California Senate Bill SB1302 Introduced / Bill

 BILL NUMBER: SB 1302INTRODUCED BILL TEXT INTRODUCED BY Senator McGuire (Coauthors: Senators Berryhill and Roth) (Coauthor: Assembly Member Dodd) FEBRUARY 19, 2016 An act to amend Sections 10095 and 10095.5 of the Insurance Code, relating to insurance, and declaring the urgency thereof, to take effect immediately. LEGISLATIVE COUNSEL'S DIGEST SB 1302, as introduced, McGuire. Basic property insurance: California FAIR Plan. Under existing law, the California FAIR (fair access to insurance requirements) Plan Association is a joint reinsurance association of state insurers that is established to, among other things, assist persons in securing basic property insurance for qualified property for which insurance cannot be obtained through the normal insurance market. Existing law requires the association to establish and maintain a toll-free telephone number through which a person may receive assistance in applying for basic property insurance. Existing law requires an insurer member of the plan to provide to an applicant who is denied coverage the toll-free number for the plan for information and assistance in obtaining basic property insurance. Existing law requires an agent or broker transacting basic property insurance to either assist a person in making an application for insurance through the plan or to provide the person with that toll-free telephone number. This bill would additionally require the association to establish and maintain an Internet Web site at which a person may receive information and assistance in applying for insurance through the plan. The bill would require an insurer member to provide an applicant denied coverage or a policyholder whose policy is canceled or not renewed both that Internet Web site address and toll-free telephone number. The bill would require the association to cause that toll-free telephone number and Internet Web site address to be included in all communications with an applicant or insured. The bill would require an insurance agent or broker transacting basic property insurance to assist a person in making an application for insurance through the plan, and would delete the provision that permitted the agent or broker, as an alternative, to provide the person the toll-free telephone number. This bill would declare that it is to take effect immediately as an urgency statute. Vote: 2/3. Appropriation: no. Fiscal committee: yes. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 10095 of the Insurance Code is amended to read: 10095. (a) Within 30 days following the effective date of this chapter, the association shall submit to the commissioner, for his or her review, a proposed plan of operation, consistent with the provisions of this chapter, creating an association consisting of all insurers licensed to write and engaged in writing in this state, on a direct basis, basic property insurance or any component  thereof  of basic property insurance  in homeowners or other dwelling multiperil policies.  Every   An  insurer  so  described  in this subdivision  shall be a member of the association and shall remain a member as a condition of its authority to transact those kinds of insurance in this state. (b) The proposed plan shall authorize the association to assume and cede reinsurance on risks written by insurers in conformity with the program. (c) Under the plan,  each  an  insurer shall participate in the writings, expenses, profits and losses of the association in the proportion that its premiums written during the second preceding calendar year bear to the aggregate premiums written by all insurers in the program, excluding that portion of the premiums written attributable to the operation of the association. Premiums written on a policy of basic residential earthquake insurance issued by the California Earthquake Authority pursuant to Section 10089.6 shall be attributed to the insurer that writes the underlying policy of residential property insurance. (d) The plan shall provide for administration by a governing committee under rules to be adopted by  it   the governing committee  with the approval of the commissioner. Voting on administrative questions of the association and facility shall be weighted in accordance with each insurer's premiums written during the second preceding calendar year as disclosed in the reports filed by the insurer with the commissioner. (e) The plan shall provide for a plan to encourage persons to secure basic property insurance through normal channels from an admitted insurer or a licensed surplus line broker by informing those persons what steps they must take in order to secure the insurance through normal channels. (f) The plan shall be subject to the approval of the commissioner and shall go into effect upon the tentative approval of the commissioner. The commissioner may, at any time, withdraw his or her tentative approval or he or she may, at any time after he or she has given his or her final approval, revoke that approval if he or she feels it is necessary to carry out the purposes of the chapter. The withdrawal or revocation of that approval shall not affect the validity of any policies executed prior to the date of the withdrawal. If the commissioner disapproves or withdraws or revokes his or her approval to all or any part of the plan of operation, the association shall, within 30 days, submit for review an appropriately revised plan or part  thereof,   of a revised plan,  and, if the association fails to do so, or if the revised plan  so filed  is unacceptable, the commissioner shall promulgate a plan of operation or part  thereof   of a plan  as he or she may deem necessary to carry out the  purpose   purposes  of this chapter. (g) The association may, on its own initiative or at the request of the commissioner, amend the plan of operation, subject to approval by the commissioner, who shall have supervision of the inspection bureau, the facility and the association. The commissioner or any person designated by him or her, shall have the power of visitation of and examination into the operation and free access to all the books, records, files, papers, and documents that relate to operation of the facility and association, and may summon, qualify, and examine as witnesses all persons having knowledge of those operations, including officers, agents, or employees thereof. (h)  Every   An  insurer member of the plan shall provide to  applicants   an applicant  who  are   is  denied  coverage   coverage, or a policyholder whose policy is canceled or not renewed,  the  Internet Web site address and  statewide toll-free  "800"   telephone  number for the plan established pursuant to Section 10095.5 for the purpose of obtaining information and assistance in obtaining basic property insurance. SEC. 2. Section 10095.5 of the Insurance Code is amended to read: 10095.5. (a) The association shall establish and maintain  an Internet Web site and  a statewide toll-free  "800"   telephone  number through which  persons   a person  may receive  information and  assistance in applying for insurance through the plan. The association shall cause the  toll-free telephone  number to be published in all general distribution telephone directories in  California.   the state and shall include the toll-free telephone and Internet Web site address on all communications with an applicant or insured.  (b)  Every   An insurance agent or broker transacting basic property insurance shall  either  assist  persons   a person  in making  an  application for insurance through the  plan or provide persons who desire that insurance with the toll-free number established pursuant to subdivision (a).   plan.  SEC. 3. This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are: In order to have the consumer protections proposed in this act become operative as soon as possible for homeowners who are having difficulty obtaining insurance coverage for their property because they are located in high-risk brush and wildfire areas, and to provide insurers adequate time to amend and prepare their required notices to customers about the availability of coverage through the FAIR (fair access to insurance requirements) Plan, it is necessary for this act to take effect immediately.