BILL ANALYSIS �
AB 2019
Page 1
Date of Hearing: April 10, 2012
ASSEMBLY COMMITTEE ON HUMAN SERVICES
Jim Beall Jr., Chair
AB 2019 (Hill) - As Amended: March 29, 2012
SUBJECT : Foster Family Home and Small Family Home Insurance
Fund
SUMMARY : Establishes requirements regarding the Foster Family
Home and Small Family Home Insurance Fund (Fund). Specifically,
this bill :
1)Requires the Department of Social Services (DSS) or designated
agency to notify a claimant of the decision to approve or
reject a claim within 15 days of the decision.
2)Provides that an applicable statute of limitations period for
a cause of action arising out of the same occurrence for which
a claim has been filed with the Fund shall not commence until
the date DSS, or designated agency, has notified the person
that the department has either rejected or approved the claim.
3)Requires the Fund to be maintained at an adequate level to
meet anticipated liabilities.
4)Prohibits homeowner's or tenant's insurance policy issuers
from failing to accept an application for that insurance or
cancelling that insurance solely because the applicant or
policyholder is engaged in foster home activities in a
certified family home.
EXISTING LAW
1)Provides that it is the policy of this state that all children
in foster care have specified rights, including the right to
live in a safe, healthy, and comfortable home in which he or
she is treated with respect, and the right to be free from
physical, sexual, emotional or other abuse, or corporal
punishment. Welfare & Institutions (W&I) Code � 16001.9.
2)Declares the intent of the Legislature that all children are
entitled to be safe and free from abuse and neglect, and
establishes a public system of statewide child welfare. W&I
Code � 16500 et seq.
AB 2019
Page 2
3)Provides for the licensure and regulation of foster family
homes and small family homes by DSS.
4)Defines "foster family agency" (FFA) as any organization
engaged in the recruiting, certifying, and training of, and
providing professional support to, foster parents, or in
finding homes or other places for placement of children for
temporary or permanent care who require that level of care as
an alternative to a group home. Health & Safety (H&S) Code �
1502(a)(4).
5)Establishes the Fund to pay claims of foster children or their
parents or guardians "resulting from occurrences peculiar to
the foster-care relationship and the provision of foster-care
services." H&S Code � 1527.1.
6)Provides that the Fund shall not be liable for damages in
excess of $300,000 for any single foster family home or small
family home for all claims arising due to one or more
occurrences during a single calendar year. H&S Code � 1527.4.
7)Requires claims against the Fund to be submitted within the
applicable statute of limitations period as applied to a
minor, and provides that if the claim is not timely submitted,
there shall be no recourse against the Fund.
8)Requires, as a condition of bringing a civil action against a
foster parent for which the Fund is liable, that an individual
first file a claim against the Fund and either receive a
rejection of the claim or receive payment from the Fund of
less than the damages alleged. H&S Code � 1527.6(d).
9)Requires DSS to approve or reject a claim within 180 days
after it is presented.
10)Declares the intent of the Legislature that the Fund be
maintained at an adequate level to meet anticipated
liabilities.
11)Prohibits insurers from failing or refusing to accept an
application for homeowner's or tenant's insurance or to issue
that insurance to an applicant or cancel that insurance,
solely on the basis that the applicant or policyholder is
AB 2019
Page 3
engaged in foster home activities in a licensed foster family
home or licensed small family home. Insurance Code � 676.7.
FISCAL EFFECT : Unknown
COMMENTS :
Background : Established in 1986 (SB 1159 (Royce), Chapter 1330,
Statutes of 1986) as a response to concerns about foster parent
liability, the Fund was originally created to protect families
from losing their homeowners insurance when they took in foster
children. The Fund started as a pilot project and was expanded
statewide when it was found by the counties to be a useful tool
for recruiting foster parents.
Funds are accessible by aggrieved foster children or their
guardians for a non-intentional injury that occurs while in
foster care placement. The Fund provides defense and
indemnification for foster parents who are facing potential
liability for injuries to foster children in their care.
Both the Fund and Insurance Code Section 676.7, which prohibits
the denial of homeowner's or tenant's insurance policies to
foster care providers, apply only to DSS-licensed foster family
homes and small family homes, but not to homes certified by a
licensed FFA. When the Fund was created, FFAs were not a big
part of the foster care system. In fact they were only created
in the mid-1980s when "the Legislature became concerned about
(1) the increased use of group homes; (2) the associated cost
increases in the foster care program; and (3) county
difficulties recruiting and retaining foster parents. The FFAs
were created to address some of these concerns. The FFAs were
intended to: (1) provide an alternative placement in a family
setting to the more expensive group homes; (2) increase the
availability of foster care placement resources; and (3) provide
an enhanced level of service to foster children and families."
Legislative Analyst's Office, Analysis of the 2002-03 Budget
Bill: Foster Care.
http://www.lao.ca.gov/analysis_2002/health_ss/healthss_17_Foster_
care_anl02.htm .
The author, citing a report of the Public Policy Institute of
California (PPIC), points out that "�i]n 2000 only 23% of
children were initially placed with an FFA, but by 2009 the
proportion doubled to 46%." Danielson, C. and Lee, H., Foster
AB 2019
Page 4
Care in California Achievements and Challenges, PPIC (2010).
http://www.ppic.org/content/pubs/report/R_510CDR.pdf .
Bureau of State Audits (BSA) Report : In the fall of 2011, the
BSA conducted an audit of the Fund and identified a number of
issues, including the following:
DSS did not ensure claims were approved or rejected within the
180 day required time frame-even though they are mandated by
law to do so.
The Department of General Services (DGS)-retained to manage
the insurance fund's claims process-took between 182 and 415
days to approve or reject 16 of the 118 claims reviewed.
DGS did not consistently apply its policy of "procedurally
rejecting" claims that it has not already approved or rejected
by the 180 day deadline-one claim was rejected 210 days after
the deadline.
DSS maintains an unnecessarily high reserve for the insurance
fund because it has not obtained certain claims information
nor has it established an appropriate methodology for
determining the insurance fund's anticipated liabilities.
Foster Family Home and Small Family Home Insurance Fund:
Expanding Its Coverage Will Increase Costs and the Department of
Social Services Needs to Improve Its Management of the Insurance
Fund, BSA Report 2010-121 (September 2011)
( http://www.bsa.ca.gov/pdfs/reports/2010-121.pdf ).
Statutes of limitations
Statutes of limitations restrict the time within which legal
proceedings may be brought. Statutes of limitations are
designed to prevent fraudulent and stale claims from arising
after all evidence has been lost or after the facts have become
obscure through the passage of time or the defective memory,
death, or disappearance of witnesses.
Statutes of limitations are relevant to the Fund in two ways:
First, claims must be filed with the Fund within the applicable
statute of limitations period for a civil action based on the
same occurrence for which the claim is made. Second, a claim
against the Fund and determination by the Fund are prerequisites
to filing a civil claim. Therefore, the statute of limitations
on the legal claim runs and may even expire prior to the
determination on the claim against the Fund. The latter
situation is exacerbated by the fact that, as the BSA noted,
AB 2019
Page 5
claims are often not acted on within the required 180 days.
This bill addresses this issue by providing that any limitations
period for filing a court action based on the same occurrence
for which a claim is made against the Fund "shall not commence
until" the claim has been accepted or rejected. The author says
that, "by extending the statutes of limitations for claims that
go through the Fund, this bill takes an important step in
ensuring that any child that is harmed while in foster care has
the same right to due process as anyone else."
Does this bill extend the statute of limitations too far ?
This bill provides that an applicable statute of limitations for
bringing a court action does not "commence" until the claimant
has been notified of the determination of his or her claim
against the Fund. This would seem to mean that the statute of
limitations period could be more than doubled. If, for example,
the limitations period is 2 years, an individual could wait
until the day before the expiration of the 2 years to file a
claim with the Fund. Under this bill, however, the limitations
period would be deemed not to run until a determination on the
claim, which can be up to 180 days (or 6 months) after the claim
is submitted. At that point, the statute of limitations would
"commence"-in effect, restart-thereby giving the claimant an
additional 2 years to bring a court action, for a total of four
and a half years.
The author's intent would seem to be better served by providing
that the filing of a claim against the Fund merely "tolls"-that
is suspends-the statute of limitations from the time of
submitting the claim until notice of the final determination.
This means that if the claimant delays filing a claim against
the Fund until close to the end of the limitations period he or
she would have little time to file a court action after being
notified of the determination; however, that would have been the
effect of delay even without the requirement of filing a claim
against the Fund. Tolling, rather than restarting, the
limitations period would be fair to both the claimant and to
potentially liable parties in a civil action. It is
recommended, therefore, that this bill be amended as indicated
below.
Insurance discrimination
This bill also addresses the fact that foster homes certified by
FFAs do not have the same protections against discrimination
with respect to homeowners' and tenants' insurance policies as
AB 2019
Page 6
do licensed foster homes and licensed small family homes.
"Absent coverage by the Fund," the author says, "the state
should make it as easy as possible for certified foster parents
to be able to buy insurance coverage to protect their
resources." To afford certified homes the same access to
homeowners' or renters' insurance as foster family homes and
small family homes to the extent claims are not covered by the
Fund, this bill adds to the prohibitions on insurance
discrimination against licensed foster family homes or licensed
small family homes, protection for certified family homes.
Aspiranet, an FFA, notes in support of this bill that "�t]this
bill does not deal with all of the issues raised in the �BSA]
audit, but it provides one step forward in treating foster
parents alike in terms of their ability to receive homeowner and
tenant insurance coverage on the private market." Aspiranet
says that "this could help with the recruitment and retention of
families who might be interested in becoming foster parents, but
have concerns about obtaining appropriate homeowners and tenets
insurance as they care for foster children in their homes."
Prior legislation :
AB 2206 (Hill, 2010) - Would have limited the Fund liability
exclusions to only those criminal or intentional acts committed
by a foster parent. AB 2206 was held in the Assembly
Appropriations Committee.
SB 706 (Florez, 2004) - Would have narrowed the scope of the
Fund and would have, among other provisions, specified that
losses arising from criminal, intentional or fraudulent acts by
a foster parent or a person residing in the home were excluded
from liability, even if there was a related allegation of
negligence. SB 706 died in the Assembly Judiciary Committee
without a hearing.
AB 1467 (Alby, 1997) - Clarified the scope of coverage of the
Fund by, among other things, including members of the foster
parent's household under the exclusion of liability from the
Fund for immoral or sexual behavior. AB 1467 passed the
Assembly but died after it was not heard in the Senate Health
and Human Services Committee.
SB 470 (Royce), Chapter 195, Statutes of 1988, - Removed a
sunset date, allowing for continuation of the Fund.
AB 2019
Page 7
SB 1159 (Royce), Chapter 1330, Statutes of 1986 - Established
the Fund and prohibited insurance carriers from rejecting any
applicant or policyholder solely on the basis that they were
foster parents.
RECOMMENDED AMENDMENT :
Amend Section 1527.6(d)(2), page 3, lines 31-36, as follows:
(2) An applicable statute of limitations for a cause
of action that arises out of the same occurrence for
which a claim has been filed with the fund shall not
commence until be tolled from the date a claim against
the fund has been filed until the date the department,
or an agency designated pursuant to Section 1527.1,
has notified the person that the department has either
rejected or approved the claim.
REGISTERED SUPPORT / OPPOSITION :
Support
Aspiranet
California Alliance of Child and Family Services
Opposition
None on file.
Analysis Prepared by : Eric Gelber / HUM. S. / (916) 319-2089