Health insurance fraud: annual fee.

Existing law provides for the regulation of disability insurers by the Insurance Commissioner. Existing law requires a disability insurer or other entity liable for any loss due to health insurance fraud doing business in California to pay an annual fee that does not exceed $0.10 per year for each insured in order to fund increased investigation and prosecution of fraudulent disability insurance claims. Existing law requires that 50% of those funds be distributed to the Fraud Division of the Department of Insurance for enhanced investigative efforts and that the other 50% be distributed to local district attorneys for the investigation and prosecution of disability insurance fraud cases, as specified. This bill would authorize the commissioner to increase the fee to no more than $0.20 per year for each insured and would require that 30% of those funds go to the Fraud Division of the department and that 70% go to the local district attorneys. The bill would require the commissioner to adopt regulations to implement these provisions. The bill would authorize an insurer to recoup this fee by way of a surcharge on premiums or by including the fee within the insurer's rates, as specified.