Bill Text: CA SB130 | 2011-2012 | Regular Session | Introduced
Bill Title: Insurance: fraud prevention.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2012-01-31 - Returned to Secretary of Senate pursuant to Joint Rule 56. [SB130 Detail]
Download: California-2011-SB130-Introduced.html
BILL NUMBER: SB 130 INTRODUCED
BILL TEXT
INTRODUCED BY Senator Gaines
JANUARY 27, 2011
An act to amend Section 1872.8 of the Insurance Code, relating to
insurance.
LEGISLATIVE COUNSEL'S DIGEST
SB 130, as introduced, Gaines. Insurance: fraud prevention.
Existing law requires an insurer doing business in this state to
pay an annual special purpose assessment to be determined by the
Insurance Commissioner, but not to exceed $1.00 annually, for each
vehicle insured under an insurance policy it issues in this state, in
order to fund increased investigation and prosecution of fraudulent
automobile insurance claims and economic automobile theft.
This bill would make technical, nonsubstantive changes to those
provisions.
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 1872.8 of the Insurance Code is amended to
read:
1872.8. (a) An insurer doing business in this state shall pay an
annual special purpose assessment to be determined by the
commissioner, but not to exceed one dollar ($1) annually, for each
vehicle insured under an insurance policy it issues in this state, in
order to fund increased investigation and prosecution of fraudulent
automobile insurance claims and economic automobile theft.
Thirty-four percent of those funds received from ninety-five cents
($0.95) of the special purpose assessment per insured vehicle shall
be distributed to the Fraud Division for enhanced investigative
efforts, 15 percent of that ninety-five cents ($0.95) shall be
deposited in the Motor Vehicle Account for appropriation to the
Department of the California Highway Patrol for enhanced prevention
and investigative efforts to deter economic automobile theft, and 51
percent of that ninety-five cents ($0.95) shall be distributed to
district attorneys for purposes of investigation and prosecution of
automobile insurance fraud cases, including fraud involving economic
automobile theft.
(b) (1) The commissioner shall award funds to district attorneys
according to population. The commissioner may alter this distribution
formula as necessary to achieve the most effective distribution of
funds. A local district attorney desiring a portion of those funds
shall submit to the commissioner an application detailing the
proposed use of any moneys that may be provided. The application
shall include a detailed accounting of assessment funds received and
expended in prior years, including, at a minimum, all of the
following:
(A) The amount of funds received and expended.
(B) The uses to which those funds were put, including payment of
salaries and expenses, purchase of equipment and supplies, and other
expenditures by type.
(C) The results achieved as a consequence of expenditures made,
including the number of investigations, arrests, complaints filed,
convictions, and the amounts originally claimed in cases prosecuted
compared to payments actually made in those cases.
(D) Other relevant information as the commissioner may reasonably
require.
A district attorney who fails to submit an application by the
deadline set by the commissioner shall be subject to loss of
distribution of the moneys. The commissioner may consider
recommendations and advice of the Fraud Division and the Commissioner
of the California Highway Patrol in allocating moneys to local
district attorneys. A district attorney that receives funds shall
submit an annual report to the commissioner, which may be made
public, as to the success of the program administered. The report
shall provide information and statistics on the number of active
investigations, arrests, indictments, and convictions. Both the
application for moneys and the distribution of moneys shall be public
documents. The commissioner shall conduct a fiscal audit of the
programs administered under this subdivision at least once every
three years. The costs of a fiscal audit shall be shared equally
between the department and the district attorney. Information
submitted to the commissioner pursuant to this section concerning
criminal investigations, whether active or inactive, shall be
confidential. If the commissioner determines that a district attorney
is unable or unwilling to investigate and prosecute automobile
insurance fraud claims as provided by this subdivision or Section
1874.8, the commissioner may discontinue the distribution of funds
allocated for that county and may redistribute those funds to other
eligible district attorneys.
(2) The Department of the California Highway Patrol shall submit
to the commissioner, for informational purposes only, a report
detailing the department's proposed use of funds under this section
and an annual report in the same format as required of district
attorneys under paragraph (1).
(c) The remaining five cents ($0.05) shall be spent for enhanced
automobile insurance fraud investigation by the Fraud Division.
(d) Except for funds to be deposited in the Motor Vehicle Account
for allocation to the Department of the California Highway Patrol for
purposes of the Motor Vehicle Theft Prevention Act (Chapter 5
(commencing with Section 10900) of Division 4 of the Vehicle Code),
the funds received under this section shall be deposited in the
Insurance Fund and be expended and distributed when appropriated by
the Legislature.
(e) In the course of its investigations, the Fraud Division shall
pursue aggressively all reported incidents of probable fraud and, in
addition, shall forward to the appropriate disciplinary body the
names of individuals licensed under the Business and Professions Code
who are suspected of actively engaging in fraudulent activity along
with all relevant supporting evidence.
(f) As used in this section, "economic automobile theft" means
automobile theft perpetrated for financial gain, including, but not
limited to, the following:
(1) Theft of a motor vehicle for financial gain.
(2) Reporting that a motor vehicle has been stolen for the purpose
of filing a false insurance claim.
(3) Engaging in any an act
prohibited by Chapter 3.5 (commencing with Section 10801) of Division
4 of the Vehicle Code.
(4) Switching of vehicle identification numbers to obtain title to
a stolen motor vehicle.
