-Cost Automobile Insurance
Program to commence operations in the County of Los Angeles
and the City and County of San Francisco no later than July 1,
2000. To this end, the Insurance Commissioner, in
consultation with the California Automobile Assigned Risk
Plan, must adopt regulations to implement this program within
60 days of its effective date.
2)Requires the California Low-Cost Automobile Insurance Program
to commence operations in the Counties of Alameda, Fresno,
Orange, Riverside, San Bernardino, and San Diego on April 1,
2006, and commence in all other counties of the state at the
discretion of the Insurance Commissioner (IC). The IC, in
consultation with the California Automobile Assigned Risk
Plan, must adopt regulations to implement the expansion of the
program to these counties.
3)Requires the IC to adopt the above-noted regulations as
emergency regulations.
AB 2779
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FISCAL EFFECT : No cost.
COMMENTS :
1)Purpose . The purpose of this bill is to remove obsolete laws
that previously directed the manner in which the IC adopted
regulations to commence the operations of the California
Low-Cost Automobile Insurance Program.
2)Background . In 1999, legislation by Senators Martha Escutia
and Jackie Speier established a low-cost automobile insurance
program in the counties of Los Angeles and San Francisco (SB
171 (Escutia), Statutes of 1999, Chapter 794, and SB 527
(Speier), Statutes of 1999, Chapter 807). In 2006, this
program was extended to the counties of Alameda, Fresno,
Orange, Riverside, San Bernardino, and San Diego, with
authority given to the IC to extend the program statewide (SB
20 Escutia, Chapter 435, Statutes of 2005). By the end of
2007 the IC had extended the program to all California
counties, making it a statewide program.
This is a committee bill that has been introduced to remove
obsolete provisions of law concerning the start-up of the
California Low-Cost Automobile Insurance Program.
3)Arguments in support . This bill will repeal an existing law
requiring the IC to adopt emergency regulations no later than
60 days after the effective date of the original law (January
1, 200) which commenced the Low Cost Automobile Insurance
Program in the County of Los Angeles and the City and County
of San Francisco. The bill will also repeal the authority to
use emergency regulation in connection with commencing the
program in all of the other counties of the state.
Repealing the authority of the IC to adopt emergency regulations
in connection with the Low Cost Auto Insurance Program
clarifies the IC is required to adopt regulations through the
regular procedure established in law, the Administrative
Procedure Act, whenever he or she determines there is a need
to promulgate new regulations. The regular procedure
specifies that the public has 45 days advance notice of the
proposed regulations (Section 11346.4 of the Government Code)
and a sufficient opportunity for the public to comment on the
proposed regulations. Since the Low Cost Auto Insurance
Program has been operating statewide for over two years, there
AB 2779
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is no longer a need to retain the statutory authority for the
emergency regulations to start-up the program. There is
significantly less time given to the public to receive notice
and to comment on emergency regulations. Often that notice is
five days (Section 11346.1 of the Government Code).
REGISTERED SUPPORT / OPPOSITION :
Support
None received.
Opposition
None received.
Analysis Prepared by : Manny Hernandez / INS. / (916) 319-2086