Bill Text: CA SB631 | 2011-2012 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Insurance Commissioner: violations: remedies.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2012-01-31 - Returned to Secretary of Senate pursuant to Joint Rule 56. [SB631 Detail]

Download: California-2011-SB631-Amended.html

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BILL NUMBER: SB 631	AMENDED
	BILL TEXT

	AMENDED IN SENATE  MARCH 24, 2011

INTRODUCED BY   Senator Evans

                        FEBRUARY 18, 2011

   An act to  amend Section 12926.1 of   add
Section 12926.15 to  the Insurance Code, relating to insurance.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 631, as amended, Evans. Insurance Commissioner: 
compliance: enforcement: funds.   violations: remedies.
 
   Existing law requires the Insurance Commissioner to perform all
duties imposed upon him or her by the provisions of the Insurance
Code and other laws regulating the business of insurance in this
state, and to enforce the execution of those provisions and laws.
 
   This bill would additionally authorize the commissioner, in the
exercise of his or her discretion to take enforcement action, to
impose upon an insurer, licensee, or other entity or person subject
to the commissioner's authority specified remedies, either by way of
settlement or following a hearing, whenever the commissioner finds
that there has been a violation of an applicable insurance provision,
as prescribed.  
   Existing law requires the Insurance Commissioner to require from
every insurer in the state full compliance with the provisions of the
Insurance Code. Existing law requires that any fines, penalties,
fees, and costs resulting from any matter involving compliance with
or enforcement of any provisions of the Insurance Code, or other laws
involving any entity subject to the jurisdiction of the
commissioner, be deposited in the appropriate fund as provided by
law. Existing law requires that any funds ordered, or allocated by a
settlement, to be used for public outreach, be subject to specified
limitations.  
   This bill would make a technical, nonsubstantive change to these
provisions. 
   Vote: majority. Appropriation: no. Fiscal committee:  no
  yes  . State-mandated local program: no.


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

   SECTION 1.    Section 12926.15 is added to the 
 Insurance Code  , to read:  
   12926.15.  (a) The Legislature finds and declares all of the
following:
   (1) Existing law permits the commissioner to order restitution
only in limited circumstances.
   (2) The commissioner regularly finds that, as a result of legal
violations, Californians are entitled to refunds or restitution, but
in many circumstances, the commissioner has no specific authority to
order refunds or restitution.
   (3) This section is intended to provide the commissioner the
authority to order refunds or restitution in all instances where he
or she finds that an insurer, licensee, or other entity or person has
violated the code.
   (b) In addition to any other remedy provided in this code, and
notwithstanding Sections 12921, 12926.1, and 12975.7, in the exercise
of his or her discretion to take enforcement action, the
commissioner may impose upon an insurer, licensee, or other entity or
person subject to the commissioner's authority the remedies provided
in this section. Whenever the commissioner finds, either by way of
settlement or following a hearing, that an insurer, licensee, or
other entity or person subject to this code has violated any of the
provisions of this code, he or she may order the following remedies:
   (1) The commissioner may order an insurer, licensee, or other
entity or person subject to this code to pay restitution to a person.
Restitution shall mean quantifiable monetary sums that an insurer,
licensee, or other entity or person owes to a person, but did not
pay, in violation of a law or regulation enforced by the
commissioner. Restitution, as defined herein, shall also include
out-of-pocket expenses incurred or economic harm suffered by a person
because of an insurer's, licensee's, or other entity's or person's
violation of a law or regulation enforced by the commissioner.
   (2) In matters where the commissioner finds a violation of the
provisions of this code, the commissioner may order an insurer,
licensee, or other entity or person to pay attorney's fees and costs
of the department and future costs of the department to ensure
compliance with the settlement, or order requiring restitution or
other remedies.
   (c) Where restitution is ordered and paid to a person pursuant to
the provisions of this section, the amount paid shall be credited to
any subsequent judgment obtained by that person in a civil action
arising from the same facts and circumstances.
   (d) Nothing in this section is intended to limit or restrict
actions, remedies, or procedures otherwise available to the
department or any person pursuant to any other provision of law.
   (e) It shall not be a defense in an administrative or private
civil action that the commissioner did not order an insurer,
licensee, or other entity or person to pay restitution.
   (f) For proceedings not required to be conducted in accordance
with the Administrative Procedure Act (Chapter 5 (commencing with
Section 11500) of Part 1 of Division 3 of Title 2 of the Government
Code), the following provisions shall apply:
   (1) An order requiring restitution shall become effective 45 days
after it is delivered or mailed to the insurer, licensee, or other
entity or person unless a stay of execution is granted.
   (2) Judicial review of an order requiring restitution may be had
by filing a petition for a writ of mandate in accordance with the
provisions of the Code of Civil Procedure. Notwithstanding those
provisions, the petition shall be filed within 45 days after the
delivery or mailing of the order requiring restitution.
   (g) If restitution is not paid to a person within 10 days after an
order becomes effective, the commissioner shall proceed in
accordance with Section 12976 for the purpose of recovering those
moneys due to that person.
   (h) As used in this section, "person" shall have the same meaning
as set forth in Section 19.  
  SECTION 1.    Section 12926.1 of the Insurance
Code is amended to read:
   12926.1.  (a) In any matter involving compliance with or
enforcement of any of the provisions of this code or any other laws
of this state involving any entity subject to the jurisdiction or
authority of the commissioner, whether the matter is a formal
administrative accusation or adjudication, a formal or potential
judicial action, or other enforcement tool, and whether or not the
matter is settled or prosecuted to resolution, the use of any funds
that are imposed as fines or penalties of any sort, or collected by
means of settlement, or paid or reserved in any manner as a result of
the action, shall be subject to the limitations of this section.
   (b) Fines, penalties, fees, and costs shall be deposited in the
appropriate fund as provided by law.
   (c) Any funds ordered, or allocated by a settlement, to be used
for public outreach of any sort, shall be subject to all of the
following limitations:
   (1) The commissioner's name, likeness, or voice shall not be used
in any printed, audio, or visual material that is released either for
general distribution or to specific recipients unless a court finds
good cause to do so.
   (2) The message shall be limited to information relevant to the
enforcement action or compliance issues that generated the funds.
   (3) The primary focus of any public outreach where the purpose is
to advise members of the public of rights affecting pecuniary or
property interests shall be to provide specific information needed by
the affected persons to obtain or protect those rights.
   (4) No funds subject to this subdivision shall be used for general
education of the public about insurance issues, except to the extent
that the education relates to the type of violations that caused the
enforcement or compliance action, and otherwise complies with the
limitations of this section.
   (5) No funds subject to this subdivision shall be spent or
otherwise disposed of unless the expenditure or disposal has been
approved by a court of competent jurisdiction.
   (d) (1) This section may be enforced by an affected individual
with an interest in the matter or a policyholder of an insurer that
is a party to a settlement with the department, a city attorney, a
district attorney, or the Attorney General, who may bring an action
against the commissioner in the superior court in any county where a
violation of this section has occurred.
   (2) A court may issue injunctions or provide other equitable
remedies as appear to the court to be appropriate, and shall order
payment by the commissioner from nonpublic funds to a prevailing
party who has brought an action under this section of an amount
sufficient to compensate the party for all attorneys' fees, costs of
litigation, and expenses incurred in bringing and prosecuting the
action. For the purposes of this section, "nonpublic funds" does not
include assets of an insurer or other party to a settlement that are
not part of a valid and voluntary settlement with the department or
commissioner.
   (e) The commissioner may not increase fees or assessments against
insurers in order to comply with this section.