BILL ANALYSIS
SB 156
Page 1
SENATE THIRD READING
SB 156 (Wright)
As Amended August 9, 2010
Majority vote
SENATE VOTE : 35-0
INSURANCE 10-0 JUDICIARY 10-0
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|Ayes:|Solorio, Garrick, |Ayes:|Feuer, Tran, Brownley, |
| |Anderson, | |Evans, Chesbro, Knight, |
| |Charles Calderon, Carter, | |De La Torre, Lieu, |
| |Feuer, Hayashi, Nava, | |Monning, Niello |
| |Niello, Torres | | |
| | | | |
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SUMMARY : Authorizes the Insurance Commissioner (IC) to convene
meetings with representatives of insurers to discuss suspected
or completed acts of insurance fraud. Specifically, this bill :
1)Authorizes the IC or designated deputy commissioner to convene
meetings with representatives of insurance companies to
discuss specific information concerning suspected,
anticipated, or completed acts of insurance fraud.
2)Specifies that information shared during the course of these
meetings shall not make a person subject to civil liability
for libel, slander, or any other relevant cause of action if
all of the following conditions are met:
a) The IC or designated deputy commissioner is present at
the meeting;
b) The IC or designated deputy commissioner advises meeting
participants, at the beginning of the meeting, of
guidelines to ensure compliance with federal and state
antitrust laws; and,
c) There is no fraud or malice on the part of the
representatives of the insurance companies or the IC or
designated deputy commissioner.
EXISTING LAW :
SB 156
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1)Requires insurance companies to operate a unit or division to
investigate possible fraudulent claims by insured persons.
2)Requires an insurance company, upon a written request by an
authorized governmental agency, to release all relevant
information possessed by the insurance company related to any
specific insurance fraud. "Authorized governmental agency"
includes various state agencies including the California
Department of Insurance (CDI), police departments, and county
district attorneys.
3)Provides insurers with immunity from civil liability for libel
or slander for releasing information to authorized
governmental agencies about specific insurance fraud. The
only exceptions to this immunity are in the event of fraud or
malice on the part of the insurer.
FISCAL EFFECT : None. The bill provides the IC with the
authority to convene meetings specified by the bill, but it does
not require the convening of these meetings.
COMMENTS :
1)This bill would implement a recommendation of the CDI's
Advisory Task Force on Insurance Fraud. The author states
that the purpose of the bill is to allow the IC to convene
meetings with insurers, where the IC or a designated deputy
commissioner would be in constant attendance, to discuss
suspected or confirmed cases of fraud in order to share basic
information about insurance trends and other information to
help reduce insurance fraud. The bill aims to enable people
who see different parts of the fraud puzzle to put their
pieces together to reveal patterns of fraud.
2)This bill is sponsored by the author who notes that in May
2008, the CDI Advisory Task Force on Insurance Fraud made a
series of recommendations to the Insurance Commissioner to
help reduce insurance fraud, including strengthening the
immunity provisions for insurance companies that report
suspected fraud and cooperate in investigations in accordance
with the National Association of Insurance Commissioners
(NAIC) Insurance Fraud Prevention Model Act.
Additionally, the May 2008 report of the CDI Advisory Task Force
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on Insurance Fraud, entitled "Reducing Insurance Fraud in
California," reported the following:
a) Insurance fraud in California totals over $15 billion
each year, and results in higher insurance costs, higher
taxes, and lower levels of government services;
b) Insurance fraud is the second most costly crime in
America; and,
c) Insurance fraud can directly affect innocent,
law-abiding people, dramatically changing their lives
forever. For example, fraud perpetrators have staged
collisions resulting in loss of life, and have driven
companies out of business by damaging their bottom line and
their hard-earned reputation. Vulnerable groups such as
seniors, recent immigrants, or small businesses may be
special targets of sophisticated swindlers.
Analysis Prepared by : Manny Hernandez / INS. / (916) 319-2086
FN: 0005531