Nine consumer protection bills sponsored by insurance commissioner signed into law in 2014

Insurance Commissioner Dave Jones announced that during the 2014 legislative session that Governor Jerry Brown signed nine bills sponsored by the California Department of Insurance (“CDI”).  A bill that adds protections for small businesses that took effect in 2014 and five other consumer protection bills that were implemented January 1, 2015.   Here is a list of them (taken from a CDI bulletin):

SB 1273, authored by Senator Ricardo Lara (D-Bell Gardens) – Low Cost Auto Insurance Expansion

The signing of SB 1273 was the single most important action taken this year to reduce the number of uninsured vehicles on our roads. The law enhances the California Low Cost Auto program by allowing more low-income individuals the opportunity to purchase low cost auto insurance, most importantly the estimated 1.4 million newly-licensed undocumented individuals who may apply for licenses starting January 2015.

AB 1804, authored by Assembly Member Henry Perea (D-Fresno) – Back-up contact

Requires insurers to provide consumers the option to designate a third party as a back-up contact and receive notification from their insurance carrier if their policy is in danger of lapsing, expiring, being terminated or canceled due to nonpayment of premium. This new law benefits both insurers and consumers by promoting continual insurance among automobile, homeowners and disability income insurance policyholders, especially seniors and members of the military who move often or are deployed, and may unintentionally have their policies terminated due to nonpayment. This will take effect January 1, 2016.

SB 1446, authored by Senator Mark DeSaulnier (D-Concord) – Small business protections

This small employer health coverage urgency bill is a victory for all California small businesses. The new law provides small employers who need time to transition to Affordable Care Act compliant policies additional time to make the transition. Small employers with non-grandfathered health insurance coverage purchased by December 31, 2013 have the option to renew their existing coverage for one year, rather than be required to move to new coverage by December 2014.

AB 2056, authored by Assembly Member Matthew Dababneh (D-Encino) – Pet insurance

Under AB 2056 pet insurers are required to disclose important information regarding their policies, standardize definitions and provide consumers with a 30-day free look period. As of July 1, 2015, pet insurers will be required to disclose baseline information regarding their policies such as reimbursement benefits, pre-existing condition limitations and a clear explanation of limitations of coverage including coinsurance, waiting periods, deductibles and annual or lifetime policy limits.

AB 2347, authored by Assembly Member Lorena Gonzalez (D-San Diego) – Annuity disclosures

Consumer protection and helping seniors avoid possible financial hardship is paramount to the mission of the Department of Insurance. Seniors now have more protection with the new annuity disclosure requirements provided by AB 2347. The new law requires disclosure language on the front of the policy jacket or on the cover sheet for an immediate annuity that aligns with the disclosure language already required for the more common deferred annuity products. This bill will go into effect July 1, 2015.

AB 2128, authored by Assembly Member Richard Gordon (D-Menlo Park) – Community development investments

Reforms the California Organized Investment Network (COIN) Program to better focus on finding and facilitating insurance industry investments that provide economic and social benefits to California’s underserved communities. The new law requires insurers who write $100 million or more in California premium to provide information to the commissioner, by July 1, 2016, on all of its community development investments, including infrastructure and green investments, as well as streamlining reporting requirements. This bill also clarifies an important element of the law authorizing the insurance commissioner to survey insurers’ supplier diversity efforts, which is part of Commissioner Jones’ Insurance Diversity Initiative.

AB 2734, authored by the Assembly Committee on Insurance – Omnibus provisions

This omnibus bill clarifies and improves various sections of the Insurance Code, the body of law that provides for consumer protections and regulation of insurance companies. Specifically it provides the Locomotive Engineers and Conductors Mutual Protection Association (LECMPA) the authority to offer an accidental death benefit in addition to job protection insurance to their members. Railroad workers will gain an important insurance protection benefitting them and their families.

SB 1142, authored by Senate Insurance Chair Bill Monning (D-Carmel) – Insurance fraud 

The law clarifies the annual fraud health and disability assessment to ensure CDI is able to continue its mission in ensuring a healthy and vibrant insurance marketplace by reducing fraud and working with local district attorneys.

AB 1234, authored by Assembly Member Marc Levine (D-San Rafael) – Confidentiality 

Maintains the confidentiality of state investigations and examinations that monitor the financial health of insurance companies. The new law protects insurer solvency by precluding the Department of Insurance from being forced to provide sensitive financial data. This bill also clarifies an important element of the law authorizing the insurance commissioner to survey the supplier diversity efforts of insurance companies which is part of Commissioner Jones’ Insurance Diversity Initiative.

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