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NAMIC 2006 Survey of New State Insurance Laws Summary and Analysis

2006 SUMMARY OF NEW STATE LAWS - CALIFORNIA

California State Legislative Website

BILL #

CHAPTER #

ISSUE

BILL DESCRIPTION

AB 881

38

Workers' compensation - contractor requirements

Requires the registrar of contractors remove the C-39 roofing classification from a license if the contractor fails to comply with the requirement to have on file a current and valid certificate of workers' compensation insurance or certification of self-insurance. Requires insurers who issued workers' compensation policies to contractors holding C-39 licenses to perform annual audits of these policyholders and to allow them to recoup the cost of these audits through a policy surcharge. Effective: Jan. 1, 2007.

AB 925

456

Corporate governance - investments

Relates to existing law that regulates the investments of insurers. Defines community investments and community development infrastructure investments. Imposes specified reporting requirements on participating insurers to the Department of Insurance. Requires the Commissioner of the department to provide certain information on these investments to the public. Requires insurers that did not comply with a specified voluntary community investment data call to provide that information. Effective: Feb. 28, 2007.

AB 1122

412

Motor vehicle insurance - salvage title

Authorizes an insurer that has paid a total loss settlement and is unable to obtain a certificate of ownership under certain circumstances to request DMW to issue a salvage certificate for the vehicle. Effective: Jan. 1, 2007.

AB 1302

713

State regulation

Requires an agency that is adopting an emergency regulation to send at least 5 working days prior to submission of an emergency regulation to the office a notice of proposed emergency action to every person who has filed a request for notice of regulatory action with the agency unless the emergency situation clearly poses such an immediate, serious harm that delaying action to allow public comment would be inconsistent with the public interest. It also extends the time period such regulation would be in effect. Effective: Jan. 1, 2006.

AB 1368

836

Workers' compensation - benefits, claims or treatments

Relates to existing law that, in the case of public safety members, the term injury includes hernia, heart trouble, and pneumonia that developed or manifested itself during a period while the person is in that service and establishes a disputable presumption in this regard and prohibits these medical conditions from being attributed to any disease existing prior to the development or manifestation of that condition and a causation report thereof. Exempts certain public safety members therefrom. Effective: Sept. 30, 2006.

AB 1553

266

Tort reform - miscellaneous provisions

This bill tolls the time period for a party to demand or commence arbitration of a controversy pursuant to an arbitration agreement when the party commences a civil action in court based on that controversy. The tolling would operate from the date the civil action is commenced until 30 days after the court's final determination in the court filing, as specified. Effective: Jan. 1, 2007.

AB 1809

49

State regulation

This bill extends Insurance Fund support of the Seismic Safety Commission until July 1, 2009. Effective: June 30, 2006.

AB 1890

317

Property insurance

Increases from three years to five years the time frame within which a property owner may transfer the base-year value of property damaged or destroyed in a governor-declared disaster to a replacement property. This extension would apply to any property acquisition or replacement of a property damaged or destroyed by a disaster occurring on July 1, 2003 or thereafter, and to determinations of base-year values for the 2003-04 and subsequent fiscal years. Effective: Sept. 18, 2006.

AB 1909

345

Motor vehicle insurance - auto coverage issues

Provides that where 2 or more insurance policies apply to the same loss and one policy affords coverage to a named insured who in the course of his or her business rents or leases motor vehicles without operators, it is presumed that the policy to the named insured shall be excess to the other insurance policy, and that when one policy affords coverage to a trucker, that policy shall be primary for both power unit and trailer, and the insurance afforded by the other policy shall be excess. Effective: Jan. 1, 2007.

AB 1946

137

Property insurance

Amends existing law requiring residential property insurance policies are not effective unless the insured is provided a copy of the Residential Property Disclosure. Revises disclosure procedure. Provides the declarations page of residential property insurance that do not provide coverage for the structure of the insured premises need not contain statements regarding the limits of liability for that structure and specified information regarding cost estimates to rebuild the structure. Effective: Jan. 1, 2007.

AB 2068

819

Workers' compensation - benefits, claims or treatments

Amends provisions of the Workers' Compensation Law that provides an employee with the right to be treated by his or her personal physician, if the physician agrees to be predesignated. Provides that a personal physician includes a medical group that meets specified requirements. Limits the maximum percentage of employees that may be predesignated. Effective: Jan. 1, 2007.

AB 2087

115

Workers' compensation - self insurance

Requires the Administrative Director of the Division of Workers' Compensation to prepare an aggregated summary of all self-insured employers' liability to pay compensation reported on the self-insured employers' annual reports, including a separate summary for public and private employer self-insurers. Requires the summaries to be made available to the public on the Department of Industrial Relation's Internet Web site. Authorizes the director to make available specified related information. Effective: Jan. 1, 2007.

AB 2125

740

Workers' compensation - state oversight

Makes changes in the law regulating workers' compensation insurance. Revises provisions relating to the authority of the Insurance Commissioner to revoke or suspend the State Compensation Insurance Fund's authority to transact workers' compensation insurance. Provides that the commissioner may not revoke or suspend the fund's authority to transact workers compensation insurance. Exempts the fund from the requirement that a court issue an order vesting title to an insurer's assets in the commissioner. Effective: Jan. 1, 2007.

AB 2190

432

Motor vehicle insurance - traffic offenses

Makes reckless driving and engaging in a motor vehicle speed contest that proximately causes great bodily injury (GBI) to another person an alternate felony/misdemeanor. Effective: Jan. 1, 2007.

AB 2210

609

Motor vehicle insurance - towing issues

Expresses legislative findings regarding allowing local authorities to license and regulate tow truck companies and operators. Requires a property owner or lessee to include the name and telephone number of each towing company party to a written towing authorization with that person, and that the tow truck operator is to notify the registered owner of removal of a vehicle, grounds for the removal, and the place where the vehicle has been removed to. Requires immediate release of a vehicle not yet removed. Effective: Jan. 1, 2007.

AB 2239

352

Motor vehicle insurance - miscellaneous provisions

Amends the Sales and Use Tax Law. Provides that a presumption may be controverted by documentary evidence for a vehicle brought into this state for the exclusive purpose of warranty or repair service where the vehicle is in this state for that purpose for less than a certain amount of time. Requires the owner of a vehicle to make statements specifying the date of travel to and from the warranty or repair facility. Effective: Jan. 1, 2007.

AB 2291

353

Motor vehicle insurance - auto equipment issues

Prohibits a motor vehicle manufacturer, manufacturer branch, distributor, or distributor branch from accessing, modifying or extracting information from a confidential dealer computer record or using other specified means to prevent or interfere with the lawful efforts of a dealer to comply with data security and privacy laws. Prohibits a computer vender from the above-stated or personally identifiable information, without consent of the dealer, and maintaining certain safeguards. Effective: Jan. 1, 2007.

AB 2292

119

Workers' compensation - disputes and settlements

Specifies that death benefits shall be paid to surviving dependent, personal representatives, heir, or other person entitled to compensation under specified workers' compensation laws. Provides that certain requirements of existing law relating to paying the Department of Industrial Relations when an employee does not leave surviving any person entitled to a dependency death benefit, shall not be applicable if a benefit or accrued and unpaid compensation is paid to the estate of the deceased employee. Effective: Jan. 1, 2007.

AB 2387

590

Producer licensure - licensing requirements

Amends existing law which provides for the licensing of fire and casualty broker-agents, personal lines broker agents, and life agents and that an applicant for a fire and casualty broker-agent license who is licensed as a personal lines agent is required to complete a minimum of 20 hours of prelicensing classroom study. Deletes requirement that the 20 hours of prelicensing study be conducted in a classroom. Provides prelicensing courses not conducted in the classroom are subject to review and approval. Effective: Jan. 1, 2007.

AB 2400

321

Guaranty fund

Permits reinsurers to offset unpaid premium from an insolvent ceding carrier against the obligations of the reinsurers, and would make confidential the documents reviewed by the Department of Insurance (DOI) when conducting an examination of reinsurance intermediaries. Effective: Jan. 1, 2007.

AB 2407

129

Motor vehicle insurance - traffic safety

Allows a mature driver to renew safe-driving certificate by completing a driver-improvement course with 240 minutes of instruction rather than 400 minutes. Effective: Jan. 1, 2007.

AB 2455

150

Tort reform - construction defects

This bill, consistent with a recent increase in the small claims court jurisdictional limits from $5,000 to $7,500 for an action brought by a natural person, would provide that the small claims court would have jurisdiction in an action brought by a natural person against the Registrar of the Contractors State License Board as the defendant guarantor holding a contractor's cash deposit, if the amount of the demand does not exceed $7,500. Effective: Jan. 1, 2007.

AB 2542

282

Motor vehicle insurance - traffic safety

Requires the Department of Motor Vehicles (DMV) to conduct a pilot study on a 3-tier assessment system to determine the effectiveness of the system in identifying functional impairments, reducing crashes and prolonging safe driving years of all drivers regardless of age. It also requires the DMV to submit to the Legislature a report of the pilot study containing specified information. (Same as SB 1847). Effective: Jan. 1, 2007.

AB 2618

167

Tort reform - miscellaneous provisions

This bill updates various code sections that provide for small claims court jurisdiction in specified circumstances to conform to the new small claims court jurisdiction section, which provides that, in addition to the jurisdiction conferred by Code of Civil Procedure (CCP) Section 116.220 ($5,000), the small claims court has jurisdiction in an action brought by a natural person, if the amount of the demand, except as specified, does not exceed $7,500. Effective: Jan. 1, 2007.

AB 2736

169

Motor vehicle insurance - miscellaneous provisions

Deletes provision requiring vehicles registered under the International Registration Plan to be assigned a certain registration expiration date. Requires, for year-round registration, the Director of Motor Vehicles to assign or reassign expiration dates. Requires the adjustment of annual registration fees. Requires an application for apportioned registration to contain specified information. Provides certain related information is confidential. Specifies grounds for refusal of an apportioned registration. Effective: Jan. 1, 2007.

AB 2831

580

Tax issue

Relates to the Insurance Tax, Personal Income Tax and Corporation Tax laws. Extends the operation of credits for a qualified investment made into a community development financial institution. Makes changes relating to certification in connection with the credits. Requires reports to various entities. Requires the Legislative Analyst to prepare an analysis on the fiscal impact and effect on business activity and employment of the specified tax credits. Effective: Sept. 28, 2006.

AB 2886

522

Identity theft - personal information

Provides that a second or subsequent violation of willfully obtaining personal identifying information or another person, and uses of that information for any unlawful purpose is punishable by a fine, imprisonment in the state prison or both. It provides mail theft and receipt of stolen mail are crimes punishable by a fine, a prison term or both. It also provides that criminal action shall include the county in which the mail theft or receipt thereof occurred and the county of residence or place of business. Effective: Jan. 1, 2007.

AB 2977

478

Building codes

Requires new and remodeled pools and spas to provide two safety features from a list of eligible features and requires remodeled pools and spas to cover drains with an anti-entrapment grate. Effective: Jan. 1, 2007.

AB 3011

288

Motor vehicle insurance - commercial auto

This bill conforms the state regulation of intrastate and interstate commercial trucks and buses (motor carriers) to the requirements of the Federal Motor Carrier Safety Administration and designates the California Highway Patrol (CHP) to enforce these provisions in California. Effective: Jan. 1, 2007.

AB 3013

833

Identity theft - personal information

Relates to the state Confidentiality of Medical Information Act. Adds to the act, the Health Insurance Portability and Accountability Act provisions related to patient directories and medical information disclosures to family members, relatives, or other persons identified by a patient, thereby requiring a provider of health care, health care service plan, or contractor to comply with those provisions. Effective: Jan. 1, 2007.

AB 3072

112

Guaranty fund

Extends the date for the issuance of bonds for the California Insurance Guarantee Association to provide funds for payment of workers' compensation claims. Effective: Jan. 1, 2007.

SB 841

21

Fire insurance

Authorizes a state or local fire official to approve a defensible space of up to 300 feet to protect specified critical facilities from fire. Effective: Jan. 1, 2007.

SB 1278

532

Property insurance

This bill renames the Seismic Safety Commission (Commission) as the Alfred E. Alquist Seismic Safety Commission, places the Commission within the State and Consumer Services Agency as an independent unit, increases the membership of the commission, and, makes other substantive and technical changes to the Commission's responsibilities Effective: Jan. 1, 2007.

SB 1438

223

Tort reform - medical malpractice

Relates to information concerning settlements, arbitration awards and judgments in malpractice actions. Recasts reporting provisions and specifies their application to actions or claims involving a podiatrist. Requires the reporting of such to the Podiatric Board. Requires case files used for a peer review process study to be confidential. Relates to a study of the public disclosure of physician misconduct. Relates to case files and other confidential information. Effective: Jan. 1, 2007.

SB 1462

145

Identity theft - personal information

Amends Insurance Information and Privacy Protection Act provisions which require the Insurance Commissioner, when he or she has reason to believe that an insurance institution, agent, or insurance-support organization is violating the act, to issue and serve a statement of charges and notice of hearing. Authorizes the commissioner to complete service of process or to provide the copy of service by using a third party mailing service with tracking capability. Effective: Jan. 1, 2007.

SB 1542

433

Motor vehicle insurance - auto equipment issues

Requires an auto manufacturer to provide a system that gives the registered vehicle owner information necessary to reproduce the vehicle's key to allow the owner to enter, start and operate the vehicle for vehicles sold or leased on or after Jan. 1, 2008. Effective: Jan. 1, 2007.

SB 1613

290

Motor vehicle insurance - traffic safety

This bill prohibits, beginning July 1, 2008, a driver from using a wireless phone while operating a vehicle, unless the phone is specifically designed and configured to allow hands-free operation and is used in that manner and prohibits the use of a wireless phone while driving a school bus or transit vehicle, except as specified. Effective: Jan. 1, 2007.

SB 1699

682

Identity theft - personal information

Relates to financial privacy and electronically printed receipts. Prohibits printing more than the last 5 digits of a credit card account number or the expiration date upon any receipt retained by the person or entity and is signed by the cardholder and any receipt retained by the person or entity which is printed at the time of the purchase, exchange, refund, or return, but is not signed by the cardholder because the cardholder used a personal identification number to complete the transaction. Effective: Jan. 1, 2009.

SB 1849

760

Motor vehicle insurance - enforcement issues

Establishes in the Department of Consumer Affairs a Bureau of Automotive Repair under the supervision and control of the Director of Consumer Affairs. Effective: Jan. 1, 2007.

The information contained in this summary is not intended as a portrayal of every property/casualty-related law enacted in each state. Rather, it represents recently enacted legislation specifically identified by NAMIC State and Regulatory Affairs Staff as bearing direct relevance to those issues that represent NAMIC's National State Legislative Agenda or otherwise deemed pertinent to the interests of the majority of NAMIC members.

This summary is for use as a convenient tool for our members, and is not intended, and should not be considered to be, legal advice. Please consult your legal representatives.