Bill Text: CA AB1395 | 2013-2014 | Regular Session | Chaptered
Bill Title: Insurance: special assessments: Seismic Safety Account.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2014-09-18 - Chaptered by Secretary of State - Chapter 407, Statutes of 2014. [AB1395 Detail]
Download: California-2013-AB1395-Chaptered.html
BILL NUMBER: AB 1395 CHAPTERED
BILL TEXT
CHAPTER 407
FILED WITH SECRETARY OF STATE SEPTEMBER 18, 2014
APPROVED BY GOVERNOR SEPTEMBER 18, 2014
PASSED THE SENATE AUGUST 18, 2014
PASSED THE ASSEMBLY AUGUST 20, 2014
AMENDED IN SENATE JUNE 19, 2014
AMENDED IN SENATE JUNE 16, 2014
AMENDED IN ASSEMBLY APRIL 2, 2013
INTRODUCED BY Assembly Member Perea
MARCH 4, 2013
An act to amend Sections 1872.81 and 12975.9 of the Insurance
Code, relating to insurance.
LEGISLATIVE COUNSEL'S DIGEST
AB 1395, Perea. Insurance: special assessments: Seismic Safety
Account.
Existing law requires a special purpose assessment of $0.25,
commencing July 1, 2014, until January 1, 2016, and not exceeding
$0.25 thereafter, on each vehicle insured under an insurance policy
issued in this state by the insurer. Existing law specifies that,
upon appropriation by the Legislature, 2/3 of the special purpose
assessment be used for the purpose of funding the consumer service
functions of the Department of Insurance related to regulating
automobile insurers, as provided, and 1/3 of the special purpose
assessment be used for the purpose of improving consumer functions of
the department, related to regulating automobile insurers, as
specified. Existing law also authorizes, upon appropriation by the
Legislature, to use up to $0.05 of the $0.25 special purpose
assessment revenues collected to notify insurers and other members of
the public about the existence of any low-cost automobile insurance
program.
This bill would raise the amount of the special purpose assessment
to $0.26, until January 1, 2016, and not exceeding $0.26 thereafter.
Existing law created the Seismic Safety Account as a special
account within the Insurance Fund with the funds to be distributed,
upon appropriation by the Legislature, to the Alfred E. Alquist
Seismic Safety Commission for the support of the commission and to
the department for the actual administrative costs incurred in
collecting the assessments. In order to fund the account, an
assessment, as specified, is imposed on each person who owns real
property, commercial or residential, that is covered by a property
insurance policy.
This bill would provide that the insurer is not required to refund
any portion of an assessment because the policy or coverage is
terminated prior to the expiration date of the policy or coverage.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1872.81 of the Insurance Code is amended to
read:
1872.81. In addition to the special purpose assessment imposed
pursuant to Section 1872.8, effective July 1, 2014, an insurer doing
business in this state shall, until January 1, 2016, pay to the
commissioner an annual special purpose assessment of twenty-six cents
($0.26), and thereafter pay to the commissioner an annual special
purpose assessment in an amount not to exceed twenty-six cents
($0.26), as determined by the commissioner, for each vehicle insured
under an insurance policy it issues in this state, for expenditure,
upon appropriation by the Legislature, as follows:
(a) Two-thirds of the special purpose assessment shall be used for
the purpose of funding the consumer service functions of the
department that are related to regulating automobile insurers,
including those functions performed by the rating and underwriting
service bureau, the claims service bureau, the investigations bureau,
or any successor bureaus of the department that may assume the
consumer service functions of these bureaus, and legal services in
support of these bureaus.
(b) One-third of the special purpose assessment shall be used for
the purpose of improving consumer functions identified in subdivision
(a) of the department that are related to regulating automobile
insurers, including, for improving the ability of the department to
respond to consumer complaints and information requests through the
department's toll-free telephone number, and for improving the
ability of the department to offer information about automobile
insurance rates to the public.
(c) Upon appropriation by the Legislature, the department may use
up to five cents ($0.05) of the special purpose assessment revenues
collected pursuant to this section to notify insurers and other
members of the public about the existence of any low-cost automobile
insurance program established pursuant to Section 11629.7 or other
statutes that establish a program of the type identified in Section
11629.7. In requesting an appropriation for this purpose under its
proposed plan developed pursuant to Section 11629.85, the department
shall explain, with as much specificity as is reasonably possible,
the objectives for the use of the funds and the quantitative criteria
by which the Legislature may evaluate the effectiveness of the
department's use of the funds.
(d) The commissioner shall include, in the annual report submitted
pursuant to Section 12922, all of the following information:
(1) The number of opened consumer complaints related to automobile
insurance.
(2) The number of opened investigations related to automobile
insurance.
(3) The number of investigations related to automobile insurance
referred to prosecuting agencies.
(4) The number of administrative or regulatory cases related to
automobile insurance referred to the department's legal division.
(5) The number of administrative or regulatory enforcement actions
taken in cases related to automobile insurance.
(6) Total aggregate annual assessment revenue and expenditures
pursuant to the assessment.
SEC. 2. Section 12975.9 of the Insurance Code is amended to read:
12975.9. (a) The Seismic Safety Account is hereby created as a
special account within the Insurance Fund. Moneys in the account are
available, upon appropriation by the Legislature, for the purposes of
this section to fund the department and the Alfred E. Alquist
Seismic Safety Commission.
(b) There is hereby imposed an assessment on each person who owns
real property, commercial or residential, that is insured by a
property insurance policy. The department shall calculate the annual
assessment to be charged to each commercial and residential earned
property exposure. The assessment shall be set annually every August
1, beginning August 1, 2014, for all commercial and residential
earned property exposures reported during the previous calendar year.
The annual assessment shall be set at fifteen cents ($0.15) per
earned property exposure for the first three years of the
implementation of this section. Each year thereafter, the annual
assessment shall be based upon the number of earned property
exposures from both commercial and residential insurance policies,
the amount required for the support of the Alfred E. Alquist Seismic
Safety Commission, the actual collection and administrative costs of
the department, and the maintenance of an adequate reserve, but shall
not exceed fifteen cents ($0.15) per earned property exposure.
(c) The insurer, upon receipt of an invoice from the department,
shall transmit payment to the department for deposit into the Seismic
Safety Account. The insurer shall recover the assessment from the
insured, unless the insurer elects to pay the assessment on the
insured's behalf. The insurer may provide a description of the
assessment to the insured as part of its billing statement. The
insurer is not required to refund any portion of an assessment
because the policy or coverage is terminated prior to the expiration
date of the policy or coverage. Any deficiency or excess in the
amount collected in relation to the appropriation authority for the
commission and the department shall be accounted for in the
subsequent annual fee calculation. Any balance remaining in the
Seismic Safety Account at the end of each fiscal year shall be
retained in the account and carried forward to the next fiscal year.
(d) Funds in the Seismic Safety Account shall be distributed, upon
appropriation by the Legislature, to the Alfred E. Alquist Seismic
Safety Commission for the support of the commission and to the
department for the actual administrative costs incurred in collecting
the assessments.
(e) Any assessment collected from an insured that has not been
remitted to the department shall be a debt owed to the state by the
insurer. This part does not impose any obligation upon an insurer to
take any legal action to enforce the collection of the assessment
imposed by this section.
(f) Payment of the assessment shall be considered delinquent if
not paid within 45 days of the invoice date. The department is
authorized to charge a late fee of 1.5 percent per month of the
balance due, compounded monthly, for any amount not paid within this
period in accordance with Section 12995.
(g) (1) Notwithstanding Section 10231.5 of the Government Code,
the department shall report by December 1 of each year, beginning on
December 1, 2014, to the Legislature, the Alfred E. Alquist Seismic
Safety Commission, and the Department of Finance on the assessment
calculation methodology employed.
(2) A report to be submitted to the Legislature pursuant to this
subdivision shall be submitted in compliance with Section 9795 of the
Government Code.
