California consumers to see increased insurance protections as Governor signs important wildfire and long-term care legislation
News: 2019 Press Release
SACRAMENTO, Calif. — Insurance Commissioner Ricardo Lara today thanked Governor Gavin Newsom for his recent actions in signing insurance-related bills this legislative session that protect California consumers. Among other bills sponsored or supported by the California Department of Insurance (CDI), the Governor signed Assembly Bill 1816 (Daly) that requires insurers to provide at least a 75-day notice when they nonrenew a homeowners’ policy for a policy that expires on or after July 1, 2020, and AB 1209 (Nazarian) that mandates more level premiums for consumers of long-term care insurance policies. Both of these bills address important issues affecting California consumers today.
Many community meetings held by Commissioner Lara and Department of Insurance staff have helped bring to light the growing problem of insurance nonrenewals across the state due to wildfire risk. In his signing message for AB 1816 authored by Assembly Insurance Committee Chair Tom Daly, Governor Newsom cited data published by the Department of Insurance showing a rising number of nonrenewals of policyholders especially in the state’s Wildland Urban Interface (WUI) areas, adding “We must do more. I look forward to working with the Legislature and the Insurance Commissioner next year on additional solutions.”
“I have met with thousands of people who are losing their insurance due to wildfire risks, many after decades with the same company through no fault of their own,” said Commissioner Lara. “I absolutely agree with Governor Newsom that AB 1816 is a good start, but there is more the Legislature must do to protect communities that have seen nonrenewals threaten home values and community stability. I look forward to continuing to collaborate with the Governor and his Administration, in partnership with the Legislature, to tackle the insurance issues facing Californians.”
Earlier this month, Governor Newsom signed AB 38 and SB 190, two additional important pieces of wildfire-related legislation strongly supported by the Department of Insurance that will help improve California’s wildfire prevention and mitigation efforts and address rising concerns about access to homeowners’ insurance.
Assembly Bill 38 authored by Assembly Health Committee Chair Jim Wood significantly encourages home hardening efforts through a California Wildfire Mitigation Financial Assistance Program for communities in forest and brush areas across the state. Senate Bill 190 authored by Senate Governmental Organization Committee Chair Bill Dodd creates statewide defensible space requirements to reduce wildfire risks to communities.
In addition to these new wildfire solutions, consumers with long-term care insurance policies will now have additional protections. Long-term care insurance covers expenses for assistance with the basic activities of daily living that people incur as they age. AB 1209 authored by Assembly Aging and Long-Term Care Committee Chair Adrin Nazarian protects consumers by adding disclosures that explain the effect of long-term care benefits payments, policy loans, and withdrawals, thus allowing policyholders to make a more informed decision. Additionally, the new law prohibits rates from automatically increasing based on the age of the policyholder, which will help reduce the risk that a policyholder will be priced out of their policy as they age, allowing them to keep their coverage at the time of life when long-term care benefits are needed most.
Commissioner Lara is part of a National Association of Insurance Commissioners (NAIC) Task Force looking to address the growing cost of long-term care insurance, which he wrote about in an oped earlier this year.
“The protections put in place for long-term care policyholders mean more Californians should be able to afford their policies and keep their coverage, allowing them to age with dignity,” said Commissioner Lara. “Thank you to Governor Newsom for recognizing the protections that this legislation offers, and for fighting for seniors’ access to long-term care benefits.”
In addition to these bills, Governor Newsom signed ten other Department-sponsored bills this legislative session including:
- Assembly Bill 1099 authored by Assembly Majority Leader Ian Calderon which extends CDI’s California Organized Investment Network (COIN) Advisory Board until January 1, 2029, reauthorizes the Community Investment data call for July 1, 2021, and adds definitions related to the COIN program, including investments made in reservation-based communities and rural areas.
- Assembly Bill 1104 authored by Assembly Majority Leader Ian Calderon which gives the Department greater ability to protect consumers and provides additional tools to identify possible insolvencies in an annual assessment of long-term care companies.
- Assembly Bill 1535 authored by Assembly Member Wendy Carrillo which requires pet insurers to disclose the contact information for the underwriting insurer, the agent or broker, and CDI to consumers that hold pet insurance policies. This new law will provide consumers with greater transparency and help streamline the line of communication between pet owners and their pet insurance carriers so that insurers cannot hide behind confusing brand names anymore to avoid claims or complaints.
- Assembly Bill 1538 authored by Assembly Member Shirley Weber which clarifies that consumers have the right to choose a cash payment in lieu of repairing a damaged vehicle under an automobile insurance policy. This new law will codify an existing best practice by more than 98 percent of insurers in the marketplace today and will protect low income drivers so policyholders can still collect an insurance claim even if they choose not to repair the car.
- Assembly Bill 1813 authored by the Assembly Committee on Insurance which resolves issues identified by the Department to clarify and cleanup obsolete and superseded code sections and ensures the California Insurance Code is in line with technical aspects of the National Association of Insurance Commissioners (NAIC) model laws.
- Senate Bill 508 authored by Senator Connie Leyva which puts residents of mobile homes, condominiums, and rental housing on equal footing with homeowners when it comes to knowing about their rights under California law by requiring insurers to provide the Residential Property Insurance Disclosure statement and the California Residential Property Insurance Bill of Rights Disclosure.
- Senate Bill 534 authored by Senate Banking and Financial Institutions Committee Chair Steven Bradford which encourages competitive business procurement and governing board opportunities for all people by continuing the Insurance Supplier Diversity Survey, expanding diverse business categories to include LGBT-owned and veteran-owned businesses in addition to continuing the current minority, women and disabled veteran-owned business categories.
- Senate Bill 570 authored by Senate Insurance Committee Chair Susan Rubio which extends the California Low Cost Automobile Insurance Program to January 1, 2025, thus continuing this important auto liability insurance program for underserved consumers in need of affordable car insurance coverage. SB 570, among other things, also extended eligibility to students if they reside at the same address where they are claimed as a dependent.
- Senate Bill 740 authored by Senate Budget and Fiscal Review Committee Chair Holly Mitchell which mandates insurers to identify deceased individuals whose deaths may require insurers to pay benefits or proceeds to beneficiaries in accordance with the terms of life insurance policies, annuity contracts, or retained asset accounts. Under this new law, insurers are now required to attempt to locate beneficiaries of the deceased individuals and provide appropriate claims forms or instructions to the beneficiaries to make a claim.
- Senate Bill 784 authored by the Senate Committee on Health which conforms state law to both recent federal statutory changes and adopted NAIC Model Regulations made to the Medicare program and, specifically, Medicare Supplement policies issued on or after January 1, 2020 in order to ensure compliance with the federal Medicare Access and CHIP Reauthorization Act.
“Californians now have greater insurance protections in large part to the committed efforts of these bill authors. I sincerely thank them for their partnership as I look forward to continuing to work with them and their colleagues next year to close even more coverage gaps and secure more protections for those affected by disaster,” added Commissioner Lara.
The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $310 billion in premiums annually in California. Since 2011 the California Department of Insurance received more than 1,000,000 calls from consumers and helped recover over $469 million in claims and premiums. Please visit the Department of Insurance website at www.insurance.ca.gov. Non-media inquiries should be directed to the Consumer Hotline at 800-927-4357. Teletypewriter (TTY), please dial 800-482-4833.