BILL ANALYSIS �
SENATE INSURANCE COMMITTEE
Senator Ronald Calderon, Chair
AB 1551 (Torres) Hearing Date: June 27, 2012
As Introduced January 26, 2012
Fiscal: Yes
Urgency: No
VOTES: Asm. Floor(05/31/12)69-3/Pass
Asm. Appr. (05/02/12)16-1/Pass
Asm. Ins. (04/18/12)13-0/Pass
SUMMARY: Provides an exemption from the duty to report
automobile accidents to a private insurer if the accident occurs
while a public safety officer is driving his or her personal
vehicle at the request or direction of the employer, in the
course of the officer's duties, and would shift liability for
damages and injuries arising from those accidents to the
employers.
DIGEST
Existing law
1. Provides that no insurer shall, in issuing or renewing a
private automobile insurance policy to a peace officer, member
of the Department of the California Highway Patrol, or
firefighter, with respect to his or her operation of a private
motor vehicle, increase the premium on that policy for the
reason that the insured or applicant for insurance
has been involved in an accident while operating an
authorized emergency vehicle, as defined, in the performance
of his or her duty during the hours of his or her
employment;
2. Provides that a peace officer, member of the Department of
the California Highway Patrol, or firefighter shall not be
required to report any accident in which he or she is
involved while operating any employer-leased or
employer-rented vehicle, in the performance of his or her
duty during the hours of his or her employment, to any
person who has issued that peace officer, member of the
AB 1551 (Torres), Page 2
Department of the
California Highway Patrol, or firefighter a private
automobile insurance policy.
This bill
1. Would provide that no insurer shall, in issuing or renewing
a private automobile insurance policy to a peace officer,
member of the Department of the California Highway Patrol,
or firefighter, with respect to his or her operation of a
private passenger motor vehicle, increase the premium on
that policy for the reason that the insured or applicant for
insurance has been involved in an accident
while operating his or her private passenger motor vehicle
in the performance of his or her duty at the request or
direction of the employer;
2. Would additionally provide that a peace officer, member of
the Department of the California Highway Patrol, or
firefighter shall not be required to report, and the
employer of the same may not request or require that a peace
officer, member of the Department of the California Highway
Patrol, or firefighter report, any accident in which he or
she is involved while operating a private passenger motor
vehicle at the request or direction of his or her employer
in the performance of the employee's duty to any person who
has issued that peace officer, member of the Department of
the California Highway Patrol, or firefighter a private
automobile insurance policy;
3. Would also provide that in the event of a loss or injury
that occurs during any time period when the vehicle is
operated at the request or direction of the employer in the
performance of the employee's duty, the vehicle's owner
shall have no liability, and the employer shall be
considered the owner of the vehicle for liability purposes;
4. Would require that a good faith delay by an employee in
reporting the accident to his or her private passenger motor
vehicle liability insurer, under the circumstances
described, cannot be used by the insurer as a basis to claim
delayed reporting, noncooperation, prejudice, or the like as
a means of avoiding the defense or indemnity obligations
that would otherwise exist under the terms of the automobile
liability insurance policy or applicable law in the absence
of delayed reporting;
AB 1551 (Torres), Page 3
5. Would make conforming changes relating to proof of
financial responsibility, in the event of an accident
involving a private passenger motor vehicle operated on
behalf of a public agency.
COMMENTS
1. Purpose of the bill . To make it clear that in instance
where department transportation is needed, but not
available, employers do in fact assume responsibility for
any liability or expenses incurred when requiring their
on-duty personnel to engage in specified work-related
activities while using personal vehicles.
2. Background .
The bills sponsor, the California Professional Firefighters,
states:
Currently, the number of daily details for California
public safety officers, in particular firefighters, is
on the rise - from training exercises to providing
relief and transportation of crews and equipment on
major incidents. With more "detailing out" of
firefighters comes an increased demand on fire
departments to provide transportation and in certain
cases, greater pressure on firefighters to use their
privately-owned vehicles for such activities when
department-provided transportation is not authorized
or made available.
In a few instances, where a firefighter has been
ordered or pressured to use his or her personal
vehicle when on detail and is involved in an accident
while conducting fire department business, an employer
has refused to indemnify that firefighter from
liabilities that may follow.
Existing law protects peace officers, members of the CHP,
and firefighters who are involved in vehicular accidents,
AB 1551 (Torres), Page 4
while on the job. These public safety personnel are not
required to report accidents in which they are involved
while on the job to their private automobile insurance
carriers, nor are their private automobile insurance
carriers allowed to increase their rates, or refuse to renew
their policies, as a result of an on-the-job accident.
However, existing law limits this protection to situations
in which the peace officer, member of the CHP, or
firefighter is operating an authorized emergency vehicle or
an employer-leased or employer-rented vehicle at the
direction of his or her employer. The operation of a private
vehicle at the direction of his or her employer is not
protected.
a. Department of Insurance Regulations. According to
regulations adopted by CDI, a driver may not be determined
to be principally at fault in an accident if the "driver
was responding to a call of duty as a paid or volunteer
member of any police or fire department, first aid squad,
or of any law enforcement agency, while performing any
other governmental function in a public emergency." (10
CCR, � 2632.13.)
b. Preexisting Reimbursement for Insurance Costs. Public
employees using their personal vehicles for work purposes
are commonly provided reimbursement based on the number of
miles driven. The standard business rate of reimbursement
per mile is established each year by the Internal Revenue
Service. The current reimbursement rate is $0.555 per
mile. This rate includes items such as depreciation or
lease payments, maintenance and repairs, tires, gasoline
(including taxes), oil, insurance, and license and
registration fees when calculating the reimbursement rate.
c. Related Statutory Protections Already in Place.
i. Gov. Code � 820.2 for injuries
resulting from an act or omission where the act
or omission was the result of the exercise of the
discretion vested in employee, whether or not
such discretion be abused.
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ii. Gov. Code � 820.4 . A public
employee is not liable for his act or omission,
exercising due care, in the execution or
enforcement of any law.
iii. Gov. Code � 821.4 . A public
employee is not liable for injury caused by his
failure to make an inspection, or by reason of
making an inadequate or negligent inspection, of
any property, other than the property of the
public entity employing the public employee, for
the purpose of determining whether the property
complies with or violates any enactment or
contains or constitutes a hazard to health or
safety.
iv. Gov. Code � 822.2 . A public
employee acting in the scope of his employment is
not liable for an injury caused by his
misrepresentation, whether or not such
misrepresentation be negligent or intentional,
unless he is guilty of actual fraud, corruption
or actual malice.
v. Health and Safety Code � 1799.107 .
Neither a public entity nor emergency rescue
personnel �officer, employee, or member of a fire
department or fire protection or firefighting
agency] shall be liable for any injury caused by
an action taken by the emergency rescue personnel
acting within the scope of their employment to
provide emergency services, unless the action
taken was performed in bad faith or in a grossly
negligent manner.
vi. Labor Code � 2802 . An employer
shall indemnify his or her employee for all
necessary expenditures or losses incurred by the
employee in direct consequence of the discharge
of his or her duties, or of his or her obedience
to the directions of the employer, even though
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unlawful, unless the employee, at the time of
obeying the directions, believed them to be
unlawful.
vii. Vehicle Code � 17004 . A public
employee is not liable for civil damages on
account of personal injury to or death of any
person or damage to property resulting from the
operation, in the line of duty, of an authorized
emergency vehicle while responding to an
emergency call or when in the immediate pursuit
of an actual or suspected violator of the law, or
when responding to but not upon returning from a
fire alarm or other emergency call.
viii. Vehicle Code � 17004.5 . Any
private firm or corporation, or employee thereof,
which maintains a fire department and has entered
into a mutual aid agreement pursuant to Section
13855, 14095, or 14455.5 of the Health and Safety
Code shall have the same immunity from liability
for civil damages on account of personal injury
to or death of any person or damage to property
resulting from the operation of an authorized
emergency vehicle while responding to, but not
upon returning from, a fire alarm or other
emergency call as is provided by law for the
district and its employees with which the firm or
corporation has entered into a mutual aid
agreement, except when the act or omission
causing the personal injury to or death of any
person or damage to property occurs on property
under the control of such firm or corporation.
ix. Vehicle Code � 17157 . If a motor
vehicle is gratuitously loaned to a school
district, the bailee �the school] and not the
bailor �the lender] shall be deemed to be the
owner within the provisions of this chapter
notwithstanding the terms of any contract, until
the bailor retakes possession of the motor
vehicle.
AB 1551 (Torres), Page 7
d. Indemnification of Public Employees. Government Code
section 825 provides indemnification to public employees
under qualified circumstances, including a requirement
that the employee cooperate in his or her defense in good
faith. The sponsor has confirmed with the Committee that
it is the intent of the bill to grant only those
protections already in place to employees driving public
vehicles and does not intend to modify any of the
employees preexisting duties, such as the duty to
cooperate with the defense.
Under AB 1551, indemnity could extend to include injuries
caused by accidents related to poor vehicle maintenance
and other causes that are not related to the employment.
It was for this reason, in part, that Governor
Schwarzenegger vetoed AB 2151 (Torres, 2009-10 Legislative
Session).
e. Reimbursement of Public Entities by Private Insurers.
Procedural difficulties related to litigation arise
because AB 1551 requires the private automobile insurer to
reimburse the employer if it is subsequently determined
that the employer did not direct or request the employee
to use the private passenger motor vehicle when the loss
occurred that gave rise to the claim. The author and
representatives from the insurance industry have drafted
suggested amendments to address challenges based on these
provisions. Those amendments are listed below.
3. Summary of Arguments in Support
Several representatives of public safety employees write
that often times, employers refuse to indemnify on-duty
employees who are involved in an accident while using a
private vehicle. AB 1551 clarifies that when an emergency
arises and department transportation is needed but not
available, employers assume insurance liability if they
request or direct their firefighters or officers to operate
a private vehicle to engage in work-related activities.
4. Summary of Arguments in Opposition
AB 1551 (Torres), Page 8
a. California Association of Joint Powers Authorities
(CAJPA) writes that making local agencies primarily liable
for liabilities that the peace officer or firefighters
create in the use of their own vehicle, even if used while
in the performance of their duties, creates an additional
cost on local agencies that they cannot afford in these
times of economic stress. Further, forcing the local
agency to assume the liability of the peace officer or
firefighter until such time as it is determined that the
person was not acting in the performance of his or her
duties at the time of the claim will cause additional
costs of defense if the issue of acting within the course
and scope of his or duties cannot be litigated along with
the liabilities of the peace officer or firefighter.
b. The California State Association of Counties (CSAC)
and the League of California Cities (LCC) oppose AB 1551
because they feel it is unnecessary to make this change
because local jurisdictions have adopted policies and
memoranda of understanding to address liability for
accidents involving personal vehicles. CSAC and LCC feel
that if represented employees believe there is a problem,
the local bargaining table is the appropriate place to
address it.
c. The California Excess Insurance Authority (CSAC EIA)
argues that very frequently when an off duty officer is
involved in an accident while on call, it can be a
difficult and long process to determine if the officer was
factually on duty at the time of an accident. CSAC EIA
does not believe that the employers should have to bear
these costs until the employment status can be determined.
d. The CSAC EIA also expresses concerns that AB 1551
would increase litigation costs as plaintiff's try to
reach the deep pockets of a public entity by alleging an
employment relationship where that relationship doesn't
exist.
e. The Regional Council of Rural Counties asks why a
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measure is needed for public safety employees when current
law already addresses issues involving legal liabilities
for personal vehicles used during an emergency and why it
is appropriate public policy for this group of employees
to enjoy the benefits of this shift in liability over any
other employee group?
1. Suggested Amendments .
a. Amend Page 3, line 30, to Page 4, line 32, to read
557.5. (a) A peace officer, member of the
Department of the California Highway Patrol, or
firefighter shall not be required to report, nor shall
any employer of the same be authorized to request or
require that a peace officer, member of the Department of
the California Highway Patrol, or firefighter report, any
accident in which he or she is involved while operating
an authorized emergency vehicle, as defined in
subdivision (a), (b), or (f) of Section 165 of the
Vehicle Code, or any employer-leased or employer-rented
vehicle in the performance of his or her
duty during the hours of his or her employment, vehicle,
or any private passenger motor vehicle that is owned,
leased, or rented by the employee, if operated at the
request or direction of the employer in the performance
of the employee's duty to any person who has issued that
peace officer, member of the Department of the California
Highway Patrol, or firefighter a private automobile
insurance policy.
(b) (1) Notwithstanding any other provision of law or
any provision in a private passenger motor vehicle
owner's automobile liability insurance policy, in the
event of a loss or injury that occurs as the result of an
accident during any time period when the that private
passenger motor vehicle is operated by an employee who is
a peace officer, member of the Department of the
California Highway Patrol, or firefighter and is used by
him or her at the request or direction of the employer in
the performance of the employee's duty, the vehicle's
owner shall have no liability. The peace officer, member
of the Department of the California Highway Patrol, or
firefighter shall report and provide, within 10 days of
the accident, to his or her private automobile insurer
AB 1551 (Torres), Page 10
all documentation and information known to him or her
related to the accident. The employer shall be
considered the owner of the vehicle for the purpose of
Section 17150 of the Vehicle Code any liability and
defense of the claim and any losses shall be borne solely
by the employer.
(2) Notwithstanding any other provision of law, the
employer shall assume liability for and defense of a
claim in which a dispute exists as to whether the
employer directed or requested the employee to use the
private passenger motor vehicle when the loss occurred
that gave rise to the claim.
(3) If it is subsequently determined that the employer
did not direct or request the employee to use the private
passenger motor vehicle when the loss occurred, the
employer and employee shall provide notice to the private
passenger motor vehicle's insurer of this determination
and provide all documentation and information known to
him or her related to the claim or loss to the private
passenger motor vehicle's insurer within 10 days of the
determination. The private passenger motor vehicle
insurer that insures the vehicle shall reimburse the
employer the reasonable costs of defense to the extent of
the insurer's obligation and up to the coverage limits
under the applicable automobile liability insurance
policy if it is subsequently determined that the employer
did not direct or request the employee to use the private
passenger motor vehicle when the loss occurred that gave
rise to the claim .
(3) (4) A good faith delay by an employee in reporting
the accident to his or her private passenger motor
vehicle liability insurer, under the circumstances
described in this section, shall not be used by the
insurer as a basis to claim delayed reporting,
noncooperation, prejudice, or the like as a means of
avoiding the defense or indemnity obligations that would
otherwise exist under the terms of the automobile
liability insurance policy or applicable law in the
absence of delayed reporting. This subdivision shall
apply only if the employee complies with requirements
under paragraphs (1) and (3) of subdivision (b).
(5) This subdivision shall not apply to the operation
of a private passenger motor vehicle when operated by an
employee, otherwise subject to this section, for the
purposes of reporting to or from his or her regularly
assigned work location.
AB 1551 (Torres), Page 11
b. After Page 5, line 7, add:
Section 791.12 of the Insurance Code is amended, to read:
791.12. No insurance institution or agent may base an
adverse underwriting decision in whole or in part on the
following:
(a) On the fact of a previous adverse underwriting
decision or on the fact that an individual previously
obtained insurance coverage through a residual market
mechanism; provided, however, an insurance institution or
agent may base an adverse underwriting decision on
further information obtained from an insurance
institution or agent responsible for a previous adverse
underwriting decision. The further information, when
requested, shall create a conclusive presumption that the
information is necessary to perform the requesting
insurer's function in connection with an insurance
transaction involving the individual and, when reasonably
available, shall be furnished the requesting insurer and
the individual, if applicable.
(b) On personal information received from an
insurance-support organization whose primary source of
information is insurance institutions; provided, however,
an insurance institution or agent may base an adverse
underwriting decision on further personal information
obtained as the result of information received from an
insurance-support organization.
(c) On the fact that an individual has previously
inquired and received information about the scope or
nature of coverage under a residential fire or property
insurance policy, if the information is received from an
insurance-support organization whose primary source of
information is insurance institutions and the inquiry did
not result in the filing of a claim.
(d) On the fact that an accident involving a peace
AB 1551 (Torres), Page 12
officer, member of the California Highway Patrol, or
firefighter has been reported and the insurer retains no
liability pursuant to subdivision (b) of section 557.5
and Section 488.5 of the Insurance Code .
1. Prior and Related Legislation
a. SB 629 (Correa) (enacted as Chapter 211, Statutes of
2007) repealed the requirement that peace officers and
firefighters involved in a vehicular accident submit a
written statement, under penalty of perjury, or a copy of
the incident report filed with their employer, to their
private automobile insurer.
b. AB 1115 (S. Runner) (enacted as Chapter 85, Statutes
of 2008) expanded the definition of an authorized
emergency vehicle used in the performance of duty by a
peace officer, member of the CHP, or firefighter to
include vehicles that are rented or leased by the employer
for official purposes;
c. AB 2151 (Torres, 2009-10 Legislative Session). A
prior bill identical to AB 1551 that was vetoed by
Governor Schwarzenegger because he felt that granting
indemnification in all situations regardless of the
driver's fault was unwarranted.
POSITIONS
Support
American Federation of State, County and Municipal Employees
(AFSCME). AFL-CIO
Association of Orange County Deputy Sheriffs
Association for Los Angeles Deputy Sheriffs
California Professional Firefighters (CPF)/Sponsor
California Association of Highway Patrolmen (CAHP)
California State Sheriffs' Association (CSSA)
California Fraternal Order of Police
CDF Firefighters Local 2881
AB 1551 (Torres), Page 13
Los Angeles County Professional Peace Officers Association
Long Beach Police Officers Association
Los Angeles Police Protective League
Los Angeles County Probation Officers' Union, AFSCME, Local 685
Orange County Professional Firefighters' Association
Peace Officers Research Association of California (PORAC)
Riverside Sheriffs' Association
Sacramento County Deputy Sheriffs Association
San Diego Schools Police Officers Association
San Diego Unified School District (SDUSD)
Santa Ana Police Officers Association
Opposition
California State Association of Counties (CSAC)
Legislative Committee of the Redwood Empire Division
California Association of Joint Powers Authorities (CAJPA)
California Joint Powers Insurance Authority (California JPIA)
California Excess Insurance Authority (CSAC EIA)
League of California Cities, Los Angeles Division
Mayor Ashley Swearengin (City of Fresno)
Northern California Cities Self Insurance Fund (NCCSIF)
Regional Council of Rural Counties (RCRC)
Small Cities Organized Risk Effort (SCORE)
Cities
Antioch
Beverly Hills
Canyon Lake
Cathedral City
Claremont
Cloverdale
Corning
Costa Mesa
Crescent City
Cypress
Duarte
Encinitas
Fountain Valley
Folsom
Glendora
Gridley
Huntington Beach
La Habra
Lynwood
AB 1551 (Torres), Page 14
Moorpark
Pismo Beach
Redwood City
San Luis Obispo
San Mateo
Santa Rosa
South San Francisco
Sunnyvale
Thousand Oaks
Consultant: Hugh Slayden, (916) 651-4773