BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 2084|
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THIRD READING
Bill No: AB 2084
Author: Solorio (D)
Amended: 7/5/12 in Senate
Vote: 21
SENATE INSURANCE COMMITTEE : 9-0, 6/28/12
AYES: Calderon, Gaines, Anderson, Corbett, Correa, Lieu,
Lowenthal, Price, Wyland
SENATE APPROPRIATIONS COMMITTEE : 7-0, 8/6/12
AYES: Kehoe, Walters, Alquist, Dutton, Lieu, Price,
Steinberg
ASSEMBLY FLOOR : 77-0, 5/30/12 - See last page for vote
SUBJECT : Blanket insurance
SOURCE : American International Group
DIGEST : This bill expands the types of blanket insurance
that may be offered by California admitted insurers.
ANALYSIS :
Existing law:
1. Provides that blanket insurance is that form of
insurance providing coverage for specified circumstances
and insuring by describing all persons within a class of
persons defined in a policy issued to a master
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policyholder, and not by specifically naming the persons
covered.
2. Provides that the permitted types of blanket insurance
are those where the blanket policy is issued to
specified entities, including, but not limited to, a
volunteer fire company providing benefits to members
only in the event of accident incurred while performing
actions incident to such membership and a proprietor or
sponsor of an organized camping institution providing
benefits to campers or persons responsible for their
support for death or dismemberment resulting from
accident, or for hospital, medical, surgical, or nursing
expenses resulting from accident or sickness related to
the camper's specified connection with the camping
institution.
3. Prohibits a person from transacting any class of
insurance business in this state without first being an
admitted insurer. Under existing law, admission is
secured by procuring a certificate of authority from the
Insurance Commissioner (Commissioner).
4. Authorizes the above-described blanket policies, among
others, to provide that the cost of the insurance
coverage is required to be paid by either the
policyholder, or the individuals insured or their
parents or guardians, payable through the policyholder.
5. Prohibits a blanket policy from being issued until
approved as to substance and form by the commissioner.
This bill:
1. Revises and recasts provision related to a volunteer
fire company and an organized camping institution to
instead include:
A. A volunteer or governmental fire department,
emergency medical services company, or similar
volunteer or governmental organization providing
benefits to members or participants only in the
event of accident incurred while performing actions
incident to an activity or operation sponsored or
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supervised by the department, company, or
organization.
B. A sports team or camp, as specified, providing
benefits to participants, campers, and other
specified persons responsible for their support for
death or dismemberment resulting from accident, or
for hospital, medical, surgical, or nursing
expenses resulting from specified accident or
sickness related to the participants, campers, or
other specified person's connection with the sports
team or camp, as specified.
2. Specifies other permitted types of blanket insurance,
providing specified benefits, issued to specified
entities that include, but are not limited to:
A. An employer providing accident benefits to any
group of workers, dependents, or guests, limited by
reference to specified hazards incident to
activities or operations of the employer.
B. Any common carrier or any operator, owner, or
lessor of a means of transportation providing
accident benefits to any specified group of persons
who may become lessees or passengers limited by
reference to travel status.
C. An entertainment production company providing
accident benefits to any group of participants,
volunteers, audience members, contestants, or
workers while engaged in any activity or operation
of the entertainment production company.
3. Extends existing provision to the newly established
permitted types of blanket insurance described above.
4. Requires an insurer who intends to issue a policy
according to these revised provisions to file, prior to
issuance, any new language in that policy to the
commissioner for approval.
5. Authorizes the person insured, when the premium is paid
for these types of blanket insurance, to request a copy
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of the policy from the insurer.
6. Authorizes the Commissioner to add to the list of
entities that may be eligible to purchase blanket
insurance for any risk or class of risks, relating to
accident benefits, as defined, which may be properly
eligible for blanket insurance.
7. Requires the Commissioner to issue and post on the
Commission's Internet Web site a letter order, as
specified, each time the Commissioner exercises his/her
discretion to add an entity to the list of entities
eligible to purchase blanket insurance. Allows the
Commissioner to withdraw the letter order in accordance
with current law.
8. Makes additional conforming, nonsubstantive changes.
Comments
In California, blanket insurance is a form of group
disability insurance that is provided by an authorized
policy holder to cover persons as a described class (not
necessarily by name) and only while engaged in specified
activities covered under the policy.
For example, under this bill, an entertainment organization
could provide accident insurance for participants, audience
members, contestants or volunteers while they are
participating, watching, or assisting in the production of
activities organized by the entertainment organization.
These individuals all run the risk of being injured while
participating, watching or assisting the production. The
blanket insurance policy (either standing alone, or as a
companion to a general liability policy) would keep
production costs down and would provide coverage regardless
of the liability of the organization producing the show.
Distinguished form General Liability . Unlike general
liability, which covers the policy holder, blanket
insurance covers the insured, but only for a specific
period defined in the policy. Group blanket coverage will
pay for a covered accident regardless of liability
insurance coverage and in addition to any coverage under
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workers' compensation. It is not exclusive, but in
addition to, those policies. Also, under some blanket
insurance policies, the cost of the policy may be passed to
the insured; in those cases, the insured may request a copy
of the policy.
Expands the Number of Eligible Classes . This proposal
updates the statute to expand the types of legitimate
businesses that could obtain a group blanket insurance
policy.
1. The bill updates and expand the scope of first
responder organizations to include governmental fire
departments and emergency service companies (the statute
is currently limited to only volunteer fire companies)
while performing actions incident to an activity or
operation sponsored or supervised by the policyholder.
2. It broadens the available coverage for any religious,
charitable, recreational, educational, athletic or civic
organization, or branch thereof to include any activity
or activities or operations on the premises of the
policyholder (rather than just activities supervised or
sponsored by the policyholder).
This bill adds the following classes of blanket insurance
defined by eligible policyholders and beneficiary classes
covering costs related to death or dismemberment, or for
hospital, medical, surgical, or nursing expenses
("specified costs") when engaged in defined activities:
1. Sports team operators providing benefits to sports team
participants and employees for specified costs resulting
from an accident.
2. An employer providing benefits to any group of workers,
dependents, or guests for specified costs resulting from
accidents related to specified hazards incident to
activities or operations of the employer.
3. Common carriers (planes, trains, buses, etc.) providing
benefits to lessees or passengers for specified costs
resulting from an accident based on their travel status
(for example, a policy issue to a cab company to cover
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passengers).
4. Entertainment production companies providing benefits
to participants, volunteers, contestants, audience
members, or workers resulting from an accident while
engaged in any activity or operation of the policy
holder.
Grants the Insurance Commissioner Discretion to Add
Classes . Additionally, this bill provides the Commissioner
the authority to add additional types of blanket insurance
(but may not change the substance of what is authorized).
This bill also allows the Commissioner to add other
entities eligible to purchase blanket insurance by issuing
and posting a letter order on the Department of Insurance
Web site.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee, first
year costs of $85,000 and annual ongoing costs of $99,000
to the Department of Insurance for a Staff Counsel position
to address the application workload. (Special)
SUPPORT : (Verified 8/6/12)
American International Group (source)
ASSEMBLY FLOOR : 77-0, 5/30/12
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall,
Bill Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Cedillo, Chesbro, Conway, Cook, Davis, Dickinson,
Donnelly, Eng, Feuer, Fong, Fuentes, Furutani, Beth
Gaines, Galgiani, Garrick, Gatto, Gordon, Grove, Hagman,
Halderman, Hall, Harkey, Hayashi, Roger Hern�ndez, Hill,
Huber, Hueso, Huffman, Jeffries, Jones, Knight, Lara,
Logue, Bonnie Lowenthal, Ma, Mansoor, Mendoza, Miller,
Mitchell, Monning, Morrell, Nestande, Nielsen, Norby,
Olsen, Pan, Perea, V. Manuel P�rez, Portantino, Silva,
Skinner, Smyth, Solorio, Swanson, Torres, Wagner,
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Wieckowski, Williams, Yamada, John A. P�rez
NO VOTE RECORDED: Fletcher, Gorell, Valadao
JJA:d 8/8/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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