Bill Text: CA AB76 | 2009-2010 | Regular Session | Chaptered
Bill Title: Life and Annuity Consumer Protection Fund.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2009-08-06 - Chaptered by Secretary of State - Chapter 75, Statutes of 2009. [AB76 Detail]
Download: California-2009-AB76-Chaptered.html
BILL NUMBER: AB 76 CHAPTERED
BILL TEXT
CHAPTER 75
FILED WITH SECRETARY OF STATE AUGUST 6, 2009
APPROVED BY GOVERNOR AUGUST 5, 2009
PASSED THE SENATE JULY 16, 2009
PASSED THE ASSEMBLY JUNE 1, 2009
AMENDED IN ASSEMBLY MARCH 9, 2009
INTRODUCED BY Assembly Member Yamada
DECEMBER 17, 2008
An act to amend Section 10127.17 of the Insurance Code, relating
to life insurance and annuity products.
LEGISLATIVE COUNSEL'S DIGEST
AB 76, Yamada. Life and Annuity Consumer Protection Fund.
Existing law creates the Life and Annuity Consumer Protection Fund
as a special account within the Insurance Fund and requires that the
moneys deposited therein, from a $1 fee levied against insurers
based upon each individual life insurance and annuity product worth
$15,000 or more issued to a resident of this state, be dedicated to
protecting consumers of insurance products. Under existing law, that
provision is repealed as of January 1, 2010.
This bill would extend the operation of that provision to January
1, 2015. This bill would also require the Insurance Commissioner to
annually publish on its Internet Web site a report detailing certain
specified aspects of protections for the consumers of insurance
products.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 10127.17 of the Insurance Code is amended to
read:
10127.17. (a) The Life and Annuity Consumer Protection Fund is
hereby created as a special account within the Insurance Fund. Each
insurer admitted to transact insurance in this state shall pay a fee
to be determined by the commissioner, not to exceed one dollar ($1),
for each individual life insurance policy and each individual annuity
product that it issues to a resident of this state with a value of
fifteen thousand dollars ($15,000) or more. If an insurer elects to
charge the purchaser of a life insurance policy or annuity product
this fee, the fee shall be set forth as a separate charge in the
contract schedule or premium notice. Life insurance or annuity forms
are not required to be filed again for review as a consequence of
this provision. This fee shall be assessed on all new individual life
insurance policies and annuity products issued during the prior 12
months, and shall be deposited into the Life and Annuity Consumer
Protection Fund.
(b) Moneys in the Life and Annuity Consumer Protection Fund shall
be distributed by the commissioner and shall be exclusively dedicated
to protecting consumers of life insurance and annuity products in
this state. Moneys in the fund shall not be used for any other
purpose.
(c) Fifty percent of these funds shall be distributed within the
department for consumer protection functions related to individual
life insurance and annuity products, including, but not limited to:
(1) Investigating and prosecuting financial abuse by insurance
licensees, or persons holding themselves out to be insurance
licensees, or any person purporting to be engaged in the business of
insurance.
(2) Responding to consumer inquiries and complaints related to
life insurance or annuity products.
(3) Educating consumers in all aspects of life insurance and
annuity products, consumer protection, purchasing and using insurance
and annuity products, claim filing, benefit delivery, and dispute
resolution.
(4) Regulating and overseeing life insurance and annuity products
and advertising for these products directed toward consumers.
(d) Fifty percent of the funds shall be distributed to district
attorneys for investigating and prosecuting individual life insurance
and annuity product financial abuse cases involving insurance
licensees, or persons holding themselves out to be insurance
licensees, or any person purporting to be engaged in the business of
insurance, and for other projects beneficial to insurance consumers.
(1) The commissioner shall distribute funds to district attorneys
who are able to show a likely positive outcome that will benefit
consumers in the local jurisdiction based on specific criteria
promulgated by the commissioner. Each local district attorney
desiring a portion of those funds shall submit to the commissioner an
application, including, at a minimum:
(A) The proposed use of the moneys and the anticipated outcome.
(B) A list of all prior relevant cases or projects and a copy of
the final accounting for each. If cases or projects are ongoing, the
most recent accounting shall be provided.
(C) A detailed budget, including salaries, and general expenses,
and specifically identifying the cost of purchase or rental of
equipment or supplies.
(2) Each district attorney that receives funds pursuant to this
section shall submit a final detailed accounting at the conclusion or
closure of each case or project. For cases or projects that continue
longer than six months, interim accountings shall be submitted every
six months, or as otherwise directed by the commissioner.
(3) Each district attorney that receives funds pursuant to this
section shall submit a final report to the commissioner, that may be
made public, as to the success of the case or project conducted. The
report shall provide information and statistics on the number of
active investigations, arrests, indictments, and convictions. The
applications for moneys, the distribution of moneys, and the annual
reports shall be public documents.
(4) Notwithstanding any other provision of this section,
information submitted to the commissioner pursuant to this section
concerning criminal investigations, whether active or inactive, shall
be confidential.
(5) The commissioner may conduct a fiscal audit of the programs
administered under this subdivision. This fiscal audit shall be
conducted by an internal audit unit of the department. The cost of
any fiscal audits shall be paid for from the Life and Annuity
Consumer Protection Fund established by this section.
(6) If the commissioner determines that a district attorney is
unable or unwilling to investigate or prosecute a relevant financial
abuse case, the commissioner may discontinue distribution of funds
allocated for that matter and may redistribute those funds to other
eligible district attorneys.
(e) The funds received under this section shall be deposited in
the Life and Annuity Consumer Protection Fund within the Insurance
Fund, and shall be expended and distributed as appropriated by the
Legislature for the purposes of this section. The total amount
contained in the Life and Annuity Consumer Protection Fund shall not
exceed five million dollars ($5,000,000) annually. If, as of June 30
of any calendar year, the moneys in the fund exceed this amount, the
commissioner shall adjust the amount of the assessment for the
following year. An insurer, upon receipt of an invoice, shall
transmit payment to the department for deposit in the Life and
Annuity Consumer Protection Fund. Any balance remaining in the Life
and Annuity Consumer Protection Fund at the end of the fiscal year
shall be retained in the account and carried forward to the next
fiscal year.
(f) The commissioner may develop guidelines for implementing or
clarifying these provisions, including guidelines for the allocation,
distribution, and potential return of unused funds. The commissioner
may, from time to time, issue regulations for implementing or
clarifying these provisions.
(g) The Commissioner shall provide a consolidated report annually
on the department's Internet Web site, which shall include, but is
not limited to, the following information:
(1) The number of opened consumer complaints related to life
insurance or annuity products.
(2) The number of opened investigations related to life insurance
or annuity products.
(3) The number of investigations related to life insurance or
annuity products referred to and reported by prosecuting agencies.
(4) The number of administrative or regulatory cases related to
life insurance or annuity products referred to the department's legal
division.
(5) The number of administrative or regulatory enforcement actions
taken in cases related to life insurance or annuity products.
(6) Descriptions of education programs and efforts by the
department to educate consumers in all aspects of life insurance and
annuity products, consumer protection, purchasing and using insurance
and annuity products, claim filing, benefit delivery, and dispute
resolution.
(h) This section shall remain in effect only until January 1,
2015, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2015, deletes or extends
that date.
