Amended in Senate March 28, 2014

Senate Bill No. 1065

Introduced by Senator Monning

February 18, 2014

An act to amend begin delete Section 116 of end delete begin insert Sections 11629.85 and 13902 of, and to add Section 45.5 to, end insert the Insurance Code, relating to insurance.

LEGISLATIVE COUNSEL’S DIGEST

SB 1065, as amended, Monning. begin delete Insurance. end delete begin insert Insurance: reports: electronic submission. end insert

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Existing law provides for the regulation of insurers by the Department of Insurance. Existing law directs the Insurance Commissioner to enforce the execution of laws regulating the business of insurance. The existing Insurance Code requires various entities to submit certain reports to specified committees of the Legislature.

end insert begin insert

This bill would, except as specified, authorize reports required to be submitted to a committee of the Legislature pursuant to the Insurance Code to be submitted electronically, as specified. The bill would also make other technical, nonsubstantive changes.

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Under existing law, automobile insurance includes, among other things, a contract of warranty or guaranty that promises service, maintenance, parts replacement, repair, money, or other indemnity in the event of loss or damage to a motor vehicle. Automobile insurance also includes an agreement that promises repair or replacement of a motor vehicle, or part of a motor vehicle, after a mechanical or electrical breakdown at either no cost or a reduced cost to the agreementholder.

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This bill would make technical, nonsubstantive changes to those provisions.

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Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

end insert

begin insert Section 45.5 is added to the end insert begin insert Insurance Code end insert begin insert , to
read: end insert

begin insert

begin insert 45.5. end insert   

(a) A report required under this code to be submitted to
a committee of the Legislature may be submitted electronically in
any of the following ways:

(1) Providing the committee a digital copy of the report
delivered by electronic means to a person or account designated
to receive reports and in a form acceptable to the committee.

(2) Providing the committee a digital copy of the report stored
on permanent media delivered by first-class mail.

(3) Placing the report on the reporting entity’s Internet Web
site so that it is publicly available for a period of no less than three
years. If a report is submitted electronically in accordance with
this paragraph, the committee shall be provided notice of the report
that includes specific instructions on how to access the report and
how to request a hardcopy. The notice shall be delivered by
first-class mail or by electronic means, and addressed to the person
or account designated to receive reports and in a form acceptable
to the committee.

(b) This section shall not apply to reports required under
Sections 38.5, 10089.13, 10965.9, and 11885, of the Insurance
Code.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 11629.85 of the end insert begin insert Insurance Code end insert begin insert is amended
to read: end insert

11629.85.  

(a) On or before March 1 of each year, the
commissioner shall prepare and propose a plan to the Senate
Committee on begin delete Banking, Finance, and end delete Insurance and the Assembly
Committee on Insurance setting forth the methods the
commissioner intends to implement to inform households eligible
for the program about the availability of low-cost automobile
insurance. To be eligible for funding through the budget process,
the plan shall be reviewed by the Senate Committee on begin delete Banking,
Finance, and end delete Insurance and the Assembly Committee on Insurance.
The information required under subdivision (c) shall also be
provided to the Senate Committee on Transportation and Housing
and the Assembly Committee on Transportation.

(b) The plan shall include, at a minimum, a brief description of
methods proposed to be used, anticipated costs, sources of revenue,
goals, targets, objectives, and a justification of the proposed
methods. The plan shall also explain how the department proposes
to work in cooperation with the California Automobile Assigned
Risk Plan, the social service departments in eligible counties, the
Department of Motor Vehicles, and community-based
organizations in order to inform eligible households of the
existence of the program.

(c) The plan shall also include all of the following:

(1) The commissioner’s determination regarding whether the
program has been successful, based on the criteria specified in
subdivision (d), and an explanation regarding that success or lack
thereof.

(2) In cooperation with the California Automobile Assigned
Risk Plan, structural characteristics of the program that may require
statutory revision in order for the program to succeed or to improve
upon existing success.

(3) Impediments to success of the program that can reasonably
be overcome by revision to the strategies adopted by the
department.

(4) A detailed explanation of the department’s use for the
program of funds assessed pursuant to Section 1872.81.

(5) For the previous calendar year, a list of the total low-cost
auto premium for each county in which the program was available.

(d) The program is successful if the following occur:

(1) The program generated sufficient premiums to cover losses
incurred under policies issued under the program, and expenses
incurred by the program, as calculated pursuant to subdivision (c)
of Section 11629.72.

(2) The program served the public purpose of offering access
to automobile insurance to otherwise underserved communities in
the program areas.

(3) The program offered access to automobile insurance to
previously uninsured motorists seeking affordable coverage in the
program areas.

(4) The program’s outreach efforts lead uninsured motorists to
contact a producer, and the driver obtains any auto insurance policy
that complies with California law.

(e) Any written or oral advertisements, including, but not limited
to, paid or unpaid commercial or noncommercial advertising, by
the department with reference to the low-cost automobile insurance
program shall reference the department and shall not reference the
commissioner by name or office, or include the commissioner’s
voice, image, or likeness. The department shall not participate with
any nongovernmental entity that produces or intends to produce
advertisements or educational material that include the name of
the commissioner or his or her voice, image, or likeness, and that
are intended to make eligible households aware of the existence
of low-cost automobile insurance.

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begin insert SEC. 3. end insert   

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begin insert Section 13902 of the end insert begin insert Insurance Code end insert begin insert is amended to
read: end insert

13902.  

(a) Any insurance pool, established pursuant to this
division, may be organized as a nonprofit corporation, limited
liability company, partnership, or trust, whether organized under
the laws of this state or another state or operating in another state.

(b) Any insurance pool established pursuant to this division
shall have initial pooled resources of not less than two million five
hundred thousand dollars ($2,500,000) in the form of cash or cash
equivalents.

(c) Any insurance pool established pursuant to this division
shall maintain adequate reinsurance to protect against its risks.

(d) Any insurance pool established pursuant to this division
shall furnish a copy of the pool’s annual audited financial statement
and most recent actuarial review, by first-class mail or by any other
method of delivery, including electronic transmission, to the
Assembly Committee on Housing and Community Development,
the Assembly Committee on Insurance, the Senate Committee on
begin delete Banking, Finance, and end delete Insurance, and the Senate Committee on
Transportation and Housing within 180 days of the close of the
pool’s fiscal year. If, in the period of time since the last submittal
required by this subdivision, any of the following has occurred,
the transmittal letter accompanying the annual audited financial
statement and most recent actuarial review shall so indicate and
shall provide a brief description of each matter:

(1) There has been a change to the pool’s plan of financing,
management, or operation, including any material amendment to
any of those plans.

(2) A claims audit report has been filed with any regulatory
body with respect to the pool.

(3) A report of examination issued by any regulatory body with
respect to the pool has been received.

(4) There has been a material change in the scope of the
regulation of the pool by other states in which the pool operates.

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SECTION 1.  

Section 116 of the Insurance Code is amended
to read:

116.  

(a) Automobile insurance includes insurance of
automobile owners, users, dealers, or others having insurable
interests therein, against hazards incident to ownership,
maintenance, operation, and use of automobiles, other than loss
resulting from accident or physical injury, fatal or nonfatal, to, or
death of, any natural person.

(b) Automobile insurance also includes a contract of warranty
or guaranty that promises service, maintenance, parts replacement,
repair, money, or any other indemnity in event of loss of or damage
to a motor vehicle or a trailer, as defined by Section 630 of the
Vehicle Code, or any part thereof from any cause, including loss
of or damage to or loss of use of the motor vehicle or trailer by
reason of depreciation, deterioration, wear and tear, use,
obsolescence, or breakage if made by a warrantor or guarantor
who is doing an insurance business.

(c) Automobile insurance also includes an agreement that
promises repair or replacement of a motor vehicle, or part thereof,
after a mechanical or electrical breakdown, at either no cost or a
reduced cost for the agreement holder. However, automobile
insurance does not include a vehicle service contract subject to
Part 8 (commencing with Section 12800) of Division 2, or an
agreement deemed not to be insurance under that part.

(d) The doing or proposing to do business in substance
equivalent to the business described in this section in a manner
designed to evade the provisions of this section is the doing of an
insurance business.

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