California Lawmakers Enter Final Days of 2005-06 Session

August 28, 2006

California lawmakers on Monday will begin the final days of the 2005-2006 legislative session, which ends midnight Aug. 31. The following, by Sam Sorich, president of the Association of California Insurance Companies, is a summary of the bills awaiting action in the Assembly and Senate, measures sent to the governor last week and legislation recently signed into law by the governor.

Bills Awaiting Action by the Full Assembly
SB 815 (Perata) Workers Compensation. SB 815 would increase permanent partial disability benefits for workers compensation claimants. ACIC opposes the bill.

SB 1489 (Ducheny) Attorney’s Fees: Attorney General. SB 1489 would force companies that are sued by the attorney general to pay all investigation and prosecution costs whenever the attorney general “prevails.” ACIC opposes the bill.

SB 1542 (Migden) Motor Vehicles: Key Information Access. SB 1542 would require an auto manufacturer to provide a system that gives the registered vehicle owner information necessary to reproduce the vehicle’s key to allow the owner to enter, start and operate the vehicle. ACIC supports the bill.

AB 2942 (Koretz) Workers Compensation: Inpatient Burn. AB 2942 would require the administrative director of the Division of Workers Compensation to review the reimbursement rates for some inpatient burn diagnostic groups to ensure that the rates are commensurate with the cost of inpatient burn treatment. ACIC opposes the bill.

Bills Awaiting Action by Full Senate
AB 1302 (J. Horton) State Agency Regulations. AB 1302 would extend to all state agencies the requirement currently applicable to the Department of Insurance that interested parties be advised at least five working days prior to submission of an emergency regulation to the Office of Administrative Law. ACIC supports the bill.

AB 1612 (Pavley) Workers Compensation: Network. AB 1612 would require a contracting agent to remove a medical care provider from a medical provider network at the provider’s request.
ACIC opposes the bill.

AB 2125 (Vargas) Insurance. AB 2125 is the Department of Insurance’s “omnibus” bill which addresses a number of regulatory issues. Recent amendments to the bill clarify the insurance commissioner’s regulatory authority over the State Compensation Insurance Fund. ACIC supports the bill.

AB 2287 (Chu) Workers Compensation: Acupuncture. AB 2287 would authorize special workers compensation treatment guidelines for acupuncture. ACIC opposes the bill.

AB 2831 (Ridley-Thomas) Insurance, Income, and Corporation Tax Credits: CDFI. AB 2831 would extend the sunset date for certain tax credits on qualified investments made by insurers to community development financial institutions from Jan. 1, 2007, to Jan. 1, 2017. ACIC supports the bill.

Bills Passed and Sent to Governor
AB 1122 (Wyland) Auto Insurance: Cost Estimate. AB 1122 would authorize an insurer that has paid a total loss settlement and that is unable to obtain a certificate of ownership under certain circumstances to request DMV to issue a salvage certificate for the vehicle. This would enable insurers to dispose of such vehicles. ACIC supports the bill.

AB 2400 (Benoit) Reinsurance. AB 2400 would (1) recognize the right of reinsurers to offsets in liquidation proceedings, (2) strengthen regulation of reinsurance intermediaries and (3) allow issuance of syndicated letters of credit for reinsurance security. ACIC supports the bill.

AB 2815 (Bogh) Service Contracts: Definitions. AB 2815 would authorize the insurance commissioner to approve vehicle service contracts when the company issuing the contract maintains a ratio of direct written premiums to surplus of not more than 3 to 1. ACIC supports the bill.

Bills Signed into Law by the Governor
AB 1946 (Nava) Residential Property Insurance. AB 1946 will clarify existing law that requires homeowners insurers to provide copies of the Residential Property Insurance disclosure statement to policyholders and will clarify when the Coverage A disclosure may be required. ACIC is the sponsor of the bill.

AB 2292 (Montanez) Workers Compensation: Death Benefits. AB 2292 will clarify the process for determining when workers compensation death benefits should be paid to the state in cases where the deceased employee has no dependants or heirs. ACIC supports the bill.

AB 2407 (Salinas) Vehicles: Mature Driver Program. AB 2407 will provide that a mature driver may renew his or her safe-driving certificate by completing a driver-improvement course with 240 minutes of instruction rather than the 400 minutes required under current law. ACIC supports the bill.

AB 3072 (Assembly Insurance Committee) Insurance Guarantee Association. AB 3072 will extend the date for the issuance of bonds by the California Insurance Guarantee Association from Jan. 1, 2007, to Jan. 1, 2009. ACIC supports the bill.

SB 1462 (Cox) Insurance Information and Privacy Protection: Service of Process. SB 1462 will allow the insurance commissioner to use a third-party vendor with tracking capability to notify an insurance-support organization that the commissioner has received service of process on behalf of the insurance-support organization. ACIC is the sponsor of the bill.

The Association of California Insurance Companies (ACIC) is an affiliate of the Property Casualty Insurers Association of America (PCI) and represents more than 300 property/casualty insurance companies doing business in California.

Source: ACIC

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