Insurance.

(1) Existing law requires that unless the insurance contract provides otherwise, an insured person is entitled to a return of his or her premium if the policy is canceled, rejected, surrendered, or rescinded, as provided. This bill would require that any insurance policy that includes a provision to refund a premium other than on a pro rata basis, including the assessment of cancellation fees, disclose that fact in writing, including the actual or maximum fees or penalties applied, which would be permitted to be stated in the form of percentages of the premium. The disclosure would be required to be made prior to, or concurrent with, the application and prior to each renewal, as provided. The disclosure would not be required if the policy provision permits, but does not require, the insurer to refund a premium other than on a pro rata basis, and the insurer refunds the premium on a pro rata basis. If an application is made by telephone, the disclosure would be required to be mailed to the applicant or insured within 5 business days. The disclosure requirements would apply prospectively and only to policies issued or renewed on or after January 1, 2012. This bill would not require any additional disclosure of a fee or penalty for early cancellation if that disclosure is required by any other provision of law. (2) Existing law requires the Insurance Commissioner to conduct an examination of the business and affairs of insurers admitted in this state at least once every 5 years. In scheduling and determining the nature, scope, and frequency of the examinations, the commissioner is required to consider the results of financial statement analyses and ratios, changes in management or ownership, actuarial opinions, reports of independent certified public accountants, market analysis results, including consumer complaint analysis, evaluation of ongoing regulatory activities, analysis of data derived from industry surveys or interrogatories, and other criteria as set forth in the Examiner's Handbook or in the Market Regulation Handbook adopted by the National Association of Insurance Commissioners that are in effect at the time of the examination. This bill would authorize the commissioner to postpone a market conduct examination, otherwise required, for up to 3 years if information derived from a market analysis indicates that the prior examination of the insurer resulted in no significant negative findings, the number of consumer complaints received by the insurer is in the lowest quartile of complaints, on a ratio basis, for insurers in that line of business, and the market analysis identifies no other issues of significant concern.