Bill Text: CA AB299 | 2009-2010 | Regular Session | Chaptered
Bill Title: Insurance.
Spectrum: Slight Partisan Bill (Democrat 6-3)
Status: (Passed) 2009-10-11 - Chaptered by Secretary of State - Chapter 234, Statutes of 2009. [AB299 Detail]
Download: California-2009-AB299-Chaptered.html
BILL NUMBER: AB 299 CHAPTERED
BILL TEXT
CHAPTER 234
FILED WITH SECRETARY OF STATE OCTOBER 11, 2009
APPROVED BY GOVERNOR OCTOBER 11, 2009
PASSED THE SENATE AUGUST 27, 2009
PASSED THE ASSEMBLY SEPTEMBER 1, 2009
AMENDED IN SENATE JULY 15, 2009
AMENDED IN SENATE JULY 2, 2009
INTRODUCED BY Committee on Insurance (Coto (Chair), Garrick (Vice
Chair), Blakeslee, Carter, Feuer, Hayashi, Nava, Niello, and Torres)
FEBRUARY 17, 2009
An act to amend Sections 706.7, 730, 735.5, 736, 900.2, 942, 1170,
1182, 1197, 1215.5, 11136, 11580.011, and 12968 of, and to amend and
renumber Section 10123.83 of, the Insurance Code, relating to
insurance.
LEGISLATIVE COUNSEL'S DIGEST
AB 299, Committee on Insurance. Insurance.
Existing law provides that the Insurance Commissioner shall
annually mail to every domestic insurer a report specifying the
reciprocal states.
This bill would provide that every 4 years the commissioner shall
mail to every domestic insurer a report specifying the reciprocal
states.
Existing law provides that at specified times the commissioner
may, and at specified times shall, examine the business and affairs
of insurers. In conducting an examination the commissioner shall
consider the results of specified data, reports, and criteria.
This bill would add other criteria that the commissioner must
consider and would allow the consideration of any other criteria
deemed appropriate by the commissioner.
Existing law provides that the commissioner may disclose the
content of an examination report, preliminary examination report or
results, or any matter relating thereto, to the insurance department
of this or any other state or country, or to law enforcement
officials of this or any other state or agency of the federal
government at any time, or to the National Association of Insurance
Commissioners (NAIC), as specified.
This bill would add market analysis data to the information that
the commissioner may disclose, as specified.
Existing law provides that all examinations shall be at the
expense of the insurer, organization, or person examined, except that
special examinations which are in addition to regular examinations
may be at the expense of the state in the discretion of the
commissioner.
This bill would provide that all analyses performed pursuant to
the provisions discussed above authorizing examinations by the
commissioner would be at the expense of the insurer, as specified.
Existing law provides that all insurers doing business in this
state shall have an annual audit by an independent certified public
accountant. The audit shall be conducted and the audit report
prepared and filed in conformity with the Annual Audited Financial
Reports instructions contained in the annual statement instructions
as adopted from time to time by the NAIC. Existing law authorizes the
commissioner to grant a 30-day extension of the filing date upon a
showing of substantial cause. Existing law requires an insurer to
submit a request for an extension 20 days prior to the date the audit
is due.
This bill would provide that the annual audit, including required
auditor and management reporting, the audit committee and its
membership, and any other aspects of the audit content and process be
conducted in conformity with the standards adopted by the NAIC. The
bill would instead authorize the commissioner to grant multiple
30-day extensions, as specified. This bill would require an insurer
to submit a request for an extension 10 days prior to the date the
audit is due.
Existing law provides that domestic incorporated insurers may
invest in an account or accounts in one or more banks or savings and
loan associations to the extent the account or accounts are insured
by an agency or instrumentality of the federal government, as
specified.
This bill would add credit unions to the financial institutions in
which domestic incorporated insurers may invest.
Existing law provides that excess funds investments shall not be
made in a loan to any one borrower, as defined, in an amount
exceeding 10% of the capital stock and surplus or 1% of the admitted
assets of the lending insurer, whichever amount is greater.
This bill would provide that excess fund investments shall not be
made in a loan or any other obligation to any one borrower or
obligor, as specified.
Existing law prohibits domestic insurers or commercially domiciled
insurers from entering into specified transactions unless they have
notified the Insurance Commissioner of their intent to enter into the
transaction in advance of entering into the transaction and the
commissioner fails to prohibit the transaction, as specified.
This bill would specify that tax sharing agreements are among the
types of transactions for which the insurer would have to give the
commissioner advanced notification of its intent to enter into the
transaction, as specified.
Existing law defines a fraternal benefit society as an
incorporated society or supreme lodge without capital stock conducted
solely for the benefit of its members and members' beneficiaries and
not for profit. Under existing law, a fraternal benefit society may
issue certificates of insurance providing for the payment of life and
disability insurance benefits, as specified. Existing law requires
fraternal benefit societies to use, among other tables, mortality
tables approved by regulation promulgated by the Insurance
Commissioner for purposes of determining actuary values, as
specified.
This bill would, in addition, authorize fraternal benefit
societies to use mortality tables approved by bulletin issued by the
commissioner for purposes of determining actuary values, as
specified.
Existing law provides that every policy of automobile liability
insurance, as specified, or collision coverage, as specified, shall
provide coverage for replacement of a child passenger restraint
system (child seat) that was in use by a child during an accident for
which liability coverage under the policy is applicable due to the
liability of an insured. Existing law provides that upon the filing
of a claim for replacement, unless otherwise determined, an insurer
shall have an obligation to ask whether a child seat was in use by a
child during an accident that is covered by the policy, and must
replace the child seat if it was in use by a child during the
accident or reimburse the claimant for the cost of purchasing a new
child seat.
This bill would provide that every policy of automobile liability
insurance, as specified, shall provide coverage for replacement of a
child seat that was damaged in a covered accident, and that every
policy that provides collision coverage, as defined, shall include a
child seat within the definition of covered property, as specified.
This bill would provide that upon the filing of a claim for
replacement, unless otherwise determined, an insurer would have an
obligation to ask whether a child seat was in use by a child during
an accident or was in the vehicle at the time of a loss that is
covered by the policy, and must replace the child seat or reimburse
the claimant for the costs of buying a new child seat if it was in
use by a child during the accident or if it sustained a covered loss
while in the vehicle.
Existing law requires the Department of Insurance to display
public pleadings, orders, or documents relating to a formal
enforcement action against a licensee on its Internet Web site, as
specified.
This bill would require the department to remove any pleading,
order, or document from, or post a clarifying statement on, its
Internet Web site regarding any displayed pleading, order, or
document when the relevant enforcement action against a licensee is
withdrawn, as specified.
This bill would also make changes to obsolete cross-references in
insurance provisions.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 706.7 of the Insurance Code is amended to read:
706.7. As used in this section, the term "reciprocal state" means
a state the laws of which prohibit an insurer domiciled therein from
insuring the lives or persons of residents of, or property or
operations located in, the State of California unless it then holds a
valid and subsisting certificate of authority issued by the
Insurance Commissioner of this state. This prohibition may be subject
to the exceptions herein set forth.
Subject to the exceptions herein set forth, a domestic insurer
shall not enter into a contract of insurance upon the life or person
of a resident of, or property or operations located in, a reciprocal
state unless it is authorized pursuant to the laws of that state to
transact such insurance therein. The commissioner shall, every four
years, mail notice to every domestic insurer, specifying the
reciprocal states.
The exceptions to the provisions of this section are the
following:
(a) Contracts entered into where the prospective insurant is
personally present in the state in which the insurer is authorized to
transact insurance when he or she signs the application.
(b) The issuance of certificates under a lawfully transacted group
life or group disability policy, where the master policy was entered
into in a state in which the insurer was then authorized to transact
insurance.
(c) The renewal or continuance in force, with or without
modification, of contracts otherwise lawful and which were not
originally executed in violation of this section.
SEC. 2. Section 730 of the Insurance Code is amended to read:
730. (a) The commissioner, whenever he or she deems necessary or
whenever he or she is requested by verified petition, signed by 25
persons interested as shareholders, policyholders, or creditors of
any admitted insurer showing that the insurer is insolvent under this
code, or upon information that any insurer has violated any
provision of Article 7 (commencing with Section 800), shall examine
the business and affairs of the insurer. The commissioner shall so
examine every domestic insurer before issuing to it a certificate of
authority other than a renewal.
(b) The commissioner may conduct an examination under this article
of any company as often as the commissioner in his or her discretion
deems appropriate but shall, at a minimum, conduct an examination of
every insurer admitted in this state not less frequently than once
every five years. In scheduling and determining the nature, scope,
and frequency of the examinations, the commissioner shall consider
the results of financial statement analyses and ratios, changes in
management or ownership, actuarial opinions, reports of independent
certified public accountants, market analysis results, including
consumer complaint analysis, evaluation of ongoing regulatory
activities, analysis of data derived from industry surveys or
interrogatories, and other criteria as set forth in the Examiner's
Handbook or in the Market Regulation Handbook adopted by the National
Association of Insurance Commissioners which are in effect when the
commissioner exercises discretion under this section.
(c) For purposes of completing an examination of any company under
this article, the commissioner may examine or investigate any
person, or the business of any person, insofar as the examination or
investigation is, in the discretion of the commissioner, necessary or
material to the examination of the company.
(d) In lieu of an examination under this article of any foreign or
alien insurer admitted in this state, the commissioner may accept an
examination report on the company as prepared by the insurance
department of the company's state of domicile or port-of-entry state
until January 1, 1994. Thereafter, these reports may only be accepted
if (1) the insurance department was at the time of the examination
accredited under the National Association of Insurance Commissioner's
Financial Regulation Standards and Accreditation Program, or (2) the
examination is performed under the supervision of an accredited
insurance department or with the participation of one or more
examiners who are employed by an accredited state insurance
department and who, after a review of the examination work papers and
report, state under oath that the examination was performed in a
manner consistent with the standards and procedures required by their
insurance department.
SEC. 3. Section 735.5 of the Insurance Code is amended to read:
735.5. (a) Nothing contained in this article shall be construed
to limit the commissioner's authority to use and, if appropriate, to
make public, any final or preliminary examination report, any
examiner or company workpapers or other documents, or any other
information discovered or developed during the course of any
examination in the furtherance of any legal or regulatory action
which the commissioner may, in his or her discretion, deem
appropriate.
(b) Nothing contained in this code shall prevent or be construed
as prohibiting the commissioner from disclosing the content of an
examination report, preliminary examination report or results, market
analysis data, or any matter relating thereto, to the insurance
department of this or any other state or country, or to law
enforcement officials of this or any other state or agency of the
federal government at any time, or to the National Association of
Insurance Commissioners, provided the recipient of the report or
matters relating thereto agrees in writing to hold it confidential
and in a manner consistent with this article, unless the prior
written consent of the company to which it pertains has been
obtained.
(c) All working papers, recorded information, documents, and
copies thereof produced by, obtained by, or disclosed to the
commissioner or any other person in the course of an examination made
pursuant to this article shall be given confidential treatment and
are not subject to subpoena and shall not be made public by the
commissioner or any other person, except to the extent provided in
subdivision (a) or (b).
SEC. 4. Section 736 of the Insurance Code is amended to read:
736. All examinations and analyses performed pursuant to Section
730 shall be at the expense of the insurer, organization, or person
examined, except that special examinations which are in addition to
regular examinations may be at the expense of the state in the
discretion of the commissioner. The costs and expenses of all of
those examinations shall be paid from the support appropriation for
the Department of Insurance current at the time of the examination
but shall be charged to and collected from the insurer, organization
or person examined. If any insurer, organization, or person refuses
to pay those costs and expenses promptly when due, the commissioner
may refuse to issue its certificate of authority, certificate of
exemption, or license, as the case may be, and may revoke any
existing certificate of authority, certificate of exemption, or
license.
SEC. 5. Section 900.2 of the Insurance Code is amended to read:
900.2. (a) All insurers doing business in this state shall have
an annual audit by an independent certified public accountant. The
audit, including required auditor and management reporting, the audit
committee and its membership, and other aspects of the audit content
and process, shall be conducted, and the audit report prepared and
filed, in conformity with the standards adopted by the National
Association of Insurance Commissioners.
(b) The commissioner may grant 30-day extensions of the filing
date upon a showing by the insurer and its independent certified
public accountant of the reasons for requesting each extension and
the determination by the commissioner of substantial cause for an
extension. The request for an extension shall be submitted in writing
not less than 10 days prior to the due date in sufficient detail to
permit the commissioner to make an informed decision on the requested
extension.
(c) The commissioner may promulgate regulations to further the
purposes of this section.
SEC. 6. Section 942 of the Insurance Code is amended to read:
942. The commissioner shall permit a deposit of those securities
in the State Treasury, subject to the provisions of Section 11691, if
applicable. The securities deposited with the Treasurer shall be
maintained in electronic book entry or certificate form as security
for policyholders or policyholders and creditors of the insurer to
whom they respectively belong. The state is responsible for the
custody and safe return of any money or securities so deposited. The
Treasurer shall deposit these moneys under the provisions of Sections
16370 and 16375 of the Government Code.
SEC. 7. Section 1170 of the Insurance Code is amended to read:
1170. Domestic incorporated insurers may invest their assets in
the purchase of any of the securities specified in this article, or
in loans upon such securities, if those purchases or loans conform to
all the following conditions:
(a) Such securities are not in default as to principal or interest
at the date of investment.
(b) In the case of a purchase, the purchase price does not exceed
the market value of the securities at the date of investment.
(c) In the case of a loan not governed by the provisions of
Section 1194.81, the amount loaned does not exceed eighty-five per
cent of such market value at the date of investment.
SEC. 8. Section 1182 of the Insurance Code is amended to read:
1182. Domestic incorporated insurers may invest in an account or
accounts in one or more banks, savings and loan associations, or
credit unions to the extent the account or accounts are insured by an
agency or instrumentality of the federal government. As used in this
section, an account may include a certificate of deposit.
SEC. 9. Section 1197 of the Insurance Code is amended to read:
1197. Excess funds investments shall not be made in a loan or any
other obligation to any one borrower or obligor, including all
affiliates which shall be treated as one borrower or obligor, in an
amount exceeding 10 percent of the capital stock and surplus or 1
percent of the admitted assets of the lending insurer, whichever
amount is greater.
SEC. 10. Section 1215.5 of the Insurance Code is amended to read:
1215.5. (a) Transactions by registered insurers with their
affiliates are subject to the following standards:
(1) The terms shall be fair and reasonable.
(2) Charges or fees for services performed shall be reasonable.
(3) Expenses incurred and payment received shall be allocated to
the insurer in conformity with customary insurance accounting
practices consistently applied.
(4) The books, accounts, and records of each party to all
transactions shall be so maintained as to clearly and accurately
disclose the precise nature and details of the transactions,
including accounting information that is necessary to support the
reasonableness of the charges or fees to the parties.
(5) The insurer's policyholder's surplus following any dividends
or distributions to shareholder affiliates shall be reasonable in
relation to the insurer's outstanding liabilities and adequate to its
financial needs.
(b) The following transactions involving a domestic insurer or
commercially domiciled insurer, as defined in Section 1215.13, and
any person in its holding company system, may be entered into only if
the insurer has notified the commissioner in writing of its
intention to enter into the transaction at least 30 days prior
thereto, or a shorter period as the commissioner may permit, and the
commissioner has not disapproved it within that period. The
commissioner shall require the payment of one thousand eight hundred
eighty-nine dollars ($1,889) as a fee for filings under this
subdivision. The payment shall accompany the filing.
(1) Sales, purchases, exchanges, loans, extensions of credit, or
investments, if the transactions are equal to or exceed:
(A) For a nonlife insurer, the lesser of 3 percent of the insurer'
s admitted assets or 25 percent of the policyholder's surplus as of
the preceding December 31st.
(B) For a life insurer, 3 percent of the insurer's admitted assets
as of the preceding December 31st.
(2) Loans or extensions of credit to a person who is not an
affiliate, if made with the agreement or understanding that the
proceeds of the transactions, in whole or in substantial part, are to
be used to make loans or extensions of credit to, to purchase assets
of, or to make investments in, any affiliate of the insurer, if the
transactions are equal to or exceed:
(A) For a nonlife insurer, the lesser of 3 percent of the insurer'
s admitted assets or 25 percent of the policyholder's surplus as of
the preceding December 31st.
(B) For a life insurer, 3 percent of the insurer's admitted assets
as of the preceding December 31st.
(3) Reinsurance agreements or modifications thereto in which the
reinsurance premium or a change in the insurer's liabilities equals
or exceeds 5 percent of the insurer's policyholder's surplus, as of
the preceding December 31st, including those agreements that may
require as consideration the transfer of assets from an insurer to a
nonaffiliate, if an agreement or understanding exists between the
insurer and nonaffiliate that any portion of the assets will be
transferred to one or more affiliates of the insurer.
(4) All management agreements, service contracts, tax sharing
agreements, and cost-sharing arrangements. However, subscription
agreements or powers of attorney executed by subscribers of a
reciprocal or interinsurance exchange are not required to be reported
pursuant to this section if the form of the agreement was in use
before 1943 and was not amended in any way to modify payments, fees,
or waivers of fees or otherwise substantially amended after 1943.
Payment or waiver of fees or other amounts due under subscription
agreements or powers of attorney forms that were in use before 1943
and that have not been amended in any way to modify payments, fees,
or waiver of fees, or otherwise substantially amended after 1943
shall not be subject to regulation pursuant to paragraph (2) of
subdivision (a).
(5) Guarantees when initiated or made by a domestic or
commercially domiciled insurer, provided that a guarantee that is
quantifiable as to amount is not subject to the notice requirements
of this paragraph unless it exceeds the lesser of one-half of 1
percent of the insurer's admitted assets or 10 percent of surplus as
regards policyholders as of the 31st day of December next preceding.
Further, all guarantees that are not quantifiable as to amount are
subject to the notice requirements of this paragraph.
(6) Derivative transactions or series of derivative transactions.
The written filing to the commissioner shall include the type or
types of derivative transactions, the affiliate or affiliates
engaging with the insurer in the derivative transactions, the
objective and the rationale for the derivative transaction or series
of derivative transactions, the maximum maturity and economic effect
of the derivative transactions, and any other information required by
the commissioner. Derivative transactions entered into pursuant to
this subdivision shall comply with the provisions of Section 1211.
(7) Direct or indirect acquisitions or investments in a person
that controls the insurer or in an affiliate of the insurer in an
amount that, together with its present holdings in those investments,
exceeds 2.5 percent of the insurer's policyholder's surplus. Direct
or indirect acquisitions or investments in subsidiaries acquired
under Section 1215.1, or in nonsubsidiary insurance affiliates that
are subject to the provisions of this article, or in subsidiaries
acquired pursuant to Section 1199, are exempt from this requirement.
(8) Any material transactions, specified by regulation, that the
commissioner determines may adversely affect the interests of the
insurer's policyholders.
(c) A domestic insurer may not enter into transactions that are
part of a plan or series of transactions with persons within the
holding company system if the purpose of those transactions is to
avoid the statutory threshold amount and thus avoid review. If the
commissioner determines that separate transactions were entered into
over any 12-month period to avoid review, the commissioner may
exercise his or her authority under Section 1215.10.
(d) The commissioner, in reviewing transactions under subdivision
(b), shall consider whether the transactions comply with the
standards set forth in subdivision (a) and whether they may adversely
affect the interests of policyholders.
(e) The commissioner shall be notified within 30 days of any
investment by the insurer in any one corporation if the total
investment in the corporation by the insurance holding company system
exceeds 10 percent of the corporation's voting securities.
(f) For purposes of this article, in determining whether an
insurer's policyholder's surplus is reasonable in relation to the
insurer's outstanding liabilities and adequate to its financial
needs, the following factors, among others, shall be considered:
(1) The size of the insurer, as measured by its assets, capital
and surplus, reserves, premium writings, insurance in force, and
other appropriate criteria.
(2) The extent to which the insurer's business is diversified
among the several lines of insurance.
(3) The number and size of risks insured in each line of business.
(4) The extent of the geographical dispersion of the insurer's
insured risks.
(5) The nature and extent of the insurer's reinsurance program.
(6) The quality, diversification, and liquidity of the insurer's
investment portfolio.
(7) The recent past and projected future trend in the size of the
insurer's investment portfolio.
(8) The recent past and projected future trend in the size of the
insurer's surplus, and the policyholder's surplus maintained by other
comparable insurers.
(9) The adequacy of the insurer's reserves.
(10) The quality and liquidity of investments in subsidiaries made
under Section 1215.1. The commissioner may treat any such investment
as a disallowed asset for purposes of determining the adequacy of
the policyholder's surplus whenever, in his or her judgment, the
investment so warrants.
(11) The quality of the company's earnings and the extent to which
the reported earnings include extraordinary accounting items.
(g) No insurer subject to registration under Section 1215.4 shall
pay any extraordinary dividend or make any other extraordinary
distribution to its stockholders until 30 days after the commissioner
has received notice of the declaration thereof and has approved the
payment or has not, within the 30-day period, disapproved the
payment.
For purposes of this section, an extraordinary dividend or
distribution is any dividend or distribution which, together with
other dividends or distributions made within the preceding 12 months,
exceeds the greater of (1) 10 percent of the insurer's policyholder'
s surplus as of the preceding December 31st, or (2) the net gain from
operations of the insurer, if the insurer is a life insurer, or the
net income, if the insurer is not a life insurer, for the 12-month
period ending the preceding December 31st.
Notwithstanding any other provision of law, an insurer may declare
an extraordinary dividend or distribution that is conditional upon
the commissioner's approval. The declaration confers no rights upon
stockholders until the commissioner has approved the payment of the
dividend or distribution or until the commissioner has not
disapproved the payment within the 30-day period referred to in this
subdivision.
(h) Notwithstanding the control of a domestic insurer by any
person, the officers and directors of the insurer shall not thereby
be relieved of any obligation or liability to which they would
otherwise be subject to by law, and the insurer shall be managed to
ensure its separate operating identity consistent with the provisions
of this article. However, nothing in this article shall preclude a
domestic insurer from having or sharing a common management or
cooperative or joint use of personnel, property, or services with one
or more other persons under arrangements meeting the standards of
subdivision (a).
(i) The provisions of this section do not apply to any insurer,
information, or transaction exempted by the commissioner.
SEC. 11. Section 10123.83 of the Insurance Code, as added by
Section 2 of Chapter 839 of the Statutes of 1998, is amended and
renumbered to read:
10123.835. (a) Every individual or group policy of disability
insurance that covers hospital, medical, or surgical benefits that is
issued, amended, or renewed on or after January 1, 1999, shall be
deemed to provide coverage for the screening and diagnosis of
prostate cancer, including, but not limited to, prostate-specific
antigen testing and digital rectal examinations, when medically
necessary and consistent with good professional practice.
(b) Nothing in this section shall be construed to require an
individual or group policy to cover the surgical and other procedures
known as radical prostatectomy, external beam radiation therapy,
radiation seed implants, and combined hormonal therapy, or to prevent
application of deductible or copayment provisions contained in the
policy, nor shall this section be construed to require that coverage
under an individual or group policy be extended to any other
procedures.
(c) This section shall not apply to specified accident, specified
disease, hospital indemnity, Medicare supplement, or long-term care
health insurance policies.
SEC. 12. Section 11136 of the Insurance Code is amended to read:
11136. Except as otherwise provided in Section 10489.4, such
valuation shall be certified by a competent actuary or, at the
expense of the society, verified by the actuary of the insurance
supervisory official of the state of domicile of the society, and the
legal minimum standard of valuation shall be as follows:
(a) All benefits promised by certificates issued prior to
September 22, 1952, and the rates therefor shall be valued in
accordance with the provisions of law applicable thereto as of the
date of issuance, but not lower than the standards and interest
assumptions used in the calculation of rates for such benefits.
(b) The minimum standard for the valuation of all certificates
issued after September 21, 1952, and prior to January 1, 1972, shall
be 3 percent per annum interest; in the case of certificates issued
on and after January 1, 1972, and prior to January 1, 1980, the
minimum standard for the valuation of all such certificates shall be
4 percent per annum interest; and in the case of certificates issued
on and after January 1, 1980, the minimum standard for the valuation
of all single premium certificates shall be 51/2 percent per annum
interest and for the valuation of all other such certificates shall
be 41/2 percent per annum interest, and the following tables:
(1) For all ordinary certificates of life insurance issued on the
standard basis, excluding any disability and accidental death
benefits in such certificates--the American Men Ultimate Table of
Mortality, with Bowerman's or Davis' Extension thereof, or, at the
option of the society, the Commissioners 1941 Standard Ordinary
Mortality Table or the Commissioners 1958 Standard Ordinary Mortality
Table, using actual age of the insured for male risks and an age not
more than six years younger than the actual age of the insured for
female risks, and for such policies issued on or after the operative
date of Section 10163.2 (i) the Commissioners 1980 Standard Ordinary
Mortality Table, or (ii) at the election of the company for any one
or more specified plans of life insurance, the Commissioners 1980
Standard Ordinary Mortality Table with Ten-Year Select Mortality
Factors, or (iii) any ordinary mortality table, adopted after 1980 by
the National Association of Insurance Commissioners, or its
successor, that is approved by regulation promulgated or bulletin
issued by the commissioner for use in determining the minimum
standard of valuation for such policies.
(2) For all industrial life insurance certificates issued on the
standard basis, excluding any disability and accidental death
benefits in such certificates--the 1941 Standard Industrial Mortality
Table, for such certificates issued prior to the operative date of
Section 10163.2, and for such policies issued on or after such
operative date, the Commissioners 1961 Standard Industrial Mortality
Table or any industrial mortality table, adopted after 1980 by the
National Association of Insurance Commissioners, or its successor,
that is approved by regulation promulgated or bulletin issued by the
commissioner for use in determining the minimum standard of valuation
for such policies.
(3) For annuity and pure endowment certificates, excluding any
disability and accidental death benefits in such certificates--the
1937 Standard Annuity Mortality Table, or the Annuity Mortality Table
for 1949 Ultimate, or the Individual Annuity Mortality Table for
1971, or any individual annuity mortality table, adopted after 1980
by the National Association of Insurance Commissioners, or its
successor, that is approved by regulation promulgated or bulletin
issued by the commissioner for use in determining the minimum
standard of valuation for such contracts, or any modification of any
of these tables approved by the commissioner.
(4) For disability benefits in or supplementary to ordinary
certificates--Hunter's Disability Table or the Class 3 Disability
Table (1926), modified to conform to the contractual waiting period,
or the tables of Period 2 disablement rates and the 1930 to 1950
termination rates of the 1952 Disability Study of the Society of
Actuaries with due regard to the type of benefit, or the 1964
Commissioners Disability Table, or any tables of disablement rates
and termination rates, adopted after 1980 by the National Association
of Insurance Commissioners, or its successor, that are approved by
regulation promulgated or bulletin issued by the commissioner for use
in determining the minimum standard of valuation for such policies.
Any such table shall, for active lives, be combined with a mortality
table permitted for calculating the reserves for life insurance
certificates.
(5) For accidental death benefits in or supplementary to
certificates--The Inter-Company Double Indemnity Mortality Table or
the 1959 Accidental Death Benefits Table, or any accidental death
benefits table, adopted
after 1980 by the National Association of Insurance Commissioners, or
its successor, that is approved by regulation promulgated or
bulletin issued by the commissioner for use in determining the
minimum standard of valuation for such policies. Any such table shall
be combined with a mortality table permitted for calculating the
reserves for life insurance certificates.
(6) For temporary accident and health benefits in or supplementary
to certificates--Class 3 Disability Table (1926) with Conference
Modifications or the 1964 Commissioners Disability Table, or any
tables of disablement rates and termination rates, adopted after 1980
by the National Association of Insurance Commissioners, or its
successor, that are approved by regulation promulgated or bulletin
issued by the commissioner for use in determining the minimum
standard of valuation for such policies.
(7) For life insurance issued upon the substandard basis and other
special benefits--such tables as may be approved by the
commissioner.
(c) The commissioner may, in his discretion, accept other
standards for valuation if he finds that the reserves produced
thereby will not be less in the aggregate than reserves computed in
accordance with the minimum valuation standard prescribed. Whenever
the mortality experience under the certificates valued on the same
mortality table is in excess of the expected mortality according to
such table for a period of three consecutive years, the commissioner
may require additional reserves when in his judgment deemed necessary
on account of such certificates.
(d) Notwithstanding the provisions of subdivisions (a) and (b),
any society, with the consent of the insurance supervisory official
of the state of domicile of the society, and under such conditions,
if any, which he may impose, may establish and maintain reserves on
its certificates in excess of the reserves required thereunder, but
the contractual rights of any insured member shall not be affected
thereby.
SEC. 13. Section 11580.011 of the Insurance Code is amended to
read:
11580.011. (a) As used in this section, "child passenger
restraint system" means a system as described in Section 27360 of the
Vehicle Code.
(b) Every policy of automobile liability insurance, as described
in Section 16054 of the Vehicle Code, shall provide liability
coverage for replacement of a child passenger restraint system that
was damaged or was in use by a child during an accident for which
liability coverage under the policy is applicable due to the
liability of an insured.
(c) Every policy of automobile liability insurance that provides
uninsured motorist property damage coverage, as described in
paragraph (2) of subdivision (a) of Section 11580.26, shall provide
coverage for replacement of a child passenger restraint system that
was damaged or was in use by a child during an accident for which
uninsured motorist property damage coverage under the policy is
applicable due to the liability of an uninsured motorist.
(d) Every policy that provides automobile collision coverage, as
described in Section 660, or every policy that provides automobile
physical damage coverage, as described in Section 660, shall include
a child passenger restraint system within the definition of covered
property, if the child passenger restraint system was in use by a
child during an accident or, if the child passenger restraint system
was in the vehicle and it sustained a loss covered by the policy.
(e) Upon the filing of a claim pursuant to a policy described in
subdivision (b), (c), or (d), unless otherwise determined, an insurer
shall have an obligation to ask whether a child passenger restraint
system was in use by a child during an accident or was in the vehicle
at the time of a loss that is covered by the policy, and an
obligation to replace the child passenger restraint system or
reimburse the claimant for the cost of purchasing a new passenger
restraint system in accordance with this section if it was in use by
a child during the accident or if it sustained a covered loss while
in the vehicle.
(f) An insured, upon acquiring a replacement child passenger
restraint system, may surrender the child passenger restraint system
that was replaced to the nearest office of the Department of the
California Highway Patrol.
SEC. 14. Section 12968 of the Insurance Code is amended to read:
12968. (a) Every pleading issued by the commissioner to initiate
a formal enforcement action against a licensee under this code, and
every order issued by the commissioner or a court of competent
jurisdiction or other document that resolves a formal enforcement
action, shall be displayed on the department's internet web site, if
the document is a public record that is not exempt from disclosure to
the public pursuant to the California Public Records Act (Chapter
3.5 (commencing with Section 6250) of Division 7 of Title 1 of the
Government Code).
(b) Notwithstanding Section 12969, if an enforcement action
against a licensee is withdrawn, then each pleading, document, or
order against that licensee shall be removed from the department's
Internet Web site within 30 days of the withdrawal of the action. If
a pleading, document, or order contains allegations against multiple
licensees, and the department withdraws all allegations against any
one or more of the licensees, then the department shall post, on its
Internet Web site, a statement in the previously posted pleading,
document, or order that clarifies that the enforcement action against
that specific licensee has been withdrawn.
