Health insurance fraud: annual special purpose assessments.

Existing law provides for the regulation of disability insurers by the Insurance Commissioner. Existing law requires every admitted disability insurer or other entity liable for any loss due to health insurance fraud doing business in California to pay an annual special purpose assessment that does not exceed $0.20 per year for each insured under an individual or group insurance policy it issues in this state, in order to fund increased investigation and prosecution of fraudulent disability insurance claims. Existing law requires that 30% of those funds be distributed to the Fraud Division of the Department of Insurance for enhanced investigative efforts and that the other 70% be distributed to local district attorneys for the investigation and prosecution of disability insurance fraud cases, as specified. This bill would instead require that the annual special purpose assessment be paid for each person in this state covered under an individual or group policy regardless of the situs of the contract or master group policyholder, and regardless of whether the insured has been issued an individual certificate of coverage, including blanket insurance. The bill would also require that the data supporting the special purpose assessment not be required to be submitted more often than once each calendar year, except that responses to questions from the commissioner and clarifying information regarding the data would not be considered as additional submissions of data. The bill would authorize, for group and blanket insurance contracts, insurers to rely on information requested from and provided by the group policyholder after a reasonable effort to obtain timely and accurate information.