BILL ANALYSIS �
AB 2084
Page 1
ASSEMBLY THIRD READING
AB 2084 (Solorio)
As Amended May 25, 2012
Majority vote
INSURANCE 13-0 APPROPRIATIONS 17-0
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|Ayes:|Solorio, Hagman, |Ayes:|Fuentes, Harkey, |
| |Bradford, | |Blumenfield, Bradford, |
| |Charles Calderon, Carter, | |Charles Calderon, Campos, |
| |Feuer, | |Davis, Donnelly, Gatto, |
| |Beth Gaines, Hayashi, | |Ammiano, Hill, Lara, |
| |Miller, Olsen, Skinner, | |Mitchell, Nielsen, Norby, |
| |Torres, Wieckowski | |Solorio, Wagner |
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SUMMARY : Expands the list of eligible policyholders who can
purchase blanket insurance. Specifically, this bill :
1)Expands the list of eligible policyholders who can purchase
blanket insurance to include:
a) Any governmental fire department, emergency medical
services company or similar volunteer or governmental
organization, in the event of an accident incurred during
activities related to the functions of these organizations.
b) A sports team, camp or sponsor of a sports team or camp,
providing benefits to participants, campers, or supervisors
for accidents or sickness, provided the sickness first
arises during the activities associated with the
organization.
c) An employer providing accident benefits to any group of
workers, dependents or guests, limited to hazards incident
to the activities or operations of the employer.
d) A common carrier or other owner, operator or lessor of a
means of transportation, providing accident benefits to any
group of persons who may be lessees or passengers or the
carrier.
e) An entertainment production company providing accident
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benefits to any group of participants, volunteers, audience
members, contestants, employees or independent contractors
while engaged in the activities of the production company.
2)Authorizes the Insurance Commissioner (commissioner) to, in
his or her discretion, add other classes of entities that may
be eligible to purchase blanket insurance.
EXISTING LAW :
1)Defines blanket insurance as a form of insurance that provides
coverage for specified circumstances, and insuring a class of
persons by reference to a description of that class, and not
by specifically naming the persons covered.
2)Limits the classes of persons who may be covered by blanket
insurance by specifying who may be a policyholder, and the
scope of coverage that the particular policyholder may
purchase. The existing eligible policyholders include:
a) A volunteer fire department.
b) A college, school or other institution of learning, a
school district, providing benefits to students without
restriction as to activity time or place, and to teachers
or other employees while performing actions incident to
special duties related to extracurricular activities.
c) A camping institution providing benefits to
participants, campers, or supervisors for accidents or
sickness, provided the sickness first arises during the
activities associated with the organization.
d) A newspaper, magazine or other publication, providing
benefits to independent contractors such as carriers,
newsboys, dealers, distributors, wholesalers or others
engaged in the marketing or delivery of the publication.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, Insurance Fund (special fund) costs of up to $85,000
in the first year, and up to $100,000 ongoing, due to increased
policy form filings with the Department of Insurance.
COMMENTS : According to the sponsor, American International
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Group (AIG), blanket insurance is a valuable tool to control
risk for a broad array of organizations that carry on group
activities involving participants or other people not
specifically known to the organization in advance, or, if known,
the identities of the participants are constantly changing
within the class of people participating in the activities.
However, the law has not evolved in many years, and as a result
numerous organizations that would like to purchase blanket
insurance are unable to do so because California law is
outdated. The modernization of the blanket insurance law will
enable California organizations that wish to purchase this
protection for those participating in their activities to do so.
Because California law restricts who may be a purchaser of
blanket insurance, admitted (licensed) insurers are barred from
selling this coverage to any policyholder not specified in the
statute. However, any Californian has the right, under the law
governing nonadmitted or surplus line insurance to buy insurance
from unlicensed companies if an insurance need is not being met
by admitted insurers. As a result, any organization not
authorized by statute must seek this coverage in the nonadmitted
market, or forego the protection. As a general rule, the law
and public policy favor the use of admitted insurers due to the
vastly superior regulatory environment that governs admitted
insurers. According to AIG, its primary competitors in this
market are nonadmitted carriers such as Lloyd's of London.
Analysis Prepared by : Mark Rakich / INS. / (916) 319-2086
FN: 0003947