BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  SB 1212
                                                                  Page  1

          Date of Hearing:   August 8, 2012

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                  SB 1212 (Calderon) - As Amended:  August 6, 2012 

          Policy Committee:                              InsuranceVote:11 
          - 0 

          Urgency:     No                   State Mandated Local Program: 
          No     Reimbursable:              

           SUMMARY  

          This bill adds renewal notices for automobile, property, 
          commercial, and certain types of liability insurance to the 
          types of notices that insurers are allowed to provide 
          electronically. Specifically, this bill: 

          1)Authorizes an insurer to comply with statutorily required 
            renewal notices for private passenger automobile, homeowners' 
            and other property and liability insurance by means of 
            electronic communication, if the policyholder agrees to this 
            electronic communication.

          2)Provides that, notwithstanding certain restrictions in law, 
            any provision of law in the Insurance Code that specifically 
            authorizes use of electronic communication shall govern over 
            the general provisions.

           FISCAL EFFECT  

          The California Department of Insurance (CDI) believes this 
          legislation will result in an increase in consumer complaints 
          related to renewals and coverage issues due to electronic 
          renewal notices not being received. CDI estimates that costs 
          associated with that workload would be approximately $170,000 
          per year (Insurance Fund).

           COMMENTS 

           1)Purpose  . According to the author and the sponsor, the Personal 
            Insurance Federation of California, policyholders are 
            demanding that insurers move toward paperless transactions, 








                                                                  SB 1212
                                                                  Page  2

            and frequently react negatively when the insurer responds that 
            it is not authorized by law to provide certain documents or 
            notices in an electronic format.  According to proponents, the 
            documents authorized for electronic transmission by this bill 
            are less sensitive than many documents already eligible for 
            delivery electronically, such as billing statements, notices 
            of discounts, and privacy notices. 

           2)Opposition  . The California Department of Insurance has an 
            oppose unless amended position on this bill. The department 
            notes that SB 1212 fails to provide appropriate safeguards to 
            help ensure that consumers receive the electronic renewal 
            information, including conditional renewals, insurers are 
            sending.  Conditional renewals, which are provided in the case 
            of commercial insurance, involve reduced policy coverage 
            limits, coverage elimination, increased deductibles and 
            significant increases in rates.  
           Analysis Prepared by  :    Julie Salley-Gray / APPR. / (916) 
          319-2081