Bill Text: CA AB679 | 2009-2010 | Regular Session | Introduced

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Bill Title: Insurance: adverse underwriting decisions.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2010-02-02 - From committee: Filed with the Chief Clerk pursuant to Joint Rule 56. [AB679 Detail]

Download: California-2009-AB679-Introduced.html

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BILL NUMBER: AB 679	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Garrick

                        FEBRUARY 26, 2009

   An act to amend Section 791.10 of the Insurance Code, relating to
insurance.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 679, as introduced, Garrick. Insurance: adverse underwriting
decisions.
   Existing law requires an insurance company or agent to provide an
applicant or policyholder the reasons for an adverse underwriting
decision in writing or to advise him or her orally that he or she may
receive the reasons in writing if he or she so requests.
   This bill would, instead, state that if the insurance company or
agent chooses to give the oral advisement, the advisement must be
that the applicant or policyholder will receive the reasons in
writing if he or she requests.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


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

  SECTION 1.  Section 791.10 of the Insurance Code is amended to
read:
   791.10.  (a) In the event of an adverse underwriting decision the
insurance institution or agent responsible for the decision shall:
   (1) Either provide the applicant, policyholder, or individual
proposed for coverage with the specific reason or reasons for the
adverse underwriting decision in writing or, except as provided in
subdivision (e), advise the person that upon written request he or
she  may   shall  receive the specific
reason or reasons in writing.
   (2) Provide the applicant, policyholder or individual proposed for
coverage with a summary of the rights established under subdivision
(b) and Sections 791.08 and 791.09.
   (b) Upon receipt of a written request within 90 business days from
the date of the mailing of notice or other communication of an
adverse underwriting decision to an applicant, policyholder or
individual proposed for coverage, the insurance institution or agent
shall furnish to such person within 21 business days from the date of
receipt of such written request:
   (1) The specific reason or reasons for the adverse underwriting
decision, in writing, if such information was not initially furnished
in writing pursuant to paragraph (1) of subdivision (a).
   (2) The specific items of personal and privileged information that
support those reasons; provided, however:
   (A) The insurance institution or agent shall not be required to
furnish specific items of privileged information if it has a
reasonable suspicion, based upon specific information available for
review by the commissioner, that the applicant, policyholder or
individual proposed for coverage has engaged in criminal activity,
fraud, material misrepresentation or material nondisclosure.
   (B) Specific items of medical record information supplied by a
medical care institution or medical professional shall be disclosed
either directly to the individual about whom the information relates
or to a medical professional designated by the individual and
licensed to provide medical care with respect to the condition to
which the information relates, whichever the individual prefers.
   Mental health record information shall be supplied directly to the
individual, pursuant to this subdivision, only with the approval of
the qualified professional person with treatment responsibility for
the condition to which the information relates.
   (3) The names and addresses of the institutional sources that
supplied the specific items of information given pursuant to
paragraph (2) of subdivision (b); provided, however, that the
identity of any medical professional or medical care institution
shall be disclosed either directly to the individual or to the
designated medical professional, whichever the individual prefers.
   (c) The obligations imposed by this section upon an insurance
institution or agent may be satisfied by another insurance
institution or agent authorized to act on its behalf.
   (d) When an adverse underwriting decision results solely from an
oral request or inquiry, the explanation of reasons and summary of
rights required by subdivision (a) or (e) may be given orally to the
extent that such information is available.
   (e) Except as provided in subdivision (d), with respect to a
declination, cancellation, or nonrenewal of a property insurance
policy covered by Section 675 or an automobile insurance policy
covered by Section 660, or an individual life, health, or disability
insurance policy, the insurance institution or agent responsible for
the decision shall provide the specific reason or reasons in writing
at the time of the decision. The communication of medical record
information for a life or health insurance policy shall be subject to
the disclosure requirements of subparagraph (B) of paragraph (2) of
subdivision (a). This subdivision shall become operative on July 1,
2006.