Insurance: omnibus.

This bill would additionally make inactive the license of any licensee that is dissolved, forfeited, terminated, canceled, or surrendered by the Secretary of State.

(2) Existing law regulates the types and amounts of investments that insurers may make. Existing law establishes the California Organized Investment Network (COIN) within the department to pursue active measures to encourage insurers to make investments in California's underserved and low- and moderate-income communities. Existing law authorizes a domestic incorporated insurer to make discretionary investments after investment of an amount equal to its required minimum paid-in capital in specified securities. Under existing law, those discretionary investments may include the purchase of, or loans upon, properties and securities, but are limited to the lesser of 5% of the insurer's admitted assets or 50% of the excess of admitted assets over the sum of capital paid up, liabilities, and a required surplus. Existing law, until January 1, 2027, increases that limitation if the commissioner has approved the amount and terms of the investment in advance and COIN has identified the investment in an investment opportunity bulletin or otherwise deemed it to be a qualified investment.

This bill would indefinitely extend the increased limitation.

(3) Existing law sets forth various provisions for the regulation and licensing of production agencies.

This bill would specify those provisions generally apply to any applicant for a license issued by the commissioner or any licensee regulated by the commissioner, unless otherwise provided.

Existing law prohibits the commissioner from issuing a permanent license to an applicant unless the applicant has, within the 12-month period preceding the date of issue of the license, taken and passed the qualifying examination for that license.

This bill would toll that 12-month period during a review of the applicant's background information by the commissioner for an alleged violation that would, if proven, result in the suspension, revocation, or denial of the application, as specified. The bill would provide that background information also includes a judgment or order of restitution and a judgment or order assessing a fine or monetary penalty, excluding late fees. The bill would clarify that every licensee and applicant is required to promptly supply a complete written response to an inquiry from the commissioner relative to an application for, or the retention or renewal of, a license.

(4) Under existing law, if an organization licensed as certain agents desires to change, remove, or add to the natural persons who are to transact insurance under the authority of the organization's license, the organization is required to file an application or notice, as prescribed by the commissioner, for an endorsement. Existing law makes the license of an organization licensed as certain agents inoperative upon the removal or termination of the last natural person named under the organization's license, as specified.

This bill would apply the above-described provisions to organizations that are licensed as an accident and health or sickness agent.

Existing law authorizes the commissioner to issue to an eligible person a certificate of convenience, a temporary permit issued as a matter of convenience to allow the transaction of certain insurance without a permanent license. Existing law specifies certain categories of people who are eligible for an estate certificate of convenience, including, but not limited to, the executor or administrator of the estate of a deceased property broker-agent, casualty broker-agent, or life agent.

This bill would additionally include in the eligibility categories the executor or administrator of the estate of, the surviving spouse or heir otherwise entitled to conduct business of, and the conservator of the estate of, a deceased accident and health or sickness agent.

(5) Existing law requires the commissioner to ensure that the Fraud Division within the department aggressively pursues all reported incidents of probable workers' compensation fraud, as specified. Existing law requires specified funds to be distributed to district attorneys, as provided, for purposes of the investigation and prosecution of workers' compensation fraud cases. Existing law requires the department to report to the Governor, the Legislature, specified legislative committees, and the Fraud Assessment Commission on the activities of the Fraud Division and district attorneys supported by the funds. To meet that requirement, existing law requires the department to submit a biannual information request to those district attorneys who have received funding.

This bill would instead authorize the department to submit the biannual information request to meet that requirement.

(6) Existing law provides for an assigned risk plan for automobile insurance. Existing law requires the commissioner to administer and operate the plan as authorized by law and creates an advisory committee with which the commissioner is required to consult on a regular basis with respect to policy matters affecting the operation of the plan.

The bill would set a term of 2 years for noninsurer members of that advisory committee, to be staggered as specified.

(7) Existing law establishes the State Compensation Insurance Fund to be administered by a board of directors for the purpose of transacting workers' compensation insurance and other public employment-related insurances. Existing law requires the board to invest and reinvest all moneys in the fund in excess of current requirements in the same manner as is authorized in certain provisions applicable to private insurance carriers.

This bill would require the officers of the State Compensation Insurance Fund to provide an annual and quarterly investment report to the department, as specified.

(8) Existing law establishes the California Earthquake Authority (CEA), administered under the authority of the Insurance Commissioner and governed by a 3-member governing board, to transact insurance in this state as necessary to sell policies of basic residential earthquake insurance. Existing law sets forth the powers of the board to conduct the affairs of the CEA. Existing law requires the CEA to annually report on its financial capacity to pay claims, requires the Department of Finance to approve independent qualified auditors to examine the CEA's books and accounts, and requires the commissioner to file a certified report of the examination with specified persons. Under existing law, the CEA's employees are subject to civil service provisions.

This bill would require the CEA to select and retain independent qualified auditors, whose selection would be subject to the commissioner's approval, to examine the CEA's books and accounts and would specify their retention as a duty of the governing board. The bill would require that the CEA file the certified report of the examination. The bill would specify that the CEA's employees subject to civil service provisions are also subject to specified incompatible activities provisions.

(9) Existing law, the Public Insurance Adjusters Act, governs the regulation, licensing, and registration of public insurance adjusters. Existing law prohibits a licensee from acting as a public insurance adjuster without having first entered into a written contract. Existing law governs the form and content of the contract. Existing law requires a public adjuster who receives, accepts, or holds any funds on behalf of an insured towards the settlement of a claim to deposit the funds in a non-interest-bearing escrow or trust account, as specified, within 15 business days of receipt. Existing law makes a violation of the act a misdemeanor.

This bill would require the written contract to also include the licensee's email address and would clarify that the licensee's listed address is a California business address. The bill would instead require a public adjuster to deposit funds within 15 calendar days of receipt or, if the funds relate to a claim for loss or damage in an area that is or was subject to a catastrophic disaster or a state of emergency or a local emergency, within 7 calendar days of receipt. The bill would require a public adjuster to remit to the insured any funds received towards the settlement of a claim within 30 calendar days of receipt or, if the funds relate to an area that is or was subject to a catastrophic disaster or state of emergency or a local emergency, within 15 calendar days of receipt.

(10) This bill would make other technical changes relating to the calculation of adjusted premiums and present values for life insurance policies issued in a particular calendar year.

(11) By creating new requirements for certain insurance licensees, the violation of which constitutes a crime, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

(12) This bill would incorporate additional changes to Section 12928.7 of the Insurance Code proposed by SB 876 to be operative only if this bill and SB 876 are enacted and this bill is enacted last.