Bill Text: CA SB1273 | 2013-2014 | Regular Session | Chaptered
Bill Title: Insurance: low-cost automobile insurance program.
Spectrum: Partisan Bill (Democrat 3-0)
Status: (Passed) 2014-09-19 - Chaptered by Secretary of State. Chapter 487, Statutes of 2014. [SB1273 Detail]
Download: California-2013-SB1273-Chaptered.html
BILL NUMBER: SB 1273 CHAPTERED
BILL TEXT
CHAPTER 487
FILED WITH SECRETARY OF STATE SEPTEMBER 19, 2014
APPROVED BY GOVERNOR SEPTEMBER 19, 2014
PASSED THE SENATE AUGUST 18, 2014
PASSED THE ASSEMBLY AUGUST 14, 2014
AMENDED IN ASSEMBLY AUGUST 4, 2014
AMENDED IN ASSEMBLY JUNE 30, 2014
AMENDED IN ASSEMBLY JUNE 18, 2014
AMENDED IN SENATE APRIL 22, 2014
AMENDED IN SENATE APRIL 2, 2014
INTRODUCED BY Senator Lara
(Coauthor: Senator Correa)
(Coauthor: Assembly Member Alejo)
FEBRUARY 21, 2014
An act to amend Sections 11629.7, 11629.71, 11629.72, 11629.73,
11629.745, 11629.75, 11629.76, 11629.77, 11629.81, 11629.84,
11629.85, and 11629.86 of, and to repeal and add Section 11629.87 of,
the Insurance Code, relating to insurance.
LEGISLATIVE COUNSEL'S DIGEST
SB 1273, Lara. Insurance: low-cost automobile insurance program.
(1) Existing law establishes within the California Automobile
Assigned Risk Plan (CAARP) a low-cost automobile insurance program
for all counties in California, until January 1, 2016, in order to
provide a means for eligible consumers to buy automobile insurance,
as specified. The parameters of the program, include, but are not
limited to, value limits for the insured vehicle, initial ratesetting
for certain counties, a surcharge for specified high-risk drivers,
eligibility, sales commissions set at the rate CAARP pays for private
passenger nonfleet risks, cancellation restrictions, rate and
surcharge setting restrictions, and reporting requirements. Existing
law limits the premium financing arrangements under the program to
those offered by CAARP and one under which the insured pays no more
than 15% of the policy cost initially followed by 6 payments.
This bill would revise and recast the parameters of the program
by, among other things, deleting provisions that limit the initial
implementation of the program to specified counties and that require
the Insurance Commissioner to make a need-based assessment as to
implementation in all other counties, by increasing the limits on the
value of an automobile that can be insured through the program, and
by additionally authorizing the value of an automobile to be
determined by a method adopted by the CAARP Advisory Committee and
approved by the commissioner. The bill would extend the repeal date
of the program to January 1, 2020. The bill would also expand the
surcharge and eligibility requirements to include drivers with fewer
than 3 years of driving history, including a person who operates a
motor vehicle with a specified type of driver's license, or drivers
who have not been continually licensed for the past 3 years. The bill
would require, after the January 1, 2017, rate filing, that
subsequent rate filings be mandatory if the rate indication is a
change of greater than 7% from the previous filing, or at the
discretion of the CAARP Advisory Committee if the rate indication is
a change of less than 7%. The bill would allow additional premium
payment plans, subject to approval by the commissioner, including one
under which the insured pays no more than 20% of the policy cost
initially followed by 7 payments.
(2) Existing law requires an agent or broker, referred to as a
producer, to inform every new prospective automobile insurance
policyholder who requests specified information that the low-cost
automobile insurance policy may be available for qualifying
motorists. Under existing law, if a consumer requests more
information about the program from a producer who is not certified
under the plan, that producer is required to provide the consumer
with a toll-free telephone number for the plan as an alternative
coverage option for the consumer.
This bill would allow those producers who are not certified to
alternatively provide the consumer with the program's Internet Web
site.
(3) Under existing law, a certified producer who issues a low-cost
automobile insurance policy pursuant to the program is entitled to
the same commission rate as is paid by the plan for private
passenger, nonfleet risks.
This bill would instead, upon the setting of policy rates in 2015
as provided, entitle those certified producers to a commission of 12%
or $50, whichever is greater. The bill would require, by January 1,
2016, the CAARP Advisory Committee to report to the commissioner on a
proposal, subject to approval by the commissioner, to allow a
consumer to reinstate, in lieu of canceling, all policies that have
been canceled for nonpayment of premium, and on a proposal, subject
to approval by the commissioner, to allow consumers to keep policies
in force by making installment payments by debit card or credit card.
The bill would also require, by July 1, 2016, the CAARP Advisory
Committee to report to the commissioner on a proposal, subject to
approval by the commissioner, to allow access to the program for
applicants 16 to 18 years of age who are economically independent and
meet other eligibility guidelines, and for families who have an
adult driver covered under the program and a driver 16 to 18 years of
age in the household.
(4) Existing law requires the plan to report to the Legislature
annually on the status of the program, and requires the commissioner
to make an annual report to specified committees of the Legislature.
This bill would instead require the plan to make the former report
to the commissioner and to include specified data in that report,
and would require the commissioner to combine the 2 reports and
submit the combined report to the Legislature on or before March 15
annually.
(5) Existing law requires, in order to be eligible for funding
through the budget process, that the plan be reviewed by specified
committees of the Legislature.
This bill would delete that provision.
(6) Existing law requires the plan, subject to the commissioner's
approval, to establish and maintain an Internet Web site that
provides members of the public with an option for either a referral
to a list of certified agents or brokers, as specified, or an
assignment to a randomly selected certified agent or broker, as
specified.
This bill would delete the above provisions and instead require
the Department of Insurance, by December 31, 2015, in consultation
with the CAARP Advisory Committee, to establish a consumer-oriented
Internet Web site that fulfills specified requirements, and would
require by December 31, 2015, the CAARP Advisory Committee to develop
a proposal, subject to approval by the commissioner, for interested
consumers to apply for the program without physically visiting the
office of a producer, as provided.
(7) This bill would make conforming changes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 11629.7 of the Insurance Code is amended to
read:
11629.7. (a) There is established, within the California
Automobile Assigned Risk Plan established under Section 11620, a
low-cost automobile insurance program for all counties in California.
(b) The commissioner, after a public hearing, shall approve or
issue a reasonable plan for the equitable apportionment, among
insurers required to participate in the California Automobile
Assigned Risk Plan established under Section 11620, of persons who
are eligible to purchase through the program a low-cost automobile
insurance policy, as described in Section 11629.71. The program shall
be conducted in conjunction with the California Automobile Assigned
Risk Plan established under Section 11620.
SEC. 2. Section 11629.71 of the Insurance Code is amended to read:
11629.71. A low-cost automobile insurance policy for purposes of
the program established under this article shall have all of the
following attributes:
(a) The policy shall offer coverage in the amount of ten thousand
dollars ($10,000) for bodily injury to, or death of, each person as a
result of any one accident and, subject to that limit as to one
person, the amount of twenty thousand dollars ($20,000) for bodily
injury to, or death of all persons as a result of any one accident,
and the amount of three thousand dollars ($3,000) for damage to
property of others as a result of any one accident.
(b) The coverage required by Section 11580.2 shall be made
available to the consumer. However, an insurer may charge a premium
for that coverage in addition to the premium set forth in Section
11629.72. Notwithstanding the coverage amounts required by Section
11580.2 and Section 16056 of the Vehicle Code, uninsured motorist
coverage issued in conjunction with a low-cost automobile policy
under the program, with coverage limits at least equal to the limits
of liability in the underlying low-cost automobile policy, shall
satisfy the requirements of Section 11580.2 and the financial
responsibility requirements of Sections 4000.37, 16021, and 16431 of
the Vehicle Code.
(c) Medical payments coverage shall be made available to the
consumer. However, an insurer may charge a premium for that coverage
in addition to the premium set forth in Section 11629.72.
(d) The policy shall have an initial term of one year, renewable
on an annual basis thereafter.
(e) The policy shall cover the person named in the policy, and to
the same extent that insurance is provided to the named insured, any
other person using the automobile, provided the use is with his or
her permission, express or implied, and within the scope of that
permission, except that the policy shall not cover members of the
named insured's household who do not satisfy the requirements of
subdivisions (b) to (e), inclusive, of Section 11629.73.
(f) The policy shall provide coverage for an automobile with a
value of twenty-five thousand dollars ($25,000) or less, as evidenced
by the value given to the automobile by the Department of Motor
Vehicles in assessing vehicle license fees, or another method of
determining market value adopted by the California Automobile
Assigned Risk Plan Advisory Committee (CAARP Advisory Committee) and
approved by the commissioner.
SEC. 3. Section 11629.72 of the Insurance Code is amended to read:
11629.72. (a) The annual rate offered under the program for each
of the counties in California shall be established at a date
according to the discretion of the commissioner. Surcharges, as a
percentage of the base rate, shall be added to the base rate and that
percentage shall be set at the discretion of the commissioner, if
the named insured or a resident of the household of the named insured
will be a driver of the automobile covered under the low-cost
policy, and is either or both of the following:
(1) An unmarried male between 19 and 24 years of age.
(2) A person 19 years of age or older to whom any of the following
applies:
(A) Operates a vehicle with a driver's license issued by the
Department of Motor Vehicles pursuant to Section 12801.9 of the
Vehicle Code and has fewer than three years of driving history.
(B) Has fewer than three years of driving history.
(C) Has not been continually licensed to drive for the past three
years.
(b) (1) The California Automobile Assigned Risk Plan shall make
available to an insured under the program, subject to approval by the
commissioner, a premium installment option pursuant to which an
insured is required to pay not more than 20 percent of the total
policy cost upon issuance of the low-cost policy, followed thereafter
by seven other payments. The plan may make additional payment plans
available, subject to approval by the commissioner.
(2) No other premium financing arrangement shall be permitted.
(c) Rates for policies issued under the program in each county or
city and county shall be reviewed and revised as follows:
(1) Rates shall be sufficient to cover (A) losses incurred under
policies issued under the program, and (B) expenses, including, but
not limited to, all reasonable and necessary expenses such as the
costs of administration, underwriting, taxes, commissions, and claims
adjusting, that are incurred due to participation in the program.
For purposes of this paragraph, "losses incurred" means claims paid,
claims incurred and reported, and claims incurred but not yet
reported. In assessing loss reserves, the commissioner shall only
allow loss reserves that are estimated from actual losses in the
program or comparable data by a licensed statistical agent, as
adjusted to reflect coverage provided under the program.
(2) Rates shall be set so as to result in no projected subsidy of
the program by those policyholders of insurers issuing policies under
the program who are not participants in the program.
(3) Rates shall be set with respect to the program so as to result
in no projected subsidy by policyholders in one county of
policyholders in any of the other counties.
(4) (A) Commencing on January 1, 2015, and annually thereafter
through January 1, 2017, the California Automobile Assigned Risk Plan
shall submit the loss and expense data, together with a proposed
rate and the surcharge authorized by subdivision (a) for the low-cost
automobile policy for the program, to the commissioner for approval
in accordance with this chapter. The commissioner shall act on the
recommendation within 90 days.
(B) After the January 1, 2017, rate filing, subsequent rate
filings are mandatory if the rate indication is a change of greater
than 7 percent from the previous filing, or at the discretion of the
CAARP Advisory Committee if the rate indication is a change of less
than 7 percent.
SEC. 4. Section 11629.73 of the Insurance Code is amended to read:
11629.73. A low-cost automobile insurance policy under the
program shall only be available for purchase by persons who satisfy
the following eligibility requirements:
(a) The person shall be in a household with an annual gross
household income that does not exceed 250 percent of the federal
poverty level, as defined in Part 6.2 (commencing with Section 12693)
or as defined in an equivalent manner that is approved by the
commissioner.
(b) The person shall be no less than 19 years of age and have been
continuously licensed to drive an automobile for the previous three
years, except that a person who has not been continually licensed to
drive or has fewer than three years of driving history may qualify
for the surcharge under subdivision (a) of Section 11629.72.
(c) The person shall have not more than one of either, but not
both, of the following within the previous three years:
(1) A property damage only accident in which the driver was
principally at fault.
(2) A point for a moving violation.
(d) The person shall not have on record within the previous three
years, an at-fault accident involving bodily injury or death.
(e) The person shall not have a felony or misdemeanor conviction
for a violation of the Vehicle Code on his or her motor vehicle
record.
(f) The person shall not be a college student claimed as a
dependent of another person for federal or state income tax purposes.
SEC. 5. Section 11629.745 of the Insurance Code is amended to
read:
11629.745. (a) An agent or broker, hereafter referred to as a
producer, who conducts business in a county in which a low-cost
automobile insurance policy is available pursuant to this article
shall inform every new prospective automobile insurance policyholder
who requests a minimum limits or basic limits insurance policy, or
coverage to meet California's minimum limits automobile insurance
requirements, that the low-cost automobile insurance policy may be
available for qualifying motorists. The information may be provided
orally if the producer has been contacted by telephone, or in
writing, but shall be communicated to the policyholder prior to the
application for automobile insurance coverage in the language in
which the producer has otherwise communicated with the consumer.
(b) If the consumer requests more information about the low-cost
program the producer shall do either of the following:
(1) If the producer is California Automobile Assigned Risk Plan
certified, provide the consumer with an explanation in an information
pamphlet produced by the California Automobile Assigned Risk Plan
and approved and provided by the Department of Insurance of the
qualifications, cost, and coverage provided by the policy. If the
consumer qualifies for the low-cost policy and wishes to purchase the
policy, the California Automobile Assigned Risk Plan certified
producer shall provide the application and, upon completion, submit
the application, supporting documents, and the applicant's
certification to the California Automobile Assigned Risk Plan. The
submittal of the California Automobile Assigned Risk Plan application
may be in addition to any other coverage offered or applied for
through the producer.
(2) If the producer is not California Automobile Assigned Risk
Plan certified, the producer shall provide the consumer with the
toll-free telephone number for the California Automobile Assigned
Risk Plan or the program's Internet Web site address as an option to
coverage offered by the producer.
SEC. 6. Section 11629.75 of the Insurance Code is amended to read:
11629.75.
(a) A certified producer shall provide to an applicant for a
low-cost automobile insurance policy under this article a notice
relating to coverage under the policy. The notice shall be provided
in a separate document at the time of application, and include the
following statement in 14-point boldface type:"NOTICE
INSURANCE COVERAGE PROVIDED IN THE POLICY YOU ARE BUYING CONTAINS
REDUCED LIABILITY COVERAGE FOR PERSONAL INJURIES OR PROPERTY DAMAGE
RESULTING FROM THE OPERATION OF THE INSURED VEHICLE. IF LOSSES FROM
AN AUTOMOBILE ACCIDENT EXCEED THE COVERAGE PROVIDED BY THIS POLICY,
YOU CAN BE HELD PERSONALLY LIABLE AND RESPONSIBLE FOR THOSE LOSSES.
THIS POLICY PROVIDES LIABILITY COVERAGE FOR INJURIES OR DEATH CAUSED
TO OTHER PERSONS IN THE TOTAL AMOUNT OF TEN THOUSAND DOLLARS
($10,000) PER PERSON IN ANY ONE ACCIDENT, AND UP TO A TOTAL AMOUNT OF
TWENTY THOUSAND DOLLARS ($20,000) FOR ALL PERSONS IN ANY ONE
ACCIDENT. THE POLICY ALSO PROVIDES UP TO A TOTAL AMOUNT OF THREE
THOUSAND DOLLARS ($3,000) IN LIABILITY COVERAGE FOR PROPERTY DAMAGE
IN ANY ONE ACCIDENT. IF YOU WANT MORE INSURANCE COVERAGE, YOU MUST
REQUEST A DIFFERENT POLICY.
THIS POLICY ALSO DOES NOT COVER DAMAGE TO YOUR OWN VEHICLE, LOSSES
RESULTING FROM YOUR BODILY INJURY OR DEATH, OR COVERAGE FOR LOSSES
CAUSED BY AN UNINSURED OR UNDERINSURED DRIVER. HOWEVER, THESE OTHER
COVERAGES MAY BE AVAILABLE AT EXTRA COST THROUGH OTHER INSURERS.
THIS POLICY MAY ALSO CONTAIN UNINSURED MOTORIST BODILY INJURY
COVERAGE IN THE TOTAL AMOUNT OF TEN THOUSAND DOLLARS ($10,000) PER
PERSON IN ANY ONE ACCIDENT AND UP TO A TOTAL AMOUNT OF TWENTY
THOUSAND DOLLARS ($20,000) FOR ALL PERSONS IN ANY ONE ACCIDENT, IF
YOU SO CHOOSE. IN ADDITION, THIS POLICY MAY ALSO CONTAIN MEDICAL
PAYMENTS COVERAGE IN THE AMOUNT OF ONE THOUSAND DOLLARS ($1,000) PER
PERSON IN ANY ONE ACCIDENT, IF YOU SO CHOOSE.
THIS POLICY DOES NOT COVER ANY OTHER DRIVER IN YOUR HOUSEHOLD WHO:
(a) IS UNDER 19 YEARS OF AGE; OR
(b) HAS LESS THAN 3 YEARS OF CONTINUOUSLY LICENSED DRIVING EXPERIENCE
(UNLESS THE POLICY INCLUDES A SURCHARGE FOR THIS DRIVER); OR
(c) HAS MORE THAN ONE OF EITHER, OR BOTH, OF THE FOLLOWING:
--A PROPERTY DAMAGE ONLY ACCIDENT IN WHICH THE DRIVER WAS PRINCIPALLY
AT FAULT.
--A POINT FOR A MOVING VIOLATION; OR
(d) HAS IN THE PREVIOUS 3 YEARS AN AT-FAULT ACCIDENT INVOLVING BODILY
INJURY OR DEATH; OR
(e) HAS A FELONY OR MISDEMEANOR CONVICTION FROM A VIOLATION OF THE
VEHICLE CODE ON HIS OR HER MOTOR VEHICLE RECORD."
(b) When the certified producer establishes delivery of the
disclosure form specified in subdivision (a) by obtaining the
signature of the applicant or insured, there shall be a conclusive
presumption that the certified producer has complied with the
disclosure requirements of this section.
SEC. 7. Section 11629.76 of the Insurance Code is amended to read:
11629.76. (a) (1) For a low-cost automobile insurance policy
issued pursuant to the program, certified producers shall be entitled
to the same commission rate as is paid by the California Automobile
Assigned Risk Plan for private passenger, nonfleet risks under
Article 4 (commencing with Section 11620). The commission rate
prescribed in this paragraph shall only be in effect until the
conditions described in paragraph (2) are fulfilled.
(2) Effective upon the setting of policy rates in 2015 pursuant to
Section 11629.72, for a low-cost automobile insurance policy issued
pursuant to the program, certified producers shall be entitled to a
commission rate of 12 percent or fifty dollars ($50), whichever is
greater.
(b) Notwithstanding subdivision (a), the commissioner may at any
time establish a commission for a low-cost automobile insurance
policy issued pursuant to the program and may make the commission
effective on any policy originated within an entire year, or any
portion of a year, as is needed to provide an incentive to certified
producers to sell low-cost automobile insurance to eligible
applicants. The commissioner shall not establish a commission
pursuant to this subdivision if the commissioner determines that
setting the commission rate will result in a lower commission than
the commission paid by the California Automobile Assigned Risk Plan
for private passenger, nonfleet risks under Article 4 (commencing
with Section 11620).
(c) No other fees of any kind may be charged or collected pursuant
to this section and the sale of a low-cost policy under this article
shall not be conditioned on the purchase of any other product or
service.
SEC. 8. Section 11629.77 of the Insurance Code is amended to read:
11629.77. (a) A low-cost automobile insurance policy issued
pursuant to the program shall be canceled only for the following
reasons:
(1) Nonpayment of premium.
(2) Fraud or material misrepresentation affecting the policy or
the insured.
(3) The purchase of additional automobile liability insurance
coverage in violation of subdivision (a) of Section 11629.78.
(4) The purchase or maintenance of automobile liability insurance
coverage other than a low-cost policy for any additional vehicles in
the insured's household, in violation of subdivision (b) of Section
11629.78.
(b) A policy shall be nonrenewed only for the following reasons:
(1) A substantial increase in the hazard insured against.
(2) The insured no longer meets the applicable eligibility
requirements. In this regard, the eligibility of an insured shall be
recertified by the California Automobile Assigned Risk Plan after the
first year of eligibility, and annually thereafter by the insurer
that issued the policy.
(c) By January 1, 2016, the CAARP Advisory Committee shall report
to the commissioner on a proposal, subject to approval by the
commissioner, to allow a consumer to reinstate, in lieu of canceling,
all policies that have been canceled for nonpayment of premium, and
on a proposal, subject to approval by the commissioner, to allow
consumers to make installment payments by debit card or credit card.
The CAARP Advisory Committee shall also report, by July 1, 2016, on a
proposal, subject to approval by the commissioner, to allow access
to the program for applicants 16 to 18 years of age who are
economically independent and meet other eligibility guidelines, and
also for families who have an adult driver covered under the program
and a driver 16 to 18 years of age in the household.
SEC. 9. Section 11629.81 of the Insurance Code is amended to read:
11629.81. (a) The California Automobile Assigned Risk Plan shall
report to the commissioner on an annual basis, and at those
additional times as it deems prudent, on the status of the program.
The report shall include data regarding new policies, renewed
policies, and policy cancellations or nonrenewals.
(b) The department shall combine the report pursuant to
subdivision (a) with the report required by Section 11629.85 and
submit the combined report to the Legislature on or before March 15
of each year.
(c) A report submitted pursuant to subdivision (b) shall be
submitted in compliance with Section 9795 of the Government Code.
SEC. 10. Section 11629.84 of the Insurance Code is amended to
read:
11629.84. This article shall remain in effect only until January
1, 2020, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2020, deletes or extends
that date.
SEC. 11. Section 11629.85 of the Insurance Code is amended to
read:
11629.85. (a) Notwithstanding Section 10231.5 of the Government
Code, on or before March 15 of each year, the commissioner shall
prepare and propose a plan in a report to the Legislature setting
forth the methods the commissioner intends to implement to inform
households eligible for the program about the availability of
low-cost automobile insurance.
(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 agencies, 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 for the previous
fiscal year.
(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.
(f) A report submitted pursuant to subdivision (a) shall be
submitted in compliance with Section 9795 of the Government Code.
SEC. 12. Section 11629.86 of the Insurance Code is amended to
read:
11629.86. (a) A California Automobile Assigned Risk Plan
certified producer may accept and process an application to purchase
a low-cost automobile insurance policy under this program through an
Internet Web site, in accordance with this section and regulations
adopted by the department pursuant to this section.
(b) Any producer seeking certification to accept and process
low-cost automobile insurance policy applications through an Internet
Web site shall notify the California Automobile Assigned Risk Plan
of its intentions to do so prior to accepting any applications to the
program.
(c) Prior to accepting payment and upon transmitting any
information from the consumer, the producer's Internet Web site shall
include a clear explanation of whether the consumer will be afforded
insurance coverage upon payment and, if not, when the consumer will
receive coverage and how he or she will receive notice of coverage.
(d) A producer accepting and processing applications through an
Internet Web site shall be entitled to the same commission available
to a producer selling a low-cost automobile insurance policy by any
other means acceptable under the law.
(e) Any producer accepting and processing applications through an
Internet Web site is subject to the laws and rules governing this
program and is liable for any errors and omissions related to the
transaction of insurance to the same extent as a producer selling a
low-cost automobile insurance policy by any other means acceptable
under the law.
(f) Any consumer information required by this article may be
accepted by electronic means after the department adopts regulations
implementing this section and only if the information is submitted in
accordance with those regulations.
(g) The California Automobile Assigned Risk Plan shall coordinate
with the department in order to develop a system for receiving and
assigning policies issued through Internet Web sites.
(h) The California Automobile Assigned Risk Plan may request, and
the department may include in its plan submitted pursuant to Section
11629.85, up to fifty thousand dollars ($50,000) from the department'
s existing consumer outreach fund to be used for the sole purpose of
implementing this section.
SEC. 13. Section 11629.87 of the Insurance Code is repealed.
SEC. 14. Section 11629.87 is added to the Insurance Code, to read:
11629.87. (a) The department shall, by December 31, 2015, in
consultation with the CAARP Advisory Committee, establish and
maintain a consumer-oriented Internet Web site that provides all of
the following:
(1) Referral to a list of certified agents or brokers with an
office in the same geographic area as the consumer who may be
contacted to purchase a low-cost automobile insurance policy.
(2) Information about the eligibility requirements, benefits, and
limits of the low-cost automobile insurance policy.
(3) Notification that if a consumer does not qualify for the
low-cost automobile insurance policy, other policies may be available
from producers or insurers, and directing the consumer to the
department's automobile insurance premium comparison Internet Web
page.
(b) The CAARP Advisory Committee shall develop a proposal, by
December 31, 2015, subject to approval by the commissioner, for
interested consumers to apply for the program without physically
visiting the office of a producer. This proposal may include the
electronic uploading of documents, electronic signatures, linking
eligible hotline callers and Internet Web site visitors directly to
one or more producers, and electronic payments.
