Governor Signs Bills Sponsored by the Commissioner

Governor Jerry Brown has signed seven bills that Commissioner Jones and the California Department of Insurance (CDI) sponsored this legislative year:

• Long-Term Care: Considered to be one of the strongest long-term care insurance consumer protection measures in the country, AB 999 would allow consumers to review policy language before a purchase in order to allow a consumer to make a more informed decision, provide more pooling of claims experience to spread cost more broadly, limit the inclusion of assets in investment yields in premium rates, provide more flexibility in the rate increase review process, and impose stricter loss ratio requirements to help prevent repeated LTC insurance rate hikes on consumers and seniors who need this product now more than ever.

• CO-Ops: AB 1846 establishes a regulatory licensing framework for Consumer Owned and Operated Plans (CO-OPs). CDI now has the oversight to regulate these new non-profit health insurer organizations. With CO-OPs, consumer-driven, nonprofit health insurance issuers would offer health products in the individual and small group markets. In order to encourage the creation of CO-OP health organizations, the federal government has been awarding low-interest start-up and solvency loans to qualified nonprofit entities; to date, more than 20 established CO-OPs located in more than 20 states have been granted more than $1.6 billion in low-interest loans out of a total of $3.8 billion available in federal loan funds. CO-Ops are intended to provide  insurance to nearly one million low-income Californians in need of affordable health care.

• Bounty Hunters: AB 2029, the Bail Fugitive Recovery Persons Act, reinstates education, training, documentation, notice, and conduct requirements for bounty hunters under the California Penal Code, an act that had sunset on January 1, 2010. With the sunset of the Act, CDI has seen a significant number of cases in which bounty hunters have overstepped appropriate, if not legal, boundaries in apprehending bail fugitives.

• Health And Disability Fraud: AB 2138 increases the funding to District Attorneys and to CDI to support to investigate and prosecute health and disability fraud.

• Insolvent Insurers: AB 2303 will allow the Insurance Commissioner to take over an insurer that the U.S. Treasury Secretary determines is insolvent or in danger of becoming insolvent. The Dodd-Frank Wall Street Reform Act of 2010 granted the U.S. Treasury Secretary with the authority to make insolvency-related determinations on specified insurers, but let the act of conserving and liquidating the insurers under the state’s jurisdiction. As one of the first pieces of state-level legislation in the Nation to address this procedural gap, AB 2303 ensures a timely process for initiating the conservation and liquidation process of insurers.

• Reinsurance: SB 1216 ensures that California aligns with federal law and is current with NAIC Model language. It also ensures that the Insurance Commissioner has the needed authority to carry out the new reinsurance regulatory activities.

Entrprise Risk: SB 1448 incorporates changes the NAIC made to its Insurance Holding Company System Model Law and Regulations. Controlling persons of a holding company system must disclose an enterprise risk. An enterprise risk is any situation that involves one or more affiliates of an insurer that, if not quickly corrected, would adversely affect the financial condition of the insurer.

Last Updated 06/29/2022

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