Insurers: Consolidate Vehicle Assessment Invoices
SB 476 (Chapter 347, Statutes of 2013) Auto Consumer Assessment–California Insurance Code (CIC) Section 1872.8 Commencing July 1, 2014, the assessment is reduced from $0.30 to $0.25 until January 1, 2016, and not exceeding $0.25 thereafter, on each vehicle under an insurance policy issued in this state by the insurer. Thus, policies in force prior to July 1, 2014, will be assessed at the $0.30 rate and policies in force on or after July 1, 2014, will be assessed at the $0.25 rate.
For further information and details: SB476 Impact and FAQs
The California Department of Insurance has three individual special purpose assessments on each insured vehicle in the state and has combined those assessments into one consolidated vehicle assessment invoice that will be billed quarterly. A summary of the special purpose assessments is provided below:
- $1.00 annual fee pursuant to CIC Section 1872.8, California Code of Regulations Section 2698.60 et. seq. to fund investigation and prosecution of automobile insurance fraud.
- $0.50 annual fee pursuant to CIC Section 1874.8, California Code of Regulations Section 2698.70 et. seq. to fund the Organized Automobile Fraud Interdiction Program.
- $0.25 annual fee pursuant to CIC Section 1872.81, California Code of Regulations Section 2698.68 to fund the consumer services functions of the department related to regulating automobile insurers as well as publicizing the low-cost automobile insurance program.
Please note that the quarterly special purpose assessment per insured vehicle is $0.4375. The $0.4375 assessment is determined by dividing the sum of the three special purpose annual assessments by four ($1.00 + $0.50 + $0.25 = $1.75/4= $0.4375).
For example: $0.4375 X 895,000 vehicles = $391,562.50. In this example the Insurer would remit $391,563.00.
Key Uniform Provisions for All Three Vehicle Assessments:
- Payment Calculation - Each calendar quarter shall be calculated by identifying the number of vehicles (commercial and private passenger) in this state for which a policy of insurance was in force as of the first day of the quarter, plus the number of vehicles newly insured at any time during the quarter. Calculate the total payment due by multiplying one-fourth of the current annual fee of $1.75 per vehicle ($0.4375) by the total number of vehicles.
- Quarterly Billing and Invoice Due Date - Insurers on or about 15 days prior to the end of each quarter will be mailed an invoice. Invoice certification and payment are due within thirty (30) days of the invoice date. Assessments paid after forty-five (45) days of the invoice date will be charged a late fee in accordance with CIC Section 12995.
- Invoice Certification – Invoices must be signed by an Officer of the company and returned even if the insurer had no insured vehicles for the assessed calendar quarter.
- Vehicle Definition – Insured vehicles shall include both commercial and non-commercial vehicles. Section 670 of the California Vehicle Code defines a vehicle as a device by which any person or property may be propelled, moved, or drawn upon a highway, excepting a device moved exclusively by human power or used exclusively upon stationary rails or tracks. For example: insured motorhomes and trailers are to be included in the non-commercial count.
- Examination of Insurer Records - The Commissioner may request verification of the number of vehicles insured under a policy of insurance. Pursuant to CIC Section 730, the Commissioner has begun examining insurers' records for vehicle assessment payment accuracy and compliance during financial and market conduct examinations.
Should you have any questions regarding these assessments or invoices described herein, please contact the Accounts Receivable Hotline at (916) 492-3242.