BILL ANALYSIS �
AB 1024
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CONCURRENCE IN SENATE AMENDMENTS
AB 1024 (Hueso)
As Amended August 30, 2011
Majority vote
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|ASSEMBLY: |76-0 |(May 31, 2011) |SENATE: |33-3 |(September 7, |
| | | | | |2011) |
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Original Committee Reference: INS.
SUMMARY : Authorizes insurance agents and brokers to sell
low-cost auto insurance through an Internet Web site, requires
the California Automobile Assigned Risk Plan (CAARP) to
establish or contract with an entity to operate a Web site to
sell low-cost auto insurance policies, and revises a notice
statement sent to vehicle owners.
The Senate amendments:
1)Revise the notice statement required to be sent by the
Department of Motor Vehicles (DMV) to vehicle owners prior to
suspension or revocation of vehicle registration.
2)Require this notice statement to identify the Department of
Insurance (DOI) Web site that describes California Low-Cost
Automobile Insurance and to identify selected eligibility
criteria to qualify for this program.
EXISTING LAW :
1)Establishes a Low-Cost Automobile Insurance Program (Program)
within CAARP that is authorized to operate in all counties of
the state.
2)Specifies the eligibility requirements for a person to
participate in the Program including an income threshold, no
less than 19 years of age, and a good driving record.
3)Requires the Department of Motor Vehicles (DMV) to suspend or
revoke the registration of a vehicle when DMV determines that
false information of financial responsibility was provided to
the Department, or evidence of financial responsibility has
not been submitted to the Department within 30 days.
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4)Requires the DMV to notify and provide the vehicle owner,
prior to suspending or revoking the vehicle registration, a
reasonable time to provide evidence of financial
responsibility.
5)Requires the DMV to provide residents on the notice document a
statement advising that a program offering affordable
automobile insurance for low income families has been
established and that individuals may call a specified
toll-free phone number for the California Automobile Assigned
Risk Plan.
AS PASSED BY THE ASSEMBLY , this bill:
1)Authorized a CAARP-certified "producer" (i.e., insurance agent
or broker) to accept and process applications to purchase
low-cost automobile insurance policies through an Internet Web
site.
2)Required CAARP to establish, or to contract with an entity to
establish, an Internet Web site that shall provide the public
with an option for either of the following:
a) Referral to a list of certified agents or brokers with
an office in the same geographic area as the consumer who
may be contacted to purchase a low-cost automobile
insurance policy.
b) Assignment to a randomly selected certified agent or
broker in the same geographic area as the consumer who can
be accessed online to process and accept an application to
purchase a low-cost automobile insurance policy.
FISCAL EFFECT : One-time costs to the Department of Insurance to
develop the required system and Internet Web site are estimated
to be $160,000 payable from the Insurance Fund.
COMMENTS : The Low-Cost Automobile Insurance Program has
provided more than 59,000 Californians with affordable auto
insurance since its inception. There were 11,516 policies in
force at the end of 2010. Current law authorizes agents and
brokers to offer low-cost auto insurance policies in addition to
regular auto policies. The DOI reports that two-thirds of new
policies assigned were to applicants who were uninsured at the
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time of the application, and that the predominant vehicle value
was less than $5,000.
The author states that while current law permits licensed
brokers to sell low-cost auto insurance, it does not allow
on-line processing or sales of this insurance. This bill would
authorize both the processing and sale of low-cost auto
insurance through an authorized Web site. Supporters state this
bill will enable more uninsured drivers to attain the minimum
level of coverage required by law, and help achieve the goal of
that law: to reduce the number of uninsured drivers.
Analysis Prepared by : Manny Hernandez / INS. / (916) 319-2086
FN: 0002461