Insurance: special assessments.

(1) Existing law, until January 1, 2015, imposes on an insurer a $0.30 special purpose assessment on each vehicle insured under an insurance policy issued in this state by the insurer. Existing law specifies that $0.20 of each $0.30 special purpose assessment shall be used to fund specified consumer service functions of the Department of Insurance relating to motor vehicle insurance. Existing law further specifies that the remaining $0.10 of each $0.30 special purpose assessment shall be used to fund the improvement of certain consumer functions of the department. This bill would revise and recast those provisions, delete the date of repeal, and require a special purpose assessment of $0.25, commencing July 1, 2014, and until January 1, 2016, and not exceeding $0.25 thereafter, on each vehicle insured under an insurance policy issued in this state by the insurer. The bill would also specify that, upon appropriation, 23 of the special purpose assessment be used for the purpose of funding the consumer service functions of the department related to regulating automobile insurers, as provided, and 13 of the special purpose assessment be used for the purpose of improving consumer functions of the department, related to regulating automobile insurers, as specified. The bill would authorize the department, upon appropriation by the Legislature, to use up to $0.05 of the $0.25 special purpose assessment revenues collected to notify insurers and other members of the public about the existence of any low-cost automobile insurance program. (2) Existing law provides that each insurer doing business in this state shall pay an annual special purpose assessment to be determined by the Insurance Commissioner, but not to exceed $0.50 annually for each vehicle insured under an insurance policy the insurer issues in this state, in order to fund the Fraud Division and the Organized Automobile Fraud Activity Interdiction Program. Under existing law, of the funds collected, 42.5% are required to be distributed to district attorneys, 42.5% are required to be distributed to the department's Fraud Division, and 15% are required to be distributed to the Department of the California Highway Patrol, to be used as provided. Existing law provides that this assessment be repealed on January 1, 2015. This bill would revise and recast those provisions, delete the date of repeal, and make the distribution of funds by the commissioner upon appropriation by the Legislature. (3) Existing law creates the Life and Annuity Consumer Protection Fund as a special account within the Insurance Fund, and, until January 1, 2015, requires each insurer admitted to transact insurance in this state to pay a fee determined by the commissioner, not to exceed $1, for each individual life insurance policy and each individual annuity product that it issues to a resident of this state with a value of $15,000 or more. If an insurer elects to charge the purchaser of a life insurance policy or annuity product this fee, the fee is required to be set forth as a separate charge in the contract schedule or premium notice. The moneys in the Life and Annuity Consumer Protection Fund are to be distributed, as provided, and are required to be used exclusively for the purpose of protecting consumers of life insurance and annuity products in this state. Existing law requires that 50% of the moneys in the fund be distributed within the department for functions related to individual life insurance and annuity products, including, but not limited to, educating consumers in all aspects of life insurance and annuity products, consumer protection, purchasing and using insurance and annuity products, claim filing, benefit delivery, and dispute resolution. This bill would revise and recast those provisions, delete the date of repeal, and require that the moneys distributed by the commissioner, upon appropriation by the Legislature, fund the reasonable costs incurred in regulating entities transacting life insurance and annuity products in this state. The bill would delete the requirement that each individual life insurance policy and each individual annuity product have a value of $15,000 or more in order for the special assessment to apply. The bill would also require that instead of consumer education, the moneys in the fund distributed within the department for functions related to individual life insurance and annuity products be used to disseminate information to insurers, insureds, and others regarding the applicable regulation of life insurance and annuity products, including consumer protection, purchasing and using insurance and annuity products, claim filing, benefit delivery, and dispute resolution. (4) Existing law requires the Insurance Commissioner to, on or before the first day of August in each year, make a report to the Governor, the Legislature, and to the committees of the Senate and Assembly having jurisdiction over insurance containing specified information, including the condition of the insurance business and interests in this state. This bill would additionally require the annual report to contain information pertaining to consumer complaints, investigations, administrative and regulatory cases pertaining to automobile insurance, and revenue and expenditures relating to automobile insurance policy assessments, as specified.