AMENDED IN SENATE AUGUST 15, 2011
AMENDED IN ASSEMBLY MAY 11, 2011
AMENDED IN ASSEMBLY APRIL 28, 2011
AMENDED IN ASSEMBLY MARCH 25, 2011
california legislature—2011–12 regular session
ASSEMBLY BILL No. 1024
Introduced by Assembly Member Hueso
(Coauthors: Assembly Members Solorio and Torres)
February 18, 2011
An act to add Sections 11629.86, 11629.87, and 11629.88 to the
Insurance Code, and to amend Section 4000.38 of the Vehicle Code,
relating to insurance.
legislative counsel’s digest
AB 1024, as amended, Hueso. Insurance: low-cost automobile
insurance: sales.
Existing
(1) Existing law establishes within the California Automobile
Assigned Risk Plan a low-cost automobile insurance program in order
to provide a means for eligible consumers to buy automobile insurance,
as specified.
This bill would authorize a California Automobile Assigned Risk
Plan (plan) certified producer to accept and process an application to
purchase low-cost automobile insurance policies through an Internet
Web site, as provided. The bill would require the plan to coordinate
with the Department of Insurance in order to develop a system for
receiving and assigning policies issued through Internet Web sites, and
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would provide that the plan may request, and the department may
include in its plan submitted to the Legislature the use of $50,000 from
the department’s existing consumer outreach fund for the sole purpose
of implementing these provisions.
The bill would require the plan, subject to the approval of the
Insurance Commissioner, to establish and maintain, or contract with an
entity, by way of an open bidding process, to establish and maintain,
an Internet Web site to refer or assign, at the consumer’s option, persons
to certified agents or brokers, for the purchase of a low-cost automobile
insurance policy. The bill would also provide that the plan may request
and the department may include in its plan submitted to the Legislature,
that up to $100,000 from the department’s existing consumer outreach
fund be made available for development of the Primary California
Low-Cost Auto Web Site.
This bill would prohibit a low-cost automobile insurance policy
applicant from being required to provide a copy of his or her, or other
household member’s, driver’s license, if the department finds another
suitable means of verifying the driver’s licensure.
(2) Existing law requires the Department of Motor Vehicles to
suspend, cancel, or revoke the registration of a vehicle if the financial
responsibility requirements have not been met. Existing law requires
the department, prior to suspending, canceling, or revoking the
registration of a vehicle, to notify the vehicle owner of its intent to
suspend, cancel, or revoke the registration, and to provide in the
notification document in plain, boldface type not less than 12 point in
size, and in both English and Spanish, a statement that a program
offering affordable automobile insurance to low-income households
has been established.
This bill would revise this statement and rename the program as the
“California’s Low Cost Automobile Insurance Program” and would
require that the statement include Web site information, a toll-free
telephone number, and eligibility requirements for applicants.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
The people of the State of California do enact as follows:
1 SECTION 1. Section 11629.86 is added to the Insurance Code,
2 to read:
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1 11629.86. (a) A California Automobile Assigned Risk Plan
2 certified producer may accept and process an application to
3 purchase a low-cost automobile insurance policy under the program
4 through an Internet Web site, in accordance with this section and
5 regulations adopted by the Department of Insurance pursuant to
6 this section.
7 (b) Any producer seeking certification to accept and process
8 low-cost automobile insurance policy applications through an
9 Internet Web site shall notify the California Automobile Assigned
10 Risk Plan of its intentions to do so prior to accepting any
11 applications to the program, and the producer’s Internet Web site
12 shall comply with the rules established by subdivision (c) of
13 Section 11629.87.
14 (c) Prior to accepting payment and upon transmitting any
15 information from the consumer, the producer’s Internet Web site
16 shall include a clear explanation of whether the consumer will be
17 afforded insurance coverage upon payment and, if not, when the
18 consumer will receive coverage and how he or she will receive
19 notice of coverage.
20 (d) A producer accepting and processing applications through
21 an Internet Web site shall be entitled to the same commission
22 available to a producer selling a low-cost automobile insurance
23 policy by any other means acceptable under the law.
24 (e) Any producer accepting and processing applications through
25 an Internet Web site is subject to the laws and rules governing this
26 program and is liable for any errors and omissions related to the
27 transaction of insurance to the same extent as a producer selling
28 a low-cost automobile insurance policy by any other means
29 acceptable under the law.
30 (f) Any consumer information required by this article may be
31 accepted by electronic means after the Department of Insurance
32 adopts regulations implementing this section and only if the
33 information is submitted in accordance with those regulations.
34 (g) The California Automobile Assigned Risk Plan shall
35 coordinate with the Department of Insurance in order to develop
36 a system for receiving and assigning policies issued through
37 Internet Web sites.
38 (h) The California Automobile Assigned Risk Plan may request,
39 and the Department of Insurance may include in its plan submitted
40 pursuant to Section 11629.85, up to fifty thousand dollars ($50,000)
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1 from the department’s existing consumer outreach fund to be used
2 for the sole purpose of implementing this section.
3 SEC. 2. Section 11629.87 is added to the Insurance Code, to
4 read:
5 11629.87. (a) Subject to the approval of the commissioner,
6 the California Automobile Assigned Risk Plan shall establish and
7 maintain, or contract with an entity to establish and maintain, an
8 Internet Web site that shall provide members of the public with
9 an option for either of the following:
10 (1) Referral to a list of certified agents or brokers with an office
11 in the same geographic area as the consumer who may be contacted
12 to purchase a low-cost automobile insurance policy. This list shall
13 contain the name, address, telephone number, and, if available,
14 the e-mail address and Internet Web site of those agents or brokers.
15 (2) Assignment to a randomly selected certified agent or broker
16 in the same geographic area as the consumer who can be accessed
17 online to process and accept an application to purchase a low-cost
18 automobile insurance policy. The assigned agent or broker shall
19 be subject to the conditions specified in Section 11629.86.
20 (b) The plan may, with the approval of the Department of
21 Insurance, authorize the use, for a designated period of time, of
22 the department-owned Internet Web site domain name
23 http://www.mylowcostauto.com, or any other relevant domain
24 names controlled by the Department of Insurance, for the purposes
25 of this section and Section 11629.86.
26 (c) The plan shall ensure that the Internet Web site does all of
27 the following:
28 (1) Provides all disclosures and other information required by
29 law that would otherwise be provided by a producer.
30 (2) Effectively educates consumers about the eligibility
31 requirements, the benefits, and the limits of the low-cost
32 automobile insurance policy.
33 (3) Describes or establishes a process to collect any documents
34 that are necessary for determining qualification for the policy.
35 (4) Establishes a process to electronically certify the information
36 provided by the consumer.
37 (5) Maintains safeguards to ensure that consumer information
38 transmitted through that Internet Web site is secure.
39 (6) Provides the physical address of the producer and the
40 telephone number and e-mail of the producer.
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1 (7) Provides the contact information for the Consumer Services
2 Division of the Department of Insurance.
3 (8) Adheres to any other rules and regulations adopted by the
4 Department of Insurance to promote the purposes of this section
5 and Section 11629.86.
6 (9) Notifies the consumer that if he or she does not qualify for
7 the low-cost automobile insurance policy that other policies may
8 be available from producers or insurers. Directs the consumer to
9 the Department of Insurance’s auto insurance premium comparison
10 Internet Web page.
11 (d) The Internet Web site shall not be made available to the
12 public until the commissioner has made a determination that it
13 adequately provides all of the necessary information a consumer
14 would need in order to apply to purchase the policy.
15 (e) The Internet Web site shall be constructed to authorize the
16 plan-certified producer to forward the application, supporting
17 documents, and the applicant’s certification to the plan.
18 (f) The Internet Web site shall accept payment by credit or debit
19 card or other form of electronic payment the Department of
20 Insurance determines to be appropriate. It shall also provide a
21 mechanism for payment by check.
22 (g) The Internet Web site shall be made available in English
23 and Spanish and in as many additional languages as feasible. The
24 English and Spanish language sites shall be made available to the
25 public as soon as possible, irrespective of whether other versions
26 are finalized.
27 (h) Notwithstanding any provision of Chapter 2 (commencing
28 with Section 10290) of Part 2 of Division 2 of the Public Contract
29 Code, if the plan chooses to contract with an entity to establish
30 and maintain the Internet Web site, the plan shall solicit and
31 consider the contract via an open, competitive bid process;
32 however, it shall not issue a request for proposals until the
33 Department of Insurance has approved the request. The contract
34 period shall not extend more than three years. Twelve months
35 before the expiration of the contract, the plan shall determine
36 whether to renew the contract or solicit bids for a new contract.
37 (i) The plan may request, and the Department of Insurance may
38 include in its plan submitted pursuant to Section 11629.85, that
39 up to one hundred thousand dollars ($100,000) from the
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1 department’s existing consumer outreach fund be made available
2 for the development of the Internet Web Site.
3 SEC. 3. Section 11629.88 is added to the Insurance Code, to
4 read:
5 11629.88. An applicant shall not be required to provide a copy
6 of the applicant’s or other household member’s driver’s license,
7 if the Department of Insurance finds that there is another suitable
8 means of verifying the driver’s licensure.
9 SEC. 4. Section 4000.38 of the Vehicle Code is amended to
10 read:
11 4000.38. (a) The department shall suspend, cancel, or revoke
12 the registration of a vehicle when it determines that any of the
13 following circumstances has occurred:
14 (1) The registration was obtained by providing false evidence
15 of financial responsibility to the department.
16 (2) Upon notification by an insurance company that the required
17 coverage has been canceled and a sufficient period of time has
18 elapsed since the cancellation notification, as determined by the
19 department, for replacement coverage to be processed and received
20 by the department.
21 (3) Evidence of financial responsibility has not been submitted
22 to the department within 30 days of the issuance of a registration
23 certificate for the original registration or transfer of registration of
24 a vehicle.
25 (b) (1) Prior to suspending, canceling, or revoking the
26 registration of a vehicle, the department shall notify the vehicle
27 owner of its intent to suspend, cancel, or revoke the registration,
28 and shall provide the vehicle owner a reasonable time, not less
29 than 45 days in cases under paragraph (2) of subdivision (a), to
30 provide evidence of financial responsibility or to establish that the
31 vehicle is not being operated.
32 (2) For the low-cost automobile insurance program established
33 under Section 11629.7 of the Insurance Code, the department shall
34 provide residents with information on the notification document,
35 in plain, bold boldface type not less than 12 point in size, and in
36 both English and Spanish, stating the following:
37 “A program offering affordable automobile insurance to
38 low-income households has been established. To determine if you
39 are eligible for this insurance, call (insert toll-free phone number
40 for the California Automobile Assigned Risk Plan or its successor).
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1 This call is free to you and may be made during normal business
2 hours, Monday through Friday, except holidays.”
3
4 “California’s Low Cost Automobile Insurance Program - visit
5 (insert Web site provided by the Department of Insurance) or call
6 (insert toll-free telephone number for the California Automobile
7 Assigned Risk Plan or its successor as provided by the Department
8 of Insurance) to determine if you are eligible. Applicants must
9 have a good driving record, be 19 years of age or older, have had
10 a driver’s license for the past 3 years, and meet income eligibility
11 requirements (insert income example provided by the Department
12 of Insurance).”
13
14 (c) (1) Notwithstanding any other provision of this code, before
15 a registration is reinstated after suspension, cancellation, or
16 revocation, there shall be paid to the department, in addition to
17 any other fees required by this code, a fee sufficient to pay the cost
18 of the reissuance as determined by the department.
19 (2) Commencing on January 1, 2011, the reissuance fee imposed
20 by paragraph (1) shall not apply to a member of the California
21 National Guard or the United States Armed Forces who was on
22 active duty, serving outside of this state in a military conflict during
23 a time of war, as defined in Section 18 of the Military and Veterans
24 Code, at the time of the suspension, cancellation, or revocation of
25 his or her vehicle registration. The person shall submit a copy of
26 his or her official military orders upon requesting the registration
27 reinstatement.
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