Bill Text: CA AB1681 | 2021-2022 | Regular Session | Amended

California Assembly Bill 1681 (Prior Session Legislation)

NOTE: There are more recent revisions of this legislation. Read Latest Draft

Bill Title: Insurance: fraud prevention and detection.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2022-09-30 - Chaptered by Secretary of State - Chapter 861, Statutes of 2022. [AB1681 Detail]

Download: California-2021-AB1681-Amended.html

Amended IN Assembly March 24, 2022

Amended IN Assembly February 07, 2022

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill

No. 1681

Introduced by Assembly Member Daly

January 24, 2022

An act to ~~add Section 1879.11 to~~ repeal and add Section 1879.1 of the Insurance Code, relating to insurance fraud.

LEGISLATIVE COUNSEL'S DIGEST

AB 1681, as amended, Daly. Insurance: fraud prevention and detection.

Existing law authorizes the Insurance Commissioner or their designated deputy commissioner to convene meetings with insurance companies to discuss specific information concerning suspected, anticipated, or completed acts of insurance fraud. Existing law protects a person sharing information pursuant to that authorization from civil liability for libel, slander, or any other relevant cause of action if the commissioner or their designated deputy commissioner is present at the meeting and advises meeting participants of guidelines to ensure compliance with federal and state antitrust laws, as specified, and if there is no fraud or malice on the part of the participants.

This bill would similarly authorize a district attorney or their designated assistant district attorney to convene those meetings with representatives of insurance companies and representatives of self-insured employers to discuss that specific information relating to insurance fraud. The bill would protect a person sharing information pursuant to that authorization from civil liability for libel, slander, or any other relevant cause of action if the district attorney or their designated assistant district attorney is present at the meeting and advises meeting participants of guidelines to ensure compliance with federal and state antitrust laws, as specified, and if there is no fraud or malice on the part of the participants.
This bill, instead, would authorize the commissioner or their designee, or a district attorney or their designee, to convene meetings with representatives of insurance companies and representatives of self-insured employers to discuss specific information concerning suspected, anticipated, or completed acts of insurance fraud impacting multiple payors. The bill would protect a person sharing information pursuant to that authorization from civil liability for libel, slander, or any other relevant cause of action if the commissioner, or their designee, or a district attorney, or their designee, is present at the meeting, the representatives for insurance companies and representatives of self-insured employers comply with all federal and state antitrust laws, and there is no fraud or malice on the part of the participants.
This bill would require an insurance company with a representative at a meeting described above that reasonably believes or knows that a fraudulent claim is being made based on information obtained at the meeting to comply with a specified reporting requirement relating to insurance fraud, and would require an individual convening a meeting described above that reasonably believes or knows that a fraudulent claim is being made based on information obtained at the meeting to share that information with the commissioner or with any relevant district attorney, as appropriate, and as specified. The bill would require a district attorney or their designee who convenes a meeting described above to notify the department prior to the meeting and would authorize the deputy commissioner of the department’s Enforcement Branch or their designees to attend the meeting.

Vote: MAJORITY Appropriation: NO Fiscal Committee: NOYES Local Program: NO

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

SECTION 1.

The Legislature finds and declares all of the following:

(a) Insurance fraud is rampant in the state, amounting to billions of dollars in damages annually, particularly within workers’ compensation insurance.

(b) The cost of insurance fraud results in higher insurance premiums for consumers, increased costs for self-insured employers, and higher taxes for public entities.

(c) The Insurance Commissioner and numerous district attorneys have recently publicly called upon insurers, self-insured employers, and public entities to more proactively investigate and fight insurance fraud, including workers’ compensation insurance fraud.

(d) In 2010, the Legislature passed, and the Governor signed into law, Section 1879.1 of the Insurance Code to empower the commissioner to convene investigative debriefings as a tool to fight fraud.

(e) Existing law does not authorize self-insured employers and public entities to participate in those debriefings if they are convened, and district attorneys cannot convene those debriefings.

(f) An analysis of major fraud prosecutions of the last decade demonstrates that investigative debriefings are an indispensable tool to combat major fraud rings.

(g) Multimillion dollar prosecutions are often complex and require sophisticated investigative approaches to identify and gather evidence in a timely manner, which would be made possible with the participation of representatives of both insurance companies and self-insured employers in the debriefings, along with the ability of district attorneys to convene those debriefings.

SEC. 2.Section 1879.11 is added to the Insurance Code, immediately following Section 1879.1, to read:
1879.11.
A district attorney or their designated assistant district attorney may convene meetings with representatives of insurance companies and representatives of self-insured employers to discuss specific information concerning suspected, anticipated, or completed acts of insurance fraud. Information shared at those meetings regarding specific suspected, anticipated, or completed acts of insurance fraud shall not make a person subject to civil liability for libel, slander, or any other relevant cause of action provided that all of the following requirements are met:
~~(a)The district attorney or their designated assistant district attorney is present at the meeting or meetings.~~
(b)The district attorney or their designated assistant district attorney advises meeting participants, at the beginning of any meeting convened pursuant to this section, of guidelines to ensure compliance with federal and state antitrust laws.
(c)There is no fraud or malice on the part of the representatives of the insurance companies or representatives of self-insured employers or the district attorney or their designated assistant district attorney.

SEC. 2.

Section 1879.1 of the Insurance Code is repealed.

1879.1.
The commissioner or his or her designated deputy commissioner may convene meetings with representatives of insurance companies to discuss specific information concerning suspected, anticipated, or completed acts of insurance fraud. Information shared at those meetings regarding specific suspected, anticipated, or completed acts of insurance fraud shall not make a person subject to civil liability for libel, slander, or any other relevant cause of action provided that all of the following requirements are met:
~~(a)The commissioner or his or her designated deputy commissioner is present at the meeting or meetings.~~
(b)The commissioner or his or her designated deputy commissioner advises meeting participants, at the beginning of any meeting convened pursuant to this section, of guidelines to ensure compliance with federal and state antitrust laws.
~~(c)There is no fraud or malice on the part of the representatives of the insurance companies or the commissioner or his or her designated deputy commissioner.~~

SEC. 3.

Section 1879.1 is added to the Insurance Code, to read:

1879.1.
(a) The commissioner, or their designee, or a district attorney, or their designee, may convene meetings with representatives of insurance companies and representatives of self-insured employers to discuss specific information concerning suspected, anticipated, or completed acts of insurance fraud impacting multiple payors. Information shared at those meetings regarding specific suspected, anticipated, or completed acts of insurance fraud shall not make a person subject to civil liability for libel, slander, or any other relevant cause of action provided that all of the following requirements are met at the meeting:
(1) The commissioner, or their designee, or a district attorney, or their designee, is present at the meeting or meetings.
(2) Representatives for insurance companies and representatives of self-insured employers comply with all federal and state antitrust laws.
(3) There is no fraud or malice on the part of the representatives of the insurance companies, the representatives of self-insured employers, the commissioner, or their designee, or the district attorney, or their designee.
(b) (1) If an insurance company with a representative at a meeting described in subdivision (a) reasonably believes or knows that a fraudulent claim is being made based on information obtained at the meeting, the insurance company shall comply with the reporting requirement set forth in Section 1872.4.
(2) If an individual convening a meeting described in subdivision (a) reasonably believes or knows that a fraudulent claim is being made based on information obtained at the meeting, the individual shall share information obtained from the meeting with the commissioner or with any relevant district attorney, as appropriate, pursuant to the terms of any memorandum of understanding between the department and the district attorney.
(c) If a district attorney or their designee convenes a meeting described in subdivision (a), they shall notify the department prior to the meeting and the deputy commissioner of the department’s Enforcement Branch or their designees may attend the meeting.