Automobile Insurance
Health Insurance
Earthquake Insurance
Miscellaneous
Automobile Insurance SB 49 (Lockyer-D) - Vehicle Insurance Sets forth legislative findings and declarations relative to the need for reforms to prevent insurance fraud, make vehicle insurance coverage more affordable, reduce vehicle accident claim litigation, and enhance vehicle safety. Chapter 1109, Statutes of 1996 Similar legislation was AB 607 (Brulte-R), which died in the Senate Insurance Committee; AB 1242 (Bordonaro-R), which died in the Senate Judiciary Committee; AB 1752 (Knowles-R), which died in the Senate Judiciary Committee; and AB 3216 (Brulte-R), which died on the Senate Inactive File. SB 350 (Peace-D) - Auto Insurance Fraud Allows the Department of Insurance, the California Highway Patrol and local district attorneys to use up to 25% of the auto insurance fraud assessment funds received for other types of insurance fraud discovered during the course of an auto insurance fraud investigation. (Failed passage on Senate Floor) SB 968 (Johnston-D) - Auto Insurance: Good Drivers Provides that an insurance agent must place a Proposition 103 "Good Driver" with the lowest price insurance company within a group of affiliated companies if the agent is appointed by any one of the companies within the group, as specified. (Died in Assembly Insurance Committee) SB 1129 (Killea-I) - No-Fault Insurance Establishes a system of no-fault automobile insurance requiring motorists to purchase a policy providing at least $15,000 in first- party benefits, and prohibits lawsuits for the recovery of non- economic damages for non-serious damages. Requires motorists to show proof of insurance at the time of vehicle registration. (Died in Senate Judiciary Committee due to a 29.10 problem) Similar legislation was SB 1229 (Killea-I), which failed passage in Senate Judiciary Committee. SB 1611 (Johnson-R) - Underinsured Motorist Coverage Provides for a 1-year notice requirement as a pre-condition for making an underinsured motorist claim. (Failed passage in Senate Judiciary Committee) SB 1694 (Dills-D) - Auto Insurance: Premium Reductions Requires insurance companies to reduce vehicle liability insurance premiums for persons who complete a driver improvement course. (Died in Senate Transportation Committee) SB 1807 (Rosenthal-D) - Auto Insurance Makes changes in the law involving agent licensing, fee sharing, premium refunds and disclosure with regard to insurance sold in connection with the sale of an automobile. (Died in Senate Insurance Committee) SB 2046* (Johnson-R) - Auto Insurance Rates Provides that insurers may use specified rating factors in determining auto insurance rates and premiums, so long as the resulting rates are not excessive, inadequate or unfairly discriminatory. (Failed passage on Assembly Floor) Similar legislation was SB 1433* (Peace-D), which died in Senate Judiciary Committee, and AB 341* (Knowles-R), which failed passage on the Assembly Floor. AB 650 (Speier-D) - Financial Responsibility Requires, beginning on January 1, 1997, every application for the renewal of registration of a vehicle to be accompanied by proof of compliance with the state's financial responsibility laws. Requires a driver to show proof of financial responsibility upon the demand of a peace officer; authorizes the court impoundment of vehicles driven by persons without proof of financial responsibility or who provide false evidence of same, as specified; and establishes fines, community service requirements, driver's license suspensions and related penalties for failure to comply with such provisions. Double-joined with SB 49 (Lockyer-D). Chapter 1126, Statutes of 1996 AB 1083 (Archie-Hudson-D) - Insurance: Unfair Practices Requires auto insurers to act in good faith toward, and deal fairly with, current and prospective policyholders and other persons intended to be protected by any policy of motor vehicle insurance. (Died in Assembly Insurance Committee) AB 1301 (K. Murray-D) - Financial Responsibility Allows peace officers issuing notices to appear for other specified traffic violations to require the cited driver to provide defined evidence of financial responsibility, as specified. Prescribes special penalties for a failure to produce proof or knowingly providing false evidence of financial responsibility. Requires dismissal of charges for a person who later shows evidence of financial responsibility to the court clerk. (Died in Assembly Insurance Committee) AB 2924 (Boland-R) - Proof of Financial Responsibility Empowers peace officers to demand proof of insurance from motorists when conducting an otherwise lawful vehicle stop, and allows the imposition of fines for failure to provide the proof. (Died in Senate Judiciary Committee) AB 3313 (Brewer-R) - Insurance: Assigned Risk Plans Clarifies that coverage for enrollees in the California Automobile Assigned Risk Program becomes effective when the application is electronically transmitted to the plan's manager. Chapter 350, Statutes of 1996 Health Insurance SB 38* (Lockyer-D) - Omnibus Tax Bill Among other provisions, provides for the following health insurance provisions: (1) conforms with federal changes in the income tax law concerning medical expenses deductions, treating long-term care insurance costs and long-term care expenses as a medical expense; and (2) conforms with federal law allowing small employers and self-employed individuals to create medical savings accounts. Chapter 954, Statutes of 1996 A similar bill on medical savings accounts was AB 1758 (Knowles- R), which died in the Senate Appropriations Committee. SB 371 (Rosenthal-D) - Small Employer Health Insurance Extends California's small employer health insurance reforms (which currently apply to groups with 3 to 50 employees) to groups of 2 to 50. Applies on and after July 1, 1997. Chapter 360, Statutes of 1996 Similar legislation is AB 8 (Friedman-D), which became Chapter 359, Statutes of 1996. SB 381 (Petris-D) - Insurance: Severe Mental Illness Authorizes a pilot program under which state or other public employee volunteers have state health benefits restructured so that coverage for severe mental illness is the same as for other major medical conditions of the brain. Specifies that any added cost for the coverage should be paid through an increase in employee contributions, adjustment in the benefit package, or absorbed by the participating health plans. Requires the Public Employees' Retirement System to compare the relative cost of coverage under this pilot with the cost of conventional coverage. (Died in Assembly Public Employees, Retirement and Social Security Committee) SB 484 (Lewis-R) - Health Care Service Plans: Medical Savings Account Permits a health care service plan to offer a high-deductible plan contract in conjunction with a medical savings account, as specified. (Died on Assembly Floor) A similar bill, AB 1755 (Knowles-R), also died on the Assembly Floor. SB 579 (Leonard-R) - Health Coverage Requires health insurance plans and insurers that provide maternity coverage to cover in-patient and certain other care for the mother and newborn after childbirth, the length of time which is to be determined by the treating physician. (Failed passage on Assembly Floor) SB 607 (Ayala-D) - Health Insurance: Diabetes Requires health insurers to cover management and treatment of diabetes, including coverage of comprehensive treatment supplies. (Died in Senate Appropriations Committee) SB 661 (Maddy-R) - Health Insurance Authorizes the Managed Risk Medical Insurance Board (MRMIB) to adjust premiums so that subscribers in the Major Risk Medical Insurance Program would pay additional subsidy amounts above the average program subsidy. Authorizes MRMIB to increase maximum co-payments and deductibles to enable them to provide coverage to additional subscribers. Chapter 792, Statutes of 1996 SB 686 (Thompson-D) - Health Care Coverage: Immunizations Requires health plans and insurers to cover immunizations for children consistent with the most current version of the Recommended Childhood Immunization Schedule of the United States. Chapter 556, Statutes of 1996 SB 705 (Peace-D) - Health Care Service Plans: Regulation Places responsibility for administration and enforcement of the Knox-Keene Health Care Service Plan Act of 1975 with the Insurance Commissioner, rather than the Department of Corporations. (Sent to interim study) SB 789 (Rosenthal-D) - Health Insurance: Stop-Loss Coverage Adopts conditions under which stop-loss insurance sold with low attachment points must be regulated as health insurance and not loss insurance. (Died in Assembly Health Committee) SB 849* (Maddy-R) - Health Insurance Clarifies the schedule for phasing in the small group health insurance risk adjustment rating factor that becomes effective July 1, 1996. Requires the California Major Risk Medical Insurance Board to provide coverage through participating health plans. Permits the board to contract for the processing of applications, the enrollment of subscribers, and activities necessary to administer this program. Chapter 50, Statutes of 1996 SB 1211 (Hughes-D) - Health Coverage: Continuation Requires health care service plan contracts and every group policy of insurance providing coverage under an employer-sponsored plan of 3 to 19 employees to offer continued coverage to individuals formerly belonging to an eligible class, subject to certain specified requirements and restrictions. (Died in Assembly Health Committee) SB 1478 (Solis-D) - Health Care Service Plans Extends the requirement that health care service plans reimburse any uncontested portion of any claim to medical groups and independent practice associations no later than 30 working days after receipt of the claim by the plan. Double-joined with SB 1665 (Thompson-D). Chapter 711, Statutes of 1996 SB 1514 (Killea-I) - Health Care Service Plans: Disclosure Forms Requires the disclosure form regarding benefits, services and terms of the plan contract to contain a notice on the first page that conforms with enumerated conditions. (Died in Senate Rules Committee) SB 1547 (Peace-D) - Health Insurance: Disclosure of Substituted Care Revises disclosure requirements for health care service plans and disability insurers to fully disclose to enrollees, subscribers and insured persons coverage for substitute care, transitional in- patient care or care provided in skilled nursing facilities, as specified. Chapter 1024, Statutes of 1996 SB 1559 (Peace-D) - Health Insurance Enacts the Private Health Care Voluntary Purchasing Alliance Act. Establishes a structure under which the Insurance Commissioner would regulate these alliances. Chapter 916, Statutes of 1996 SB 1578 (Marks-D) - Health Insurance: Pharmacy Benefits Requires health plans and health insurers that impose limitations on the supply of prescription drug benefits to impose such supply limitations uniformly on all pharmacies authorized to provide prescription drug benefits. (Died in Senate Insurance Committee) SB 1581 (Rosenthal-D) - Health Insurance Requires that for every plan contract that provides supplements to Medicare benefits, a plan is to include a specified notice concerning the availability of counseling by the Health Insurance Counseling and Advocacy Program. Chapter 1113, Statutes of 1996 SB 1596 (Kopp-I) - Health Care Coverage: Pharmacists Allows health care plans and health insurers to pay for or reimburse the cost of services provided by pharmacists. Chapter 527, Statutes of 1996 SB 1660 (Rosenthal-D) - Health Care Service Plans Enacts various reforms to make contractual binding arbitration procedures and proceedings for the resolution of disputes arising out of a health care service plan more fair and cost-efficient for consumers. Chapter 1093, Statutes of 1996 SB 1665 (Thompson-D) - Telemedicine Enacts the Telemedicine Development Act of 1996, setting standards for the use of telemedicine by health care practitioners and insurers, as specified. Chapter 864, Statutes of 1996 SB 1670 (Rosenthal-D) - Health Care Service Plans: Records Requires medical records of enrollees and peer review records to be made available to the Corporations Commissioner, and allows the commissioner to levy penalties on health care service plans. (Sent to interim study) SB 1721 (Killea-I) - Disability Insurance Policies Extends the January 1, 1997 sunset date, until January 1, 2001, on the exemption from certain regulatory requirements for those disability insurance policies that are sold through direct response (mail), to people age 65 and over. Chapter 678, Statutes of 1996 SB 1732 (Rosenthal-D) - Health Care Service Plans: Reporting Requires the Department of Corporations to release a composite report for each health care service plan and to place the report on the Internet. Vetoed by the Governor SB 1740 (Johnston-D) - Health Insurance Dissemination: Genetic Characteristics Extends provisions prohibiting the use of genetic information for insurance purposes to multiple employer welfare arrangements, prohibits health insurance entities from seeking information about genetic characteristics for non-therapeutic purposes, and revises the definition of genetic characteristics. Changes the deadline for self-funded or partially self-funded multiple employer welfare arrangements to file applications for a certificate of compliance. Chapter 532, Statutes of 1996 SB 1798 (Killea-I) - Health Care Service Plans: Nonphysician Providers Permits medical groups and independent practice associations, contracting with health plans, to contract with licensed "nonphysician" providers; permits the nonphysician providers to bill the health plan directly for services; and permits these providers to be listed in plan directories. Chapter 533, Statutes of 1996 SB 1805 (Rosenthal-D) - Health Care Service Plans Makes violations of existing law protecting health care practitioners, physicians or surgeons who advocate for appropriate health care on a patient's behalf subject to the criminal sentences provided by the Knox-Keene Health Care Service Plan Act of 1975. Makes violations of the Insurance Code concerning provisions of AB 3013 (Alby-R) gag clauses in providers' contracts. Chapter 1094, Statutes of 1996 SB 1866 (Senate Insurance Committee) - Nonprofit Hospital Service Plans Deletes the chapter of the Insurance Code regulating nonprofit hospital service plans since no plans currently exist in this state. Chapter 484, Statutes of 1996 SB 1875 (Maddy-R) - Health Care Service Plans: Appeals Requires that health maintenance organizations report summary information on the disposition of grievances or complaints, categorizing the information by whether the subscriber is covered under Medicare, Medi-Cal, or through private coverage, as specified. Chapter 534, Statutes of 1996 SB 1936 (Rosenthal-D) - Health Care Service Plans: Ombudsman Requires the Department of Corporations to designate an ombudsman within the department to perform duties as specified by the Commissioner of Corporations. Chapter 1095, Statutes of 1996 SB 2012 (Killea-I) - Health Care Service Plans: Disclosure Forms Requires health care service plans' disclosure forms to contain specific information about benefits and exclusions, and the terms and conditions of coverage. (Failed passage in Assembly Appropriations Committee) SB 2043* (Rosenthal-D) - Health Care Coverage: Medicare Supplemental Coverage Allows for an annual open enrollment period for people with Medicare supplemental coverage. Extends the expiration date of benefits covered under a Consolidated Omnibus Budget Reconciliation Act policy. Adds provisions of SB 2044 (Rosenthal), which was vetoed by the Governor, conforming California law to new federal requirements for Medicare supplemental health insurance coverage. Does not contain the veto issue relating to premiums that could be charged for pre-standardized policies. Chapter 1118, Statutes of 1996 SB 2044* (Senate Insurance Committee) - Health Insurance: Medicare Conforms California law regulating Medicare supplemental health insurance (Medigap policies) to the newly-revised standards developed by the National Association of Insurance Commissioners. Vetoed by the Governor - Non-veto items placed into SB 2043* (Rosenthal). SB 2061 (Johnson-R) - Health Care Service Plans Limits the Department of Corporation's authority to investigate health maintenance organizations (HMOs) and, in particular, restricts the Department of Corporations' access to confidential medical and peer review records maintained by HMOs. (Sent to interim study) AB 505 (Villaraigosa-D) - Changes in Health Care Requires hospitals and providers of health care service plans to disclose to the public and the applicable administering state agency any plan to restructure the delivery of health care. (Died in Assembly Health Committee) AB 810 (Allen-R) - Health Insurance: Community Colleges Establishes the Part-Time Community College Faculty Health Insurance Program, which allows a district to provide health insurance for part-time faculty, as specified. (Died in Assembly Appropriations Committee) AB 1136 (Brown-D) - Health Care Service Plans: Drug Substitutes Provides for the future regulation of pharmaceutical benefits provided by specialized health care service plans, and adopts disclosure requirements in cases where pharmacists receive financial incentives for switching prescribed drugs. (Died in Conference Committee) AB 1183 (Isenberg-D) - Health Care Service Plans Requires the Corporations Commissioner to create a public, nonprofit health foundation to receive the assets of any nonprofit health care service plan that has converted to for-profit status or restructured organizationally. (Died in Senate Rules Committee) AB 1360 (Knowles-R) - Health Insurance: Small Employers Authorizes a health care service plan or carrier to enter into contractual agreements with qualified associations under which the associations or their third-party administrators may assume responsibility for performing specified administrative services, subject to various restrictions. Sunsets January 1, 2003. Chapter 641, Statutes of 1996 AB 1436 (Burton-D) - Health Coverage: First Responder Services Requires all health care plans and disability insurance policies to contain a provision requiring reimbursement for initial stabilizing medical (responder) services, and places a cap on this reimbursement. Vetoed by the Governor AB 1469 (Lee-D) - Health Coverage: Minority Communities States legislative intent that any comprehensive health insurance program adopted by California address the health concerns of ethnic minority communities, as specified. (Died in Assembly Health Committee) AB 1663 (Friedman-D) - Health Insurance: Experimental Services Enacts the Friedman-Knowles Experimental Treatment Act of 1996. Requires health maintenance organizations and health insurers to establish an external, independent review process to examine the plan's coverage decisions for individual enrollees with terminal conditions for which standard therapies have not been effective, as specified. Chapter 979, Statutes of 1996 AB 1759* (Knowles-R) - Income Taxes: Health Insurance Premiums Provides for a maximum tax credit of $250 for self-employed individuals who purchase a health insurance policy during the taxable year, as specified. (Failed passage in Senate Revenue and Taxation Committee) AB 1805 (Friedman-D) - Primary Care Case Management Plans Requires the Department of Corporations to review Department of Health Services' medical audits of primary care case management plans and to hold a public hearing prior to issuing a license authorizing a plan to operate as a health care service plan. (Died on Senate Third Reading File) AB 1823 (Escutia-D) - Health Care Service Plans Allows health care service plans to make additional voluntary payments of 25 cents for each enrollee for the purpose of providing medical education loan repayment assistance. (Died in Assembly Health Committee) AB 1829 (Martinez-D) - Health Care Service Plans: Study Requires the Department of Corporations to study and report to the Legislature regarding the number of full service health care service plans that are accredited by the National Committee on Quality Assurance. (Died in Assembly Health Committee) AB 1841 (Figueroa-D) - Health Coverage: Maternity Benefits Requires every health care service plan contract, nonprofit hospital service plan contract, and certain disability insurance policies issued, amended, delivered or renewed on and after January 1, 1997 that provides maternity coverage to include coverage for in-patient care and certain other care, the length of which is to be determined by the treating physician for the mother and the newborn after childbirth, subject to certain requirements and exceptions. (Died in Assembly Health Committee being subjected to Assembly Rule 77.2) Similar legislation was AB 1978 (Figueroa-D), which died in Assembly Health Committee. A clean-up measure to AB 1941 was to be AB 1839 (Figueroa-D), which died on the Senate Inactive File. AB 1922 (McPherson-R) - Health Care Service Plans Requires the Corporations Commissioner to adopt regulations establishing a uniform credentialing application for use by plans, independent practice associations, medical groups and individual providers. (Died in Assembly Health Committee) AB 1959 (Friedman-D) - Health Care Service Plans Requires the Corporations Commissioner to conduct and publish an annual survey of plans, rating them from best to worst based on certain criteria. (Died in Assembly Health Committee) AB 1960 (Friedman-D) - Health Care: Pregnant Women; Children Enacts the California Family Health Care Plan Act requiring the Department of Health Services to establish a comprehensive program to provide perinatal services to pregnant women, and child health care to children 18 years of age or under, for all women and children who are ineligible for the Medi-Cal program and who do not have health insurance coverage for all the services provided for under the bill. (Died in Assembly Health Committee) AB 1967 (Friedman-D) - Health Insurance: Experimental Procedures Requires health care service plans and insurers to offer an independent medical expert review of a decision to deny coverage for an experimental treatment. (Died in Assembly Health Committee) AB 2067 (Friedman-D) - Health Care Providers: Retaliation Prohibits health care and insurance providers from sanctioning health care practitioners who advocate on behalf of enrollees. (Failed passage in Assembly Insurance Committee) AB 2138 (Campbell-D) - Health Care Service Plans: Financial Statements Extends, by 60 days, the annual deadline for public entity health plans to submit financial audits to the Corporations Commissioner. Chapter 139, Statutes of 1996 AB 2343 (Richter-R) - Health Care Service Plans: Task Force Requires the Governor to convene a task force on health care services plans to research and report on specified subjects concerning health care service plans, by January 1, 1998. Chapter 815, Statutes of 1996 AB 2390 (Escutia-D) - Health Insurance: Second Opinions Requires health plans and insurers to provide for a second medical opinion, as specified. (Failed passage in Assembly Health Committee) AB 2649 (Thompson-D) - Health Care Service Plans: Provider Incentives Prohibits health care service plans contracts from containing incentive plans that act as an inducement to deny, reduce, limit or delay specific medically necessary and appropriate services covered under the contract. Double-joined with SB 1547 (Peace- D). Chapter 1014, Statutes of 1996 Similar legislation was SB 1064 (Lewis-R) andAB 2192 (Figueroa- D), both of which died in the Assembly Health Committee. AB 2668 (Figueroa-D) - Health Care Service Plans Requires every full-service health care service plan to file certain revenue and expense information annually with the Corporations Commissioner, under penalty of perjury. Requires the information to be available to the public and on the Internet. (Failed passage in Assembly Insurance Committee) AB 2780 (Speier-D) - Health Care Coverage: Contraceptive Drugs Requires health care service plans, nonprofit hospital service plan contracts, and certain disability insurance policies to provide coverage for a variety of contraceptives. (Failed passage in Assembly Insurance Committee) AB 3013 (Alby-R) - Health Care Providers: Patient Advice: Gag Clauses Prohibits health plans or their contracting entities from including provisions in their contracts that interfere with the ability of health care providers to communicate with their patients regarding their health care, as specified. Chapter 1089, Statutes of 1996 Similar legislation was AB 3226 (Gallegos-D), which failed passage in the Assembly Health Committee. AB 3071 (Granlund-R) - Health Care Service Plans: Arbitration Raises the amount in controversy cap from $50,000 to $200,000 for the use of a single neutral arbitration in binding arbitration of disputes with health care providers. (Died in Senate Judiciary Committee) AB 3139 (Brown-D) - Health Coverage: Pharmaceutical Benefit Management Companies Requires health care service plans to disclose their drug switching program to enrollees. (Failed passage in Assembly Health Committee) AB 3142 (Granlund-R) - Health Coverage: Preexisting Conditions Exempts from limitations on the use of preexisting condition exclusions, specified disease policies or certificate of hospital confinement indemnity health insurance policies. Provides that rejection for policies or certificates of specified diseases or policies or certificates of hospital confinement is not to be used to determine eligibility for the Major Risk Medical Insurance Program. Chapter 544, Statutes of 1996 AB 3143 (Granlund-R) - Multiple Employer Welfare Arrangements (MEWAs) Requires Multiple Employer Welfare Arrangements (MEWAs) to annually submit their financial statements, and requires the Insurance Commission to consider additional factors when determining the MEWAs' qualifications. (Died in Senate Insurance Committee) AB 3251 (Gallegos-D) - Health Care Service Plans: Independent Medical Opinions Requires health plans to file with their regulations a written policy describing how a plan determines if a second medical opinion is medically necessary and appropriate. Chapter 1091, Statutes of 1996 AB 3340 (Knowles-R) - Medical Malpractice Insurance Prohibits health plans and insurers from requiring or offering any inducement to a provider of medical services to obtain liability insurance for the professional malpractice of health care providers unless it is provided by specified insurers. (Failed passage in Assembly Insurance Committee) AB 3417 (Friedman-D) - Health Care Coverage: Preexisting Conditions Prohibits health care service plan contracts and health benefit plans from imposing any other waiting periods other than those regulated pursuant to law. (Died in Assembly Insurance Committee) AB 3424 (Gallegos-D) - Health Care Enacts the Health Care Consumer Protection Act of 1996, to require a health maintenance organization or disability insurer to disclose in a separate document its grievance procedures, disclose loss ratio data and report complaint data to its regulator. (Failed passage in Assembly Insurance Committee) AB 3437* (Bowen-D) - Income Tax: Medical Care Increases the tax deduction allowed under the income tax to 100% of the amount paid or insured by a self-employed individual for insurance which constitutes medical care for the taxpayer and the taxpayer's spouse and dependents. (Failed passage in Assembly Revenue and Taxation Committee) AB 3454 (Friedman-D) - Health Care Service Plans: Grievances and Complaints Requires the Corporations Commissioner to establish and maintain a separate listing of grievances or complaints referred to another governmental agency, including a general description of each grievance or complaint that is referred. (Failed passage in Assembly Insurance Committee) NOTE: There are 2 initiatives on the November 1996 ballot concerning managed care and health care plans; Proposition 214, the Health Care Patient Protection Act of 1996, and Proposition 216, the Patient Protection Act. Earthquake Insurance One of the major issues which was resolved in 1996 was making operational the California Earthquake Authority, which was put into place by AB 313 of 1995. The major pieces of legislation in the package are: SB 1993* (Calderon-D) - California Earthquake Authority Requires a specified disclosure to be provided to an insured of earthquake coverage as provided by a policy issued by the California Earthquake Authority (CEA). States CEA is to become operational and may issue policies of basic residential earthquake as soon as the Insurance Commissioner has certified that (1) the Internal Revenue Service has determined CEA to be exempt from federal taxation, (2) 70% of insurers have joined CEA, and (3) CEA has obtained at least 200% in reinsurance of the total capital contribution committed. Increases the amount of additional living expenses that can be paid out by a policy. Specifies that CEA is to have the same duties to its insureds that a private insurer currently has to its insureds. Clarifies that all of CEA rates be established in accordance with Proposition 103. Specifies that CEA is subject to the Political Reform Act of 1974. Declares CEA to be a public instrumentality of the state. Maintains the basic $10.5 billion financial structure of AB 13, but increases the time period and the amount of insurer liability for payment of losses associated with claims made by CEA. Increases the dollar amount of recapitalization that is provided for in the event CEA is to pay claims for an earthquake and is in need of being recapitalized. Policyholders cannot be assessed to recapitalize CEA. Provides for CEA to issue loss assessment policies for individual condominium units. Provides that if legislation is enacted that causes CEA to cease operations while debt of the Authority is outstanding, participating insurers would be required to impose a premium surcharge on earthquake policies to be used by CEA to repay debt. Provides for a $1.3 million loan to the CEA from the California Residential Earthquake Recovery Fund, to be repaid with interest. Chapter 967, Statutes of 1996 AB 2086* (Knowles-R) - California Earthquake Authority Enacts the Homeowner's Insurance Availability Act of 1996, or the Knowles Act. Revises the membership of the authority's advisory panel and, in general, provides for its appointment by the Governor, rather than the Insurance Commissioner; and provides for 4-year terms. Provides that there shall be a limited civil immunity on account of any act performed or omitted or obligation entered into on the part of the authority's governing board, advisory panel, or any member of either. Also revises conflict-of-interest provisions relating to the authority. Provides for claims against the authority and indemnification by the authority of participating insurers, as specified. Revises provisions relating to initial operating capital to permit certain small insurers to make installment payments and to provide for associate participating insurers. Revises provisions relating to revenue bonds and to insurer assessments. Chapter 968, Statutes of 1996 AB 3232 (Knowles-R) - California Earthquake Authority Maintains the $3 billion contingent assessment liability of insurers participating in the California Earthquake Authority (CEA) for a fixed period of 12 years without any "roll-off" or "roll- up" of that contingent liability. Establishes criteria for the consideration of scientific information assessing the frequency or severity of risk of earthquake in setting insurance rates or in arriving at the modeling assumption upon which those rates are based; as specified. Requires the CEA to charge equivalent rates for equivalent risk. Requires policyholders to be advised of their right to non-renew a CEA policy when CEA policy has been surcharged with a policy premium, and that the non-renewal will not affect the policyholder's homeowners' insurance. Requires the CEA to stop selling new policies 180 days after Fannie Mae and Freddie Mac implement policy to require earthquake insurance. Chapter 969, Statutes of 1996 Other Earthquake Insurance Legislation SB 58 (Lewis-R) - Earthquake Insurance: Availability Repeals the mandate to offer earthquake insurance for residential property. Reinstates the mandate in the future if the Insurance Commissioner certifies that a federal program has been implemented. Specifies the reasons an insurer may choose to not renew a policy. (Died in Conference Committee) SB 266 (Rosenthal-D) - Earthquake Insurance Allows insurers to offer, within the existing statutory mandate earthquake insurance, a reduced coverage earthquake insurance policy. (Died in Conference Committee) SB 424 (Marks-D) - Earthquake Insurance Specifies that earthquake policy insurers are mandated to offer coverage against the risk of loss or damage from the peril of earthquake on the primary dwelling, excluding appurtenant structures and allows the California FAIR Plan Association to provide earthquake property insurance coverage in conjunction with the issuance of a policy of basic residential property insurance, as specified. (Died in Conference Committee) SB 464 (Rosenthal-D) - Earthquake Insurance: Canceling or Nonrenewing Prevents residential property insurers from canceling or nonrenewing more than 5% of their policies in any 1 year, and places additional restrictions on nonrenewals and cancellations in the event of an emergency declaration by the Governor or the President of the United States. Allows the Insurance Commissioner to require an insurer to file a plan for nonrenewals. (Failed passage in Assembly Insurance Committee) SB 1114 (Hayden-D) - Earthquake Insurance: FAIR Plan Allows the California FAIR Plan to issue a stand-alone earthquake insurance policy in satisfaction of an insurer's obligation to offer earthquake insurance. (Died in Senate Insurance Committee) SB 1327* (Johnston-D) - Insurance Inspection Prohibits any person from adopting, publishing, or using a geographically-based earthquake assessment system or program for the purpose of requiring earthquake insurance systems or programs, or imposing a fee or other conditions in lieu of earthquake insurance, in connection with a loan secured by a condominium project or an individual unit of a condominium project unless the analytical methods and assumptions of the risk assessment have been approved by the Insurance Commissioner. Requires the commissioner, in determining whether to approve a submission, to consult with and consider the input of the State Geologist. Allows the Department of Insurance to defray the actual cost of reviewing earthquake risk assessment methods. Requires any costs incurred by the State Geologist or Department of Conservation to be reimbursed by the Department of Insurance. Chapter 54, Statutes of 1996 SB 1623 (Rosenthal-D) - Earthquake Insurance Establishes a Natural Disaster Catastrophe Fund to provide reinsurance protection for insurers against high-end residential earthquake losses. (Died in Senate Insurance Committee) SB 1857 (Rosenthal-D) - Earthquake Insurance: Computer Models Provides that no admitted insurer may use a computer-assisted model in connection with residential property insurance for various earthquake insurance purposes unless the model has been approved by the Insurance Commissioner. (Died in Senate Insurance Committee) SB 1858 (Rosenthal-D) - FAIR Plan Prohibits the Insurance Commissioner from restricting access to, or placing limits on the growth of, the FAIR Plan, so long as it has 6% or less of the residential earthquake insurance market. (Failed passage in Assembly Insurance Committee) SB 2127 (Rogers-R) - Earthquake Insurance Deletes from the notice to consumers regarding an offer of earthquake insurance the reference to insurance agents' providing information regarding how the deductible applies to the policy. (Failed passage in Senate Insurance Committee) AB 1627 (K. Murray-D) - Earthquake Insurance: FAIR Plan Includes within the definition of "basic property insurance," stand-alone policies of basic residential property insurance, as specified. (Died in Senate Insurance Committee) AB 1754 (Knowles-R) - Earthquake Insurance Provides that a policy of residential property insurance that does not include any of the perils insured in a standard fire policy is not to be included in the definition of policy of residential property insurance for purposes of earthquake insurance. Chapter 807, Statutes of 1996 AB 3237 (Knowles-R) - Earthquake Insurance Coverage Repeals the requirement that insurers provide policyholders who have initially declined an offer of earthquake coverage with a written offer of earthquake coverage every other year following non-acceptance, and modifies the requirement that insurers notify these insureds prior to renewal that the residential policy does not provide earthquake coverage. (Died in Senate Insurance Committee) Miscellaneous SB 38*(Lockyer-D) - Omnibus Tax Bill Among other provisions, exempts from taxes imposed by the Bank and Corporation Tax Law an organization established pursuant to the Nonprofit Corporation Law, as specified, by 3 or more corporations as an arrangement for the pooling of self-insurance claims or losses of those corporations. Chapter 954, Statutes of 1996 A similar bill, SB 1934* (Mello-D), died in the Assembly Appropriations Committee. SB 268 (Rosenthal-D) - Insurance: Insolvency Allows the Insurance Commissioner to resolve long-standing claims against insolvent insurers through actuarial estimation, subject to approval by the court overseeing the liquidation. (Died in Assembly Health Committee) SB 272 (Russell-R) - Insurance: Agent Liability Provides that an insurance agent, broker, solicitor, life agent, fire and casualty licensee, life licensee, or surplus lines broker has no duty to investigate or determine the financial condition of an admitted insurer or an insurer that has been placed on the list of eligible surplus lines insurers by the Insurance Commissioner. (Died in Senate Judiciary Committee) SB 354 (Rogers-R) - Insurance Agents and Brokers Repeals the sunset on the current continuing education program for insurance agents and brokers. Extends, until January 1, 2001, those provisions that provide for state regulation of multiple employer welfare arrangements. Chapter 673, Statutes of 1996 SB 464 (Rosenthal-D) - Property Insurance Limits an insurer's ability to cancel or not renew a homeowner's policy if any claim that affects insurability due to an officially declared disaster is still pending and unresolved against the insurer, and prevents the homeowner from securing replacement coverage from another insurer, as specified. (Failed passage in Assembly Insurance Committee) SB 876 (Rosenthal-D) - Insurance Agents Provides for the registration with the Insurance Commissioner of any unlicensed insurance adjuster brought in to handle disaster- related insurance claims, and provides for restricted insurance adjuster licenses in circumstances where existing law would only allow denial or revocation of a license. Double-joined with AB 3351 (Weggeland-R). Chapter 707, Statutes of 1996 SB 879 (Senate Insurance Committee) - Insurance: Disaster Revenue Bonds Allows the Department of Insurance to issue revenue bonds at the request of the California Insurance Guarantee Association following a catastrophic disaster to help pay the claims of insolvent insurers, as specified. Chapter 793, Statutes of 1996 SB 925 (Costa-D) - Insurance: Lodge System: Death Benefits Increases the maximum permissible death benefit that can be offered a fraternal lodge to its members, from $1,000 to $5,000. Chapter 391, Statutes of 1996 SB 1021 (Johnston-D) - Surplus Line Brokers Provides that any surplus line broker who unlawfully places a policy with a nonadmitted insurer be subject to a civil administrative penalty of up to $20,000, as determined by the Insurance Commissioner. (Died in Assembly Insurance Committee) SB 1179 (Rosenthal-D) - Risk-Based Capital Applies risk-based capital statutory requirements, currently applicable only to life and health insurers, to property/casualty insurers as well. Chapter 708, Statutes of 1996 SB 1217 (Polanco-D) - Insurers: Community Development Investment Encourages admitted insurers to make community development investments designed to promote job creation, small business development or microenterprise development in low-income or very-low-income communities. Requires the Insurance Commissioner to compile information and to report concerning these investments by insurers. (Died on Senate Inactive File) Similar legislation is AB 1278 (McDonald-D), AB 1557 (Lee-D) and AB 1619 (Tucker-D), all of which died in the Assembly Insurance Committee. SB 1311 (Hughes-D) - Insurance Availability Study Creates an Insurance Availability Study Commission in the Department of Insurance to conduct research concerning the availability of insurance. (Died in Senate Rules Committee) SB 1323 (Senate Insurance Committee) - Home Protection Contracts Increases minimum net worth requirements and adjusts insolvency guidelines for home protection companies. (Died in Assembly Insurance Committee) SB 1485 (Lewis-R) - Insurance: Financial Statements Amends the California law regarding the allowance of credit for liabilities ceded to reinsurers to conform to National Association of Insurance Commissioners model regulations. Establishes an accreditation procedure for non-admitted insurers. Chapter 840, Statutes of 1996 SB 1496 (Johnson-R) - Insurers: Tender Officers Exempts specified transactions involving the acquisition or control of an insurer by an affiliated company from specified Department of Insurance filing and prior approval requirements. Chapter 311, Statutes of 1996 SB 1705 (Lewis-R) - Life Insurers Changes the distribution priority, in the event of insurer insolvency, by moving claims of the United States from Priority 4 to Priority 6, and by including within Priority 5 claims relating to modified guaranteed annuities. Chapter 167, Statutes of 1996 SB 1730 (Kopp-I) - Insurers: Non-Admitted Insurers Provides that before any non-admitted foreign or alien insurer doing business in California may appear, or file or cause to be filed any paper, document or pleading in any action, suit or proceeding to which it is party, that insurer shall procure a certification from the State Board of Equalization that it has performed, and is currently in compliance with, the board's insurance tax obligation. (Died in Senate Appropriations Committee) SB 1739* (Russell-R) - Mutual Insurers: Conversion Provides a new procedure to allow a mutual life insurance company to "de-mutualize." Chapter 406, Statutes of 1996 SB 1815 (Lewis-R) - Insurers: Investments Modifies some of the restrictions involved when California- domiciled insurers seek to make authorized foreign investments. Chapter 179, Statutes of 1996 SB 1858 (Rosenthal-D) - Insurance: FAIR Plan Requires the FAIR Plan to offer coverage anywhere in this state. (Failed passage in Assembly Insurance Committee) SB 1862* (Johnson-R) - Insurance Commissioner: Reports Deletes several statutory requirements for reports from insurers to the Insurance Commissioner and from the commissioner to the Legislature. Chapter 571, Statutes of 1996 SB 1863 (Johnson-R) - Mortgage Insurance Increases the cap on mortgage guaranty insurance coverage from a net of 25% of mortgage indebtedness up to 35%, in specified circumstances. Chapter 407, Statutes of 1996 SB 1906 (Johnston-D) - Insurance: Surplus Lines Provides that the Department of Insurance has the statutory authority to ensure that syndicates under Lloyd's of London maintain adequate trust fund agreements. Chapter 1034, Statutes of 1996 SB 1921 (O'Connell-D) - Insurance: Foreign Investments Exempts from the investment limits that apply to domestic insurers with admitted assets in excess of $500 million, a property and casualty insurer that has admitted assets in excess of $500 million, and foreign investments that do not exceed 4% of its total admitted assets. Chapter 127, Statutes of 1996 SB 2020 (Hurtt-R) - Insurance Tax Rates Reduces the insurance tax rate for "non-qualified" retirement annuities from 2.35% to 1/2%. (Died in Senate Revenue and Taxation Committee) Similar legislation was AB 2033* (Brulte-R), which failed passage in Senate Revenue and Taxation Committee. SB 2032 (Mountjoy-R) - Indemnity Provides that an additional insured endorsement in a contract with a public agency is invalid and unenforceable as to the agency's active negligence, as specified. Chapter 555, Statutes of 1996 SB 2047 (Leslie-R) - Insurance: Joint Powers Authority Permits joint powers authorities to purchase reinsurance to the same extent and in the same manner as insurance provided by an insurer. Chapter 181, Statutes of 1996 SB 2101 (Marks-D) - Property Insurance Prohibits an insurer from non-renewing a homeowner's policy on the basis of any physical condition relating to the property unless the insurer has provided the policyholder an opportunity to repair or cure the condition, as specified. (Failed passage in Assembly Insurance Committee) AB 293 (Hoge-R) - Life and Disability Insurance Revises the law deeming a life insurance policy received from 6 months after the insured has paid premiums to 6 months after the premiums have been paid. Makes clarifying and technical changes to the cancellation or surrender of insurance policies provisions, including the use of the word "surrender," instead of "cancellation," and clarification regarding the effective date of surrender. Chapter 686, Statutes of 1996 AB 328 (Knowles-R) - Insurance: Surplus Lines Relaxes the requirements that non-admitted insurers which are sued in California courts file a bond before filing an answer to the complaint. Sunsets January 1, 2000. Chapter 687, Statutes of 1996 AB 582* (Hoge-R) - Insurance Provides that insurers are not to agree with each other to violate the antitrust or unfair business practice laws. Clarifies the use of advisory manuals approved by the Insurance Commissioner. Chapter 1002, Statutes of 1996 AB 606 (Richter-R) - Insurance: Day Care Provides homeowners' associations with the power to require family day care homes located on their property to maintain and pay for liability insurance. Provides that the family day care home can be required to pay for coverage of the homeowners' association. (Failed passage in Senate Health and Human Services Committee) AB 859 (Campbell-D) - Insurance: Notice of Non-Renewal Provides that an insurer must attach a premium and loss history report for the preceding 3 years to the notice of non-renewal, for certain types of commercial insurance, and to the notice of workers' compensation policies. (Failed passage in Assembly Insurance Committee) AB 1276 (McDonald-D) - Financial Guaranty Insurance Provides for an association of surety insurers for the purpose of apportioning insurance coverage to contractors unable to obtain that insurance. (Died in Assembly Insurance Committee) AB 1308 (Cunneen-R) - Property Insurance Places a number of restrictions and requirements on the handling of claims for homeowner's insurance following a disaster and requirements on insurers at the time of sale of the insurance. (Died in Assembly Insurance Committee) AB 1746 (Hauser-D) - Insurance Rate Hearings Specifies that a rate change application is deemed approved 90 days, instead of 180 days, after the rate application is received, unless disapproval or extraordinary circumstances exist. Provides that an application rate change that results in a premium decrease is to be deemed approved in 45 days as specified. (Died in Senate Insurance Committee) A similar bill was AB 2535 (Miller-R), which failed passage on the Assembly Floor. AB 1754 (Knowles-R) - Insurance: FAIR Plan Prohibits rates for the FAIR Plan from being excessive, inadequate, or unfairly discriminatory. Requires the rates to be actuarially sound so that premiums are adequate to cover expected losses, expenses and taxes, and to reflect investment income of the plan. Specifies the factors that the FAIR Plan is to consider in adopting rates. Chapter 807, Statutes of 1996 AB 2177 (Miller-R) - Insurance: Limited Liability Companies Allows limited liability companies to be licensed agents, brokers or surplus line brokers, as specified. Chapter 883, Statutes of 1996 AB 2262 (Cunneen-R) - Insurance Agents and Brokers Provides that an obligation of an insurer to furnish any notice to its insured required by law may be carried out by an insurer's general agent provided, however, that an insurer's delegation of a notice obligation to a general agent is not to limit or negate the insurer's responsibility or liability if the general agent fails to provide the required notice. Chapter 237, Statutes of 1996 AB 2538 (Miller-R) - Insurance: Holding Companies Amends the California Insurance Holding Company Regulatory Act to conform with the National Association of Insurance Commissioners' Model Holding Company Act. Chapter 820, Statutes of 1996 AB 2692 (Mazzoni-D) - Insurance: Statements Expands the scope of investments which are specifically authorized to be held as deposits for security for certain reinsurance contracts. Chapter 524, Statutes of 1996 AB 2697 (Brewer-R) - California Insurance Guarantee Association Allows the California Insurance Guarantee Association to intervene as a party in legal proceedings related to the insolvency of a member insurer. Chapter 252, Statutes of 1996 AB 2869 (Brewer-R) - Insurance: Surplus Line Brokers Allows a surplus line broker to obtain prior authority from a nonadmitted insurer to represent it in California for purposes of issuing policies to insureds without first obtaining specific permission for the particular risk. Chapter 905, Statutes of 1996 AB 3137* (Miller-R) - Insurance: Escheat: Budget Trailer Bill Transfers Proposition 103 rebate escheat funds to the Insurance Fund in the amount necessary to repay principal and interest on a $14 million General Fund loan by June 30, 1998. States legislative intent that this transfer is not intended to constitute precedent for future diversion of escheated money. Limits the increase in examination of insurers fee revenue for the 1996-97 fiscal year to no more than $2 million above the amount estimated in the Governor's 1996-97 Budget. Chapter 187, Statutes of 1996 AB 3231 (Knowles-R) - Title Insurance Allows the creation of statistical advisory organizations to allow title insurers to compute industry-wide data. Allows these organizations to set and file rates on behalf of title insurers. (Sent to interim study) AB 3233 (Knowles-R) - Department of Insurance Support Establishes a 10% cap on fee increases which the Insurance Commissioner, absent legislative approval, may charge to insurers, agents and other licensees in order to fund the annual appropriation made by the Legislature to support the Department of Insurance. Becomes operative only if AB 3137 (Miller-R) is chaptered. Chapter 349, Statutes of 1996 AB 3234 (Knowles-R) - Life Insurance Provides, effective July 1, 1997, for the regulation of life insurance policy illustrations by the Insurance Commissioner. Defines "illustration" as a presentation or depiction that includes no guaranteed elements of a policy of life insurance over a period of years and that is one of 3 specifically defined types. Requires life insurers to provide prospective insureds with a buyer's guide. Sunsets January 1, 2000. Chapter 1106, Statutes of 1996 AB 3250 (Cunneen-R) - Insurance: Immunity Provides an immunity from liability for insurers which report suspected fraud to the Department of Insurance or to another insurer, where the insurer acts without malice. (Died in Senate Judiciary Committee) AB 3287 (Miller-R) - Insurance Policies: Small Claims Court Expands the jurisdiction of small claims courts to include subrogation actions under an insurance policy, as specified. (Died in Assembly Judiciary Committee)