Bill Text: CA AB2490 | 2009-2010 | Regular Session | Enrolled

California Assembly Bill 2490 (Prior Session Legislation)

Bill Title: Workers' compensation insurance: dispute resolution:

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Vetoed) 2010-09-30 - Vetoed by Governor. [AB2490 Detail]

Download: California-2009-AB2490-Enrolled.html

BILL NUMBER: AB 2490	ENROLLED
	BILL TEXT

	PASSED THE SENATE  AUGUST 30, 2010
	PASSED THE ASSEMBLY  AUGUST 31, 2010
	AMENDED IN SENATE  AUGUST 20, 2010
	AMENDED IN ASSEMBLY  MAY 20, 2010
	AMENDED IN ASSEMBLY  APRIL 27, 2010
	AMENDED IN ASSEMBLY  APRIL 6, 2010

INTRODUCED BY   Assembly Member Jones

                        FEBRUARY 19, 2010

   An act to add Section 11658.5 to the Insurance Code, relating to
workers' compensation insurance.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2490, Jones. Workers' compensation insurance: dispute
resolution: arbitration clauses.
   Existing law requires that a workers' compensation insurance
policy or endorsement not be issued by an insurer unless the insurer
files a copy of the form or endorsement with the rating organization
and 30 days have expired from the date the form or endorsement is
received by the commissioner from the rating organization without
notice from the commissioner, unless the commissioner gives written
approval of the form or the endorsement prior to that time.
   This bill would require that any agreement, other than a
settlement agreement resolving a particular dispute, between an
employer, whose principal place of business is in California, and a
workers' compensation insurer concerning resolution of disputes,
including, but not limited to, an arbitration clause arising out of a
workers' compensation policy or endorsement, shall be part of the
form or endorsement filed with the rating organization, shall be
provided to the employer contemporaneously with any written quote
that offers to provide insurance coverage, and shall contain
provisions to resolve disputes that arise in this state in the
California courts and under California law. The bill would provide,
however, that prior to the inception of the policy, employers and
workers' compensation insurance companies may, after freely
negotiating, expressly agree to a choice of law or a choice of forum
other than California. Failure to observe those requirements would
render any dispute resolution provision void and unenforceable.



THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  The Legislature finds and declares all of the
following:
   (a) All California employers subject to the Workers' Compensation
Law are required by law to obtain insurance for their employees.
   (b) Workers' compensation policies and endorsements are highly
regulated and designed primarily to protect the worker and ensure
prompt payment of claims.
   (c) The Legislature has authorized the Insurance Commissioner
(commissioner) to oversee the form and substance of all workers'
compensation insurance policies and endorsements.
   (d) Insurance companies providing workers' compensation policies
and endorsements are required by law to file the policies and
endorsements with the rating organization for transfer to the
commissioner.
   (e) Disputes between employers and insurance companies regarding
workers' compensation plans can arise, and resolution of these
disputes through litigation can be expensive, uncertain, and time
consuming.
   (f) In an effort to save time and costs, and because of the
uncertainty of litigation, workers' compensation carriers and
employers use arbitration to resolve disputes.
   (g) California has a compelling state interest in ensuring that
workers' compensation policies and endorsements are enforced under
California law and not subject to interpretation by other
jurisdictions, and that any dispute resolution proceedings are
conducted within its borders.
   (h) Employers and workers' compensation carriers should be freely
able to negotiate and agree to the terms of arbitration without
undermining the protections afforded to California employers under
California law.
  SEC. 2.  Section 11658.5 is added to the Insurance Code, to read:
   11658.5.  (a) Any agreement, other than a settlement agreement
resolving a particular dispute, between an employer, whose principal
place of business is in California, and a workers' compensation
insurer concerning resolution of disputes, including, but not limited
to, an arbitration clause arising out of a workers' compensation
policy or endorsement shall conform to all of the following:
   (1) It shall be part of the form or endorsement filed with the
rating organization pursuant to Section 11658, and shall be provided
to the employer contemporaneously with any written quote that offers
to provide insurance coverage.
   (2) It shall contain a choice of law provision that identifies
California law as the law to be used to resolve any dispute that
arises in California.
   (3) It shall contain a forum selection provision that identifies
California as the proper venue for any proceeding regarding a dispute
that arises in California.
   (4) Notwithstanding paragraphs (2) and (3), prior to the inception
of the policy, employers and workers' compensation insurance
companies may, after freely negotiating, expressly agree to a choice
of law or a choice of forum other than California.
   (b) Failure to observe the requirements of this section shall
render any dispute resolution provision void and unenforceable.