Bill Text: CA SB240 | 2019-2020 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Insurance Adjuster Act.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2019-10-03 - Chaptered by Secretary of State. Chapter 502, Statutes of 2019. [SB240 Detail]

Download: California-2019-SB240-Amended.html

Amended  IN  Senate  April 11, 2019
Amended  IN  Senate  March 14, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Senate Bill No. 240


Introduced by Senator Dodd

February 11, 2019


An act to amend Sections 14020, 14022, and 14022.5 of, and to add Section Sections 14046 and 14047 to, the Insurance Code, relating to insurance.


LEGISLATIVE COUNSEL'S DIGEST


SB 240, as amended, Dodd. Insurance Adjuster Act.
Existing law creates the Department of Insurance, headed by the Insurance Commissioner, and prescribes the department’s powers and duties. Existing law, the Insurance Adjuster Act, sets forth various requirements with respect to operation as an insurance adjuster in this state and prohibits a person from engaging in a business regulated by the act, or acting or assuming to act as, or representing themselves to be, an insurance adjuster unless the person is licensed under the act. Existing law also prohibits a person from falsely representing that the person is employed by a licensee. Existing law exempts a person from the requirements of the Insurance Adjuster Act if the person is employed exclusively and regularly by one employer, as specified, with which the person has an employer-employee relationship. If the commissioner declares an emergency situation, existing law authorizes a nonlicensed insurance adjuster to adjust claims if certain requirements are met, including that the nonlicensed insurance adjuster registers with the commissioner via a written letter naming the nonlicensed adjuster, identifying adjuster licenses held in other jurisdictions, and stating when the claims adjusting activity began in the emergency situation. Existing law requires an insurer to provide an insured with a written status report if the insurer assigns a 3rd or subsequent adjuster to be primarily responsible for a claim within a 6-month period.
This bill would require an insurer to establish a single point of contact for the insured and provide the insured with one or more direct means of communication with the single point of contact if, within a 6-month period, the insurer assigns a 3rd or subsequent adjuster to be primarily responsible for a claim. The bill would require the single point of contact to remain assigned to the insured’s claim until the insurer determines that the claim is closed.
This bill would require the department to annually prepare and deliver to every Insurance Adjuster Act licensee a notice describing the most significant California laws pertaining to property insurance policies. The bill would exempt an individual in an employer-employee relationship from the requirements of the Insurance Adjuster Act if the individual additionally certifies, under penalty of perjury, that the individual read and understands the most recent significant law notice. The bill would require registration of a nonlicensed insurance adjuster during an emergency situation to include a self-certification, under penalty of perjury, that a nonlicensed individual has read and understands the most recent significant law notice. The bill would require a nonlicensed insurance adjuster to complete a training regarding evaluating damage caused by an emergency, catastrophe, disaster, or other similar occurrence before adjusting a claim during an emergency situation. By expanding the scope of the crime of perjury, the bill would impose a state-mandated local program. The bill would also make technical, nonsubstantive changes to those provisions.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

The people of the State of California do enact as follows:


SECTION 1.

 Section 14020 of the Insurance Code is amended to read:

14020.
 (a) A person shall not engage in a business regulated by this chapter, or act or assume to act as, or represent themselves to be, a licensee unless the person is licensed under this chapter.
(b) A person shall not falsely represent that the person is employed by a licensee.

SEC. 2.

 Section 14022 of the Insurance Code is amended to read:

14022.
 This chapter does not apply to:
(a) A person employed exclusively and regularly by one employer in connection with the affairs of that employer only, if there exists an employer-employee relationship, and if the person certifies, under penalty of perjury, that the person has read and understands the most recent notice prepared by the department pursuant to Section 14046 that describes the most significant California laws pertaining to property insurance policies.
(b) An officer or employee of the United States of America, or of this state or a political subdivision thereof, while that officer or employee is engaged in the performance of official duties.
(c) A person engaged exclusively in the business of obtaining and furnishing information as to the financial rating of persons.
(d) A charitable philanthropic society or association duly incorporated under the laws of this state, which is organized and maintained for the public good and not for private profit.
(e) An attorney performing the duties of an attorney.
(f) A licensed collection agency or an employee thereof acting within the scope of employment, while making an investigation incidental to the business of the agency, including an investigation of the location of a debtor or the debtor’s property if the contract with an assignor creditor is for the collection of claims owed or due or asserted to be owed or due or the equivalent thereof.
(g) Admitted insurers and agents and insurance brokers licensed by the state, performing duties in connection with insurance transacted by them.
(h) The legal owner of personal property that has been sold under a conditional sales agreement or a mortgagee under the terms of a chattel mortgage.
(i) A bank subject to the jurisdiction of the Commissioner of Financial Institutions of the State of California under Division 1 (commencing with Section 99) of the Financial Code or the Comptroller of the Currency of the United States.
(j) A person engaged solely in the business of securing information about persons or property from public records.
(k) A building contractor, engineer, technical expert, or other person who is engaged by an insurer or licensed adjuster to provide an expert or professional evaluation of the extent, cause, or origin of damage to the insured property, but who does not otherwise participate in the process of adjusting claims.

SEC. 3.

 Section 14022.5 of the Insurance Code is amended to read:

14022.5.
 (a) In the event of an emergency situation as declared by the commissioner, claims arising out of the emergency, catastrophe, disaster, or other similar occurrence may be adjusted by a nonlicensed adjuster upon registration with the commissioner if both all of the following requirements are met:
(1) The work performed by the nonlicensed adjuster is under the active direction, control, charge, or management of a licensed adjuster or an insurer authorized to do business in this state.
(2) Registration with the commissioner is accomplished within 15 working days from the date on which the nonlicensed adjuster commences the claims adjusting activity in connection with the emergency situation.
(3) The nonlicensed adjuster has completed a training in accordance with the standards developed pursuant to subdivision (d).
(b) “Registration,” within the meaning of this section, means a written letter to the commissioner, submitted by the supervising licensed adjuster or admitted insurer, naming the nonlicensed adjusters, identifying their adjuster licenses held in other jurisdictions, stating when their claims adjusting activity commenced, and including a self-certification, under penalty of perjury, that the nonlicensed individual has read and understands the most recent notice prepared by the department pursuant to Section 14046 that describes the most significant California laws pertaining to property insurance policies.
(c) Registration under this section is valid for a period of 180 days from the date of the registration letter. Before the lapse of that period, the commissioner may grant further 180-day extensions as the commissioner deems appropriate upon written request from the supervising licensed adjuster or the admitted insurer.
(d) The department shall adopt regulations setting forth standards governing the training of nonlicensed adjusters in evaluating damage caused by an emergency, catastrophe, disaster, or other similar occurrence. A nonlicensed adjuster trained and accredited by one insurer pursuant to this section shall not be required to receive training again to adjust claims for a different insurer.

SEC. 4.

 Section 14046 is added to the Insurance Code, to read:

14046.
 The department shall annually prepare and deliver to every person licensed under this chapter a notice describing the most significant California laws pertaining to property insurance policies, including those related to a declared state of emergency, as defined in Section 8558 of the Government Code, or other emergency declared by a public official.

SEC. 5.

 Section 14047 is added to the Insurance Code, to read:

14047.
 (a) If, within a six-month period, an insurer assigns a third or subsequent adjuster to be primarily responsible for a claim, the insurer, in a timely manner, shall provide the insured with a written status report, establish a single point of contact for the insured, and provide the insured with one or more direct means of communication with the single point of contact.
(b) The single point of contact shall remain assigned to the insured’s claim until the insurer determines that the claim is closed.
(c) The insurer shall ensure that the single point of contact refers and transfers an insured to an appropriate supervisor upon the request of the insured, if the single point of contact has a supervisor.
(d) For purposes of this section, “single point of contact” means an individual or team of personnel knowledgeable about the claim and its current status.

SEC. 5.SEC. 6.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.
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