Bill Text: CA SB983 | 2009-2010 | Regular Session | Introduced
Bill Title: Insurance: rates.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2010-02-18 - To Com. on RLS. [SB983 Detail]
Download: California-2009-SB983-Introduced.html
BILL NUMBER: SB 983 INTRODUCED
BILL TEXT
INTRODUCED BY Senator Hollingsworth
FEBRUARY 8, 2010
An act to amend Section 1861.02 of the Insurance Code, relating to
insurance.
LEGISLATIVE COUNSEL'S DIGEST
SB 983, as introduced, Hollingsworth. Insurance: rates.
Existing law requires the rates and premiums for an automobile
insurance policy to be determined by application of specified
factors.
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 1861.02 of the Insurance Code is amended to
read:
1861.02. (a) Rates and premiums for an automobile insurance
policy, as described in subdivision (a) of Section 660, shall be
determined by application of the following factors in decreasing
order of importance:
(1) The insured's driving safety record.
(2) The number of miles he or she drives annually.
(3) The number of years of driving experience the insured has had.
(4) Those other factors that the commissioner may adopt by
regulation and that have a substantial relationship to the risk of
loss. The regulations shall set forth the respective weight to be
given each factor in determining automobile rates and premiums.
Notwithstanding any other provision of law, the use of any criterion
without approval shall constitute unfair discrimination.
(b) (1) Every Each person who meets
the criteria of Section 1861.025 shall be qualified to purchase a
Good Driver Discount policy from the insurer of his or her choice. An
insurer shall not refuse to offer and sell a Good Driver Discount
policy to any a person who meets the
standards of this subdivision.
(2) The rate charged for a Good Driver Discount policy shall
comply with subdivision (a) and shall be at least 20%
20 percent below the rate the insured would
otherwise have been charged for the same coverage. Rates for Good
Driver Discount policies shall be approved pursuant to this article.
(3) (A) This subdivision shall not prevent a reciprocal insurer,
organized prior to November 8, 1988, by a motor club holding a
certificate of authority under Chapter 2 (commencing with Section
12160) of Part 5 of Division 2, and which requires membership in the
motor club as a condition precedent to applying for insurance from
requiring membership in the motor club as a condition precedent to
obtaining insurance described in this subdivision.
(B) This subdivision shall not prevent an insurer which requires
membership in a specified voluntary, nonprofit organization,
which that was in existence prior to November
8, 1988, as a condition precedent to applying for insurance issued to
or through those membership groups, including franchise groups, from
requiring such membership as a condition to applying for the
coverage offered to members of the group, provided that it or an
affiliate also offers and sells coverage to those who are not members
of those membership groups.
(C) However, all of the following conditions shall be applicable
to the insurance authorized by subparagraphs (A) and (B):
(i) Membership, if conditioned, is conditioned only on timely
payment of membership dues and other bona fide criteria not based
upon driving record or insurance, provided that membership in a motor
club may not be based on residence in any area within the state.
(ii) Membership dues are paid solely for and in consideration of
the membership and membership benefits and bear a reasonable
relationship to the benefits provided. The amount of the dues shall
not depend on whether the member purchases insurance offered by the
membership organization. None of those membership dues or any portion
thereof shall be transferred by the membership organization to the
insurer, or any affiliate of the insurer, attorney-in-fact,
subsidiary, or holding company thereof, provided that this provision
shall not prevent any bona fide transaction between the membership
organization and those entities.
(iii) Membership provides bona fide services or benefits in
addition to the right to apply for insurance. Those services shall be
reasonably available to all members within each class of membership.
Any insurer that violates clause (i), (ii), or (iii) shall be
subject to the penalties set forth in Section 1861.14.
(c) The absence of prior automobile insurance coverage, in and of
itself, shall not be a criterion for determining eligibility for a
Good Driver Discount policy, or generally for automobile rates,
premiums, or insurability. However, notwithstanding subdivision (a),
an insurer may use persistency of automobile insurance coverage with
the insurer, an affiliate, or another insurer as an optional rating
factor. The Legislature hereby finds and declares that it furthers
the purpose of Proposition 103 to encourage competition among
carriers so that coverage overall will be priced competitively. The
Legislature further finds and declares that competition is furthered
when insureds are able to claim a discount for regular purchases of
insurance from any a carrier offering
this discount irrespective of whether or not the insured has
previously purchased from a given carrier offering the discount.
Persistency of coverage may be demonstrated by coverage under the
low-cost automobile insurance program pursuant to Article 5.5
(commencing with Section 11629.7) and Article 5.6
(commencing with Section 11629.9) of Chapter 1 of Part 3 of
Division 2, or by coverage under the assigned risk plans pursuant to
Article 4 (commencing with Section 11620) of Chapter 1 of Part 3 of
Division 2. Persistency shall be deemed to exist even if there is a
lapse of coverage of up to two years due to an insured's absence from
the state while in military service, and up to 90 days in the last
five years for any other reason.
(d) An insurer may refuse to sell a Good Driver Discount policy
insuring a motorcycle unless all named insureds have been licensed to
drive a motorcycle for the previous three years.
(e) This section shall become operative on November 8, 1989. The
commissioner shall adopt regulations implementing this section and
insurers may submit applications pursuant to this article which
comply with those regulations prior to that date, provided that no
such application shall be approved prior to that date.
