BILL ANALYSIS �
AB 2264
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Date of Hearing: May 2, 2012
ASSEMBLY COMMITTEE ON INSURANCE
Jose Solorio, Chair
AB 2264 (Knight) - As Amended: April 26, 2012
SUBJECT : Insurance Fraud Investigators
SUMMARY : Provides civil immunity for private insurance fraud
investigators when they report unlawful activity not related to
insurance fraud in the course of an investigation.
Specifically, this bill :
1)Requires insurers, and agents authorized to act on the
insurer's behalf, to provide, upon request of peace officers
employed by specified agencies, any and all useful information
regarding unlawful activity unrelated to insurance fraud that
is uncovered in the course of an insurance fraud
investigation.
2)Specifies that insurers, employees of insurers, and agents of
an insurer are not subject to civil liability for providing
information to an authorized government agency regarding
unlawful activity discovered in the course of an insurance
fraud investigation.
EXISTING LAW :
1)Requires insurers and their agents to provide, upon request of
peace officers employed by specified agencies, any and all
relevant information regarding insurance fraud including:
insurance policy information, payment records, claims history,
and information gathered in the course of a fraud
investigation.
2)Specifies that insurers, employees of insurers, and agents of
an insurer are not subject to civil liability for providing
information regarding insurance fraud when the information is
requested by an authorized government agency.
FISCAL EFFECT : Unknown.
COMMENTS :
1)Purpose . According to the author, insurers employ special
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investigation units (SIU) to investigate suspected fraud.
These individuals collect information and research cases
through interviews with all those involved and make a
determination if fraud has been committed. In the course of
completing these investigations, SIU personnel may encounter
evidence of other types of unlawful activity on the part of
the insured or related parties. Because this activity is not
directly related to the potential insurance fraud, SIU's face
the threat of lawsuits from defendants in fraud cases alleging
defamation of character and other malicious intent if they
choose to report these activities to the appropriate
authorities. Although significant and substantive evidence of
unlawful activity may be revealed, SIU's often do not report
this information to the authorities as a result.
2)Right of Access. Policyholders are required by their
insurance policy to cooperate with SIU investigators and
cannot deny access to SIU investigators in the same fashion
they may deny access to peace officers who seek entry without
a search warrant. The bill would have the effect of allowing
SIU investigators to gather evidence of suspected unlawful
activity that would not be legally accessible by a peace
officer.
3)Amendments . The amendments adopted on April 26, 2012 expand
the scope of immunity from civil litigation which the author
adopted to address insurer opposition.
4)Prior Legislation . Assembly Bill 802 (Duvall), introduced in
2009 with similar provisions (not the immunity language),
passed this committee on a 10-0 vote. While the bill passed
the Assembly, it was never heard in the Senate.
REGISTERED SUPPORT / OPPOSITION :
Support
California District Attorneys Association
San Bernardino County Sheriffs Department
Opposition
Consumer Attorneys of California
Association of California Insurance Companies (unless amended,
prior version)
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Analysis Prepared by : Paul Riches / INS. / (916) 319-2086