Insurers: Consolidated Vehicle Assessment Invoices

Legislative Changes:

Assembly Bill (AB) 1395 (Chapter 407, Statutes of 2014) amended California Insurance Code (CIC) Section 1872.81 to increase the amount of the Consumer Services Special Purpose Assessment from $0.25 to $0.26 effective January 1, 2015 until January 1, 2016, and not exceeding $0.26 thereafter, on each vehicle under an insurance policy issued in this state by the insurer.

On December 24, 2014 an Implementation Guidance informing of the legislative change and the Department's implementation process was mailed to insurers. For further details, please contact the Department at the office listed below.

Background:

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. $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.
2. $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.
3. $0.26 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 $0.44. The $0.44 assessment is determined by dividing the sum of the three special purpose annual assessments by four ($1.00 + $0.50 + $0.26 = $1.76/4 = $0.44).

• 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 $1.76 per vehicle ($0.44) by the total number of vehicles.
• Quarterly Billing and Invoice Due Date - On or about 15 days prior to the end of each quarter an invoice will be mailed to insurers. 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.
• For information on paying your FAC fees by Electronic Fund Transfer (EFT), please review Consolidated Vehicle Assessment Invoices (FAC) on our EFT webpage. 
• 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 motor homes 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 us at FACFees@insurance.ca.gov or Accounts Receivable Hotline at (916) 492-3242.