2020 brings greater protections for insurance consumers as new laws go into effect
News: 2020 Press Release
SACRAMENTO, Calif. — Californians will benefit from stronger insurance protections as six new state laws designed with consumers in mind took effect January 1, 2020. Several other consumer protection laws will take effect later in the year.
“We won many victories for California consumers last year, and secured more protections for homeowners, motorists, seniors, and diverse businesses,” said Insurance Commissioner Ricardo Lara. “I am looking forward to a new year creating additional new protections for consumers, including those affected by catastrophic wildfires. We will continue working with our partners, the Legislature, and the Governor to make a better California for all in 2020.”
Beginning January 1, consumers now have the right to choose a cash payment in lieu of repairing a damaged vehicle under an automobile insurance policy thanks to Assembly Bill 1538 authored by Assembly Member Shirley Weber. This new law helps protect low income drivers, allowing policyholders to collect an insurance claim even if they choose not to repair the vehicle.
The California Low Cost Automobile Insurance Program, which helps provide auto liability insurance to new drivers in underserved consumers, has been extended to January 1, 2025 as a result of Senate Bill 570 authored by Senator Susan Rubio. Among other things, this new law also extended eligibility to students if they reside at the same address where they are claimed as a dependent.
Economic empowerment of diverse small businesses
Senate Bill 534 authored by Senator Steven Bradford encourages the $310 billion insurance industry to use its buying power to benefit diverse small businesses. SB 534 extends innovative programs that bring increased transparency and opportunities for partnership between the nation’s largest insurance market and woman-, minority-, LGBT- and veteran-owned businesses.
Investment in underserved communities
This year, the California Organized Investment Network (COIN) will continue thanks to Assembly Bill 1099 authored by Assembly Member Ian Calderon. The new law will allow this important program at the Department to continue its mission in investing into California’s underserved communities and helping the economic development of the state. The COIN program encourages insurers to be supportive of investments that promote social, economic, and environmental benefits.
Pet owners will also see greater protections with their pet insurance policies as Assembly Bill 1535 authored by Assembly Member Wendy Carrillo takes effect. This new law requires pet insurers to disclose the contact information for the underwriting insurer, the agent or broker, and the Department of Insurance 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 to avoid claims or complaints.
Health and long-term care
Senate Bill 784 authored by the Senate Committee on Health conforms state law to both recent federal statutory changes and adopted National Association of Insurance Commissioners (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 Children's Health Insurance Program Reauthorization Act.
Two additional Commissioner-sponsored consumer protection laws are set to take effect beginning July 1, 2020 including:
- Senate Bill 740, authored by Senator Holly Mitchell, will require 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 landmark 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. This new law follows up on nearly a decade of market conduct exams and enforcement actions conducted by the Department against life insurers as part of a nationwide effort.
- Senate Bill 508, authored by Senator Connie Leyva, will place 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.
In addition, Commissioner Lara supported Assembly Bill 1816, authored by Assembly Member Tom Daly, which will require 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. This additional time will give homeowners a chance to shop for a new policy and consider their options.
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.