SB 476 Impact on Three Insurance Related Special Assessments
DATE: October 31, 2013
TO: All Admitted Insurers and Other Interested Parties
SUBJECT: SB 476 (Chapter 347, Statutes of 2013)
The purpose of this notice is to inform affected insurers and interested members of the public of recently enacted legislation that affects three insurance related special assessments. First and foremost; SB 476 eliminates the sunset on these three special assessments: the Auto Consumer Assessment; the Life and Annuity Consumer Protection Assessment; and the Organized Automobile Fraud Activity Interdiction Assessment. Other key changes are as follows:
Auto Consumer Assessment - California Insurance Code (CIC) Section 1872.81
- 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 insured 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.
- There are a number of new reporting requirements that will be included in the Department's annual report. The new provisions are described in subdivision (d) of 1872.81 and the Department's SB 476, Frequently Asked Questions page.
Life and Annuity Consumer Protection Assessments - CIC 10127.17
- Commencing January 1, 2014, this assessment would apply to all new individual life insurance policy and individual annuity products regardless of value. Thus, all new products issued on or after January 1, 2014, will be assessed a fee not to exceed $1.00.
- Requires that instead of consumer education, the moneys in the fund distributed within the Department be used for functions related to individual life insurance and annuity products to disseminate information to insurers, insureds, and others regarding the applicable regulation of life insurance and annuity products, including consumer protection, purchasing and using insurance and annuity products, claim filing, benefit delivery, and dispute resolution.
For further information on the changes in SB 476 and implementation, please refer to the Department's SB 476, Frequently Asked Questions page (updated December, 2013). Additional questions may be directed to Julia Cross, Chief, Financial Management Division at (916) 492-3264.
Administration & Licensing Services Branch