By Michael P. Neufeld
Sacramento, CA – Changes are ahead for a number of types of insurance coverage in California.
A.B. 53 – DIVERSITY POLICIES (Jose Solorio – D-Santa Ana) – Mandates companies admitted in California ,with premiums exceeding $100 million, to submit a report to Insurance Commissioner Dave Jones by July 1, 2013, related to the firm’s diversity efforts to engage as vendors minority-, women- and disabled veteran-owned businesses. Civil penalties are possible should a firm decline to file a report. After July 1, 2015, the report must be filed biannually.
A.B. 624 – TAX CREDIT EXTENSION (John A. Perez – D-Los Angeles) – Extends a tax credit until January 1, 2017, for investments in low-income communities through the California Development Financial Institutions (CDFI) to provide them with capital. The credit is equal to 20 percent of the investment in a CDFI and applies against gross premium taxes, personal income taxes, and bank and corporation taxes.
A.B. 1083 – PATIENT PROTECTION (Bill Monning – D-Carmel) – This bill enacts provisions of the federal Patient Protection and Affordable Care Aid related to the state’s small group health market. It prohibits carriers from using preexisting conditions in underwriting coverage. Age, family size and geographic locations may be used as premium rating factors. In addition, plans sold after January 1, 2014, must include essential health benefits. Small group health companies must report the policies and number of employees covered by the policies to the Department of Insurance or the Department of Managed Health Care.
A.B. 1747 – GRACE PERIODS (Mike Feuer – D-Los Angeles) - Life insurance policies issued or delivered in the Golden State must provide a grace period of not less than 60 days from the date the premium is due during which time the policy remains in force. The bill also allows for the policy holder to designate at least one other person to be notified of nonpayment of a premium. The notice must be sent to both the policy holder and the designated second person at least 30 days before the policy can be terminated.
A.B. 3160 – INSURANCE CONTRACTING (Bob Blumenfield – D-Van Nuys) – Insurance carriers are prohibited from counting investments made with energy and military sectors of the Iranian economy as part of their capital requirements. In addition, a safe harbor is created for companies that utilize the list of prohibited companies for investment purposes. That list — provided under the Contracting Act of 2010 — is published by the California Department of General Services.
S.B. 1448 – REGULATORY ACT COMPLIANCE (Ron Calderon – D-Montebello) – Brings California statutes into compliance with the National Association of Insurance Commissioners (NAIC) Model Insurance Company Systems Regulatory Act. The regulation requires any controlling person of a domestic insurer seeking to divest its controlling interest in the domestic insurer to file with the commissioner confidential notice of its proposed divestiture at least 30 days prior to the cessation of control. The bill would require the commissioner to determine those instances in which an insurer under those circumstances would be required to file for and obtain approval of the transaction. The bill would require the information to remain confidential unless the commissioner makes a specified determination.
S.B. 1449 – POLICY PROVISIONS (Ron Calderon – D-Montebello) – Policies issued in the state may now include premium and surrender charge waivers that are to be triggered by such things as specified medical conditions, unemployment and disability. This bill would require, if a supplemental contract is an integral part of an annuity contract, the entire contract to be submitted to the commissioner for approval.