Bill Text: CA AB2892 | 2023-2024 | Regular Session | Amended
Bill Title: Vehicles: financial responsibility: self-insurance.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Engrossed) 2024-06-26 - From committee: Do pass and re-refer to Com. on APPR. (Ayes 15. Noes 0.) (June 25). Re-referred to Com. on APPR. [AB2892 Detail]
Download: California-2023-AB2892-Amended.html
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Amended
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April 18, 2024 |
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April 09, 2024 |
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Amended
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March 21, 2024 |
CALIFORNIA LEGISLATURE—
2023–2024 REGULAR SESSION
Assembly Bill
No. 2892
| Introduced by Assembly Member Low |
February 15, 2024 |
An act to amend Section 16053 of the Vehicle Code, relating to vehicles.
LEGISLATIVE COUNSEL'S DIGEST
AB 2892, as amended, Low.
Vehicles: financial responsibility: self-insurance.
Existing law requires all drivers and all owners of a motor vehicle to be able to establish financial responsibility, including, among other methods, as a self-insurer, as specified. Existing law authorizes the Department of Motor Vehicles, upon application, to issue a certificate of self-insurance to an applicant who has, among other requirements, more than 25 motor vehicles registered in their name. Existing law authorizes the director of the department to adopt and enforce rules and regulations as may be necessary to carry out the provisions of the Vehicle Code relating to the department. Existing regulations provide for the requirements to qualify as a self-insurer, including that the applicant provide an audited financial statement of the applicant’s net worth, as specified, that the audited financial statements cover a 3-year period immediately preceding the date of application,
and that the audited financial statements include an opinion of the applicant’s net worth and reflect a net worth of not less than $2,200,000 on the date of application.
This bill would place in the Vehicle Code specified requirements to qualify as a self-insurer, including an option for an applicant to provide a cash deposit or surety bond in specified amounts. The bill would require the applicant to maintain an insurance policy with certain entities, including a company licensed to provide insurance in California and nonadmitted insurers, as specified.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NOBill Text
The people of the State of California do enact as follows:
SECTION 1.
Section 16053 of the Vehicle Code is amended to read:16053.
(a) The department may in its discretion, upon application, issue a certificate of self-insurance when it is satisfied that the applicant in whose name more than 25 motor vehicles are registered is possessed and will continue to be possessed of ability to pay judgments obtained against them in amounts at least equal to the amounts provided in Section 16056. The certificate may be issued authorizing the applicant to act as a self-insurer for either property damage or bodily injury or both. Any person duly qualified under the laws or ordinances of any city or county to act as self-insurer and then acting as such, may upon filing with the department satisfactory evidence thereof, along with the application as may be required by the department, be entitled to receive a certificate of self-insurance.(b) Upon not less than five days’ notice and a hearing pursuant to the notice, the department may upon reasonable grounds cancel a certificate of self-insurance. Failure to pay any judgment within 30 days after the judgment has become final and has not been stayed or satisfied shall constitute a reasonable ground for the cancellation of a certificate of self-insurance.
(c) The applicant shall meet the following requirements to qualify as a self-insurer pursuant to subdivision (a):
(1) The applicant shall provide either of the following:
(A) (i) Audited
financial statements of the applicant’s net worth, including opinions of the financial condition and net worth of the applicant rendered by an independent certified public accountant.
(ii) The application for a certificate of self-insurance shall be accompanied by audited financial statements for the three-year period immediately preceding the date of application.
(iii) When an applicant has not been in existence for three years prior to the date of application, the department may accept financial statements covering the period the applicant has been in existence.
(B) A cash deposit or surety bond.
(2) (A) For purposes of subparagraph (A) of paragraph
(1), the applicant shall, on the date of the application, have a net worth in the amount required by the department at the time the applicant files for a certificate of self-insurance, as evidenced in the financial statements pursuant to subparagraph (A) of paragraph (1).
(B) For purposes of subparagraph (B) of paragraph (1), the value of the cash deposit or surety bond shall be not less than the amount required by the department when an applicant files for a certificate of self-insurance.
(3) No unsatisfied final judgments shall exist against the applicant’s name resulting from property damage or bodily injury, including death, or both, that occurred as a result of a motor vehicle accident.
(4) Maintain an insurance policy issued by a company licensed to write the policy in California, or by nonadmitted insurers as described in Section 1763 of the Insurance Code, with coverage of at least 50 percent of the minimum insurance amount required by law.
(d) Self-insurance shall not exceed 50 percent of the minimum insurance amount required by applicable law. Self-insurance may be satisfied if the applicant demonstrates one of the following covering the no-more-than-50-percent self-insurance amount:
(1) Satisfies the net worth requirements of this section.
(2) Makes a cash deposit pursuant to this section.
(3) Posts a surety bond.
(d)
(e) Evidence of the cash deposit shall be a deposit of the amount described in subparagraph (B) of paragraph (2) of subdivision (c) deposited in a bank authorized to do business in this state and insured by the Federal Deposit Insurance Corporation or a credit union authorized to do business in this state and insured by the National Credit Union Administration. This deposit shall be assigned to, accepted by, and maintained by the department, upon those terms as the department may prescribe, until released by the department upon termination or expiration of the certificate of self-insurance.
(e)
(f) Evidence of the surety bond shall be a bond in the amount described in subparagraph (B) of paragraph (2) of subdivision (c) issued in favor of the department by a surety company licensed to do business in this state. The surety bond shall remain in force until released by the department upon termination or expiration of the certificate of self-insurance.
