AB 447: Property insurance: discrimination.
- Session Year: 2015-2016
- House: Assembly
- Latest Version Date: 2015-10-02
Existing law prohibits an admitted insurer licensed to issue policies of residential property insurance from failing or refusing to accept an application for, or issuing a policy to an applicant for, that insurance, except as specified, or from canceling the insurance, under conditions less favorable to the insured than in other comparable cases, except for reasons applicable alike to persons of every sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, or sexual orientation. Existing law provides that sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, or sexual orientation shall not, of itself, constitute a condition or risk for which a higher rate, premium, or charge may be required of the insured.
Existing law also prohibits an application for one of these policies, or an insurance investigation report, from carrying any identification, or any requirement therefor, of the applicants sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, or sexual orientation.
This bill would, for specified types of real property, add certain other characteristics relating to the insured or the insured property to the categories that may not be used by an insurer for the purposes described above, including, under certain circumstances, the level or source of income and the receipt of government or public assistance by an individual or group of individuals residing or intending to reside upon the property, as specified.
Existing law prohibits an admitted insurer licensed to issue policies of residential property insurance from failing or refusing to accept an application for, or issuing a policy to an applicant for, that insurance, except as specified, or from canceling the insurance, under conditions less favorable to the insured than in other comparable cases, except for reasons applicable alike to persons of every sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, or sexual orientation. Existing law provides that sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, or sexual orientation shall not, of itself, constitute a condition or risk for which a higher rate, premium, or charge may be required of the insured.
Existing law also prohibits an application for one of these policies, or an insurance investigation report, from carrying any identification, or any requirement therefor, of the applicants sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, or sexual orientation.
This bill would, for specified types of real property, add certain other characteristics relating to the insured or the insured property to the categories that may not be used by an insurer for the purposes described above, including, under certain circumstances, the level or source of income and the receipt of government or public assistance by an individual or group of individuals residing or intending to reside upon the property, as specified.
Existing law prohibits an admitted insurer licensed to issue policies of residential property insurance from failing or refusing to accept an application for, or issuing a policy to an applicant for, that insurance, except as specified, or from canceling the insurance, under conditions less favorable to the insured than in other comparable cases, except for reasons applicable alike to persons of every sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, or sexual orientation. Existing law provides that sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, or sexual orientation shall not, of itself, constitute a condition or risk for which a higher rate, premium, or charge may be required of the insured.
Existing law also prohibits an application for one of these policies, or an insurance investigation report, from carrying any identification, or any requirement therefor, of the applicants sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, or sexual orientation.
This bill would, for specified types of real property, add certain other facts characteristics relating to the insured or the insured property to the categories that may not be used by an insurer for the purposes described above, including, under certain circumstances, the level or source of income and the receipt of government or public assistance. assistance by an individual or group of individuals residing or intending to reside upon the property, as specified.
Existing law prohibits an admitted insurer licensed to issue policies of residential property insurance from failing or refusing to accept an application for, or issuing a policy to an applicant for, that insurance, except as specified, or from canceling the insurance, under conditions less favorable to the insured than in other comparable cases, except for reasons applicable alike to persons of every sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, or sexual orientation. Existing law provides that sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, or sexual orientation shall not, of itself, constitute a condition or risk for which a higher rate, premium, or charge may be required of the insured.
Existing law also prohibits an application for one of these policies, or an insurance investigation report, from carrying any identification, or any requirement therefor, of the applicants sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, or sexual orientation.
This bill would would, for specified types of real property, add certain other facts relating to the insured or the insured property to the categories that may not be used by an insurer for the purposes described above, including, under certain circumstances, the method of financing and source of income. level or source of income and the receipt of government or public assistance.
Existing law prohibits an admitted insurer licensed to issue policies of residential property insurance from failing or refusing to accept an application for, or issuing a policy to an applicant for, that insurance, except as specified, or from canceling the insurance, under conditions less favorable to the insured than in other comparable cases, except for reasons applicable alike to persons of every sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, or sexual orientation. Existing law provides that sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, or sexual orientation shall not, of itself, constitute a condition or risk for which a higher rate, premium, or charge may be required of the insured.
Existing law also prohibits an application for one of these policies, or an insurance investigation report, from carrying any identification, or any requirement therefor, of the applicants sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, or sexual orientation.
This bill would add certain other classifications and facts relating to the insured or the insured property to the categories that may not be used by an insurer for the purposes described above. above, including, under certain circumstances, the method of financing and source of income.
This bill would also prohibit insurers issuing policies of commercial insurance for multifamily housing developments intended for low and moderate income families or agricultural employees and their families, as specified, from using a prohibited underwriting classification, as defined, to fail or refuse an application or issue a policy to an applicant, to cancel or fail to renew a policy, to charge a higher rate, premium, or charge, or to impose different requirements, as specified.
Existing law prohibits an admitted insurer licensed to issue policies of residential property insurance from failing or refusing to accept an application for, or issuing a policy to an applicant for, that insurance, except as specified, or from canceling the insurance, under conditions less favorable to the insured than in other comparable cases, except for reasons applicable alike to persons of every sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, or sexual orientation. Existing law provides that sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, or sexual orientation shall not, of itself, constitute a condition or risk for which a higher rate, premium, or charge may be required of the insured.
Existing law also prohibits an application for one of these policies, or an insurance investigation report, from carrying any identification, or any requirement therefor, of the applicants sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, or sexual orientation.
This bill would add certain other classifications and facts relating to the insured or the insured property to the categories that may not be used by an insurer for the purposes described above.
This bill would also prohibit insurers issuing policies of commercial insurance for multifamily housing developments intended for low and moderate income families or agricultural employees and their families, as specified, from using a prohibited underwriting classification, as defined, to fail or refuse an application or issue a policy to an applicant, to cancel or fail to renew a policy, to charge a higher rate, premium, or charge, or to impose different requirements, as specified.
(a)An admitted insurer that is licensed to issue a policy of insurance upon real property of the type described in paragraph (1) of subdivision (a) of Section 675 or paragraph (1) of subdivision (b) of Section 675.5, when that real property is used for residential purposes, or property of the type described in subdivision (a) of Section 10087, shall not fail or refuse to accept an application for, or to issue a policy to an applicant for, that insurance unless the insurance is to be issued to the applicant by another insurer under the same management and control, or cancel that insurance, based upon the following characteristics:
(1)The level or source of income of an individual or group of individuals residing or intending to reside upon the property to be insured, if the individual or group of individuals is not the owner of the real property.
(2)The receipt of assistance, intended for housing, from the federal or state government, or from a local public entity, as defined in Section 50079 of the Health and Safety Code, including, but not limited to, federal vouchers issued under Section 8 of the United States Housing Act of 1937 (42 U.S.C. Sec. 1437f), by an individual or group of individuals residing or intending to reside upon the property insured or to be insured.
(b)An application for a policy of insurance upon real property of the type described in subdivision (a), or an insurance investigation report furnished by an insurer to its agents or employees for use in determining the insurability of an applicant under such a policy, shall not carry any identification, or any requirement for identification, of the following characteristics:
(1)The level or source of income of an individual or group of individuals residing or intending to reside upon the property to be insured, if the individual or group of individuals is not the owner of the real property.
(2)The receipt of assistance, intended for housing, from the federal or state government, or from a local public entity, as defined in Section 50079 of the Health and Safety Code, including, but not limited to, federal vouchers issued under Section 8 of the United States Housing Act of 1937 (42 U.S.C. Sec. 1437f), by an individual or group of individuals residing or intending to reside upon the property insured or to be insured.
(c)In the case of real property of the type described in paragraph (1) of subdivision (a) of Section 675, paragraph (1) of subdivision (b) of Section 675.5, or subdivision (a) of Section 10087 that is used for both residential and commercial purposes, the insurer, or its agent or employee, may consider the source of income of a nonresidential tenant of the property in determining the insurability of an applicant.
(d)Nothing in this section prohibits an insurer from failing or refusing to accept an application for, issuing, or canceling or failing to renew, a policy of insurance covered by this chapter as a result of underwriting or assessment of factors other than those characteristics listed in subdivision (a), or as otherwise prohibited by law.
(a)An admitted insurer that is licensed to issue a policy of insurance upon real property of the type described in paragraph (1) of subdivision (a) of Section 675 or paragraph (1) of subdivision (b) of Section 675.5, when that real property is used for residential purposes, or property of the type described in subdivision (a) of Section 10087, shall not fail or refuse to accept an application for, or to issue a policy to an applicant for, that insurance unless the insurance is to be issued to the applicant by another insurer under the same management and control, or cancel that insurance, based upon the following characteristics:
(1)The level or source of income of an individual or group of individuals residing or intending to reside upon the property to be insured, if the individual or group of individuals is not the owner of the real property.
(2)The receipt of assistance, intended for housing, from the federal or state government, or from a local public entity, as defined in Section 50079 of the Health and Safety Code, including, but not limited to, federal vouchers issued under Section 8 of the United States Housing Act of 1937 (42 U.S.C. Sec. 1437f), by an individual or group of individuals residing or intending to reside upon the property insured or to be insured.
(b)An application for a policy of insurance upon real property of the type described in subdivision (a), or an insurance investigation report furnished by an insurer to its agents or employees for use in determining the insurability of an applicant under such a policy, shall not carry any identification, or any requirement for identification, of the following characteristics:
(1)The level or source of income of an individual or group of individuals residing or intending to reside upon the property to be insured, if the individual or group of individuals is not the owner of the real property.
(2)The receipt of assistance, intended for housing, from the federal or state government, or from a local public entity, as defined in Section 50079 of the Health and Safety Code, including, but not limited to, federal vouchers issued under Section 8 of the United States Housing Act of 1937 (42 U.S.C. Sec. 1437f), by an individual or group of individuals residing or intending to reside upon the property insured or to be insured.
(c)In the case of real property of the type described in paragraph (1) of subdivision (a) of Section 675, paragraph (1) of subdivision (b) of Section 675.5, or subdivision (a) of Section 10087 that is used for both residential and commercial purposes, the insurer, or its agent or employee, may consider the source of income of a nonresidential tenant of the property in determining the insurability of an applicant.
(d)Nothing in this section prohibits an insurer from failing or refusing to accept an application for, issuing, or canceling or failing to renew, a policy of insurance covered by this chapter as a result of underwriting or assessment of factors other than those characteristics listed in subdivision (a), or as otherwise prohibited by law.
(a)(1)An admitted insurer that is licensed to issue a policy of insurance upon real property of the type described in paragraph (1) of subdivision (a) of Section 675 or paragraph (1) of subdivision (b) of Section 675.5, when that real property is used for residential purposes, or property of the type described in subdivision (a) of Section 10087, shall not fail or refuse to accept an application for, or to issue a policy to an applicant for, that insurance unless the insurance is to be issued to the applicant by another insurer under the same management and control, or cancel that insurance, based upon the following characteristics:
(A)
(1)The level or source of income of an individual or group of individuals residing or intending to reside upon the property to be insured, if the individual or group of individuals is not the owner of the real property.
(B)
(2)The receipt of assistance, intended for housing, from the federal or state government, or from a local public entity, as defined in Section 50079 of the Health and Safety Code, including, but not limited to, federal vouchers issued under Section 8 of the United States Housing Act of 1937 (42 U.S.C. Sec. 1437f), by an individual or group of individuals residing or intending to reside upon the property insured or to be insured.
(2)The characteristics listed in subparagraphs (A) and (B) of paragraph (1) shall not constitute a condition or risk for which a higher rate, premium, or charge may be required of the insured for a policy of insurance upon real property of the type described in paragraph (1).
(b)An application for a policy of insurance upon real property of the type described in paragraph (1) of subdivision (a), or an insurance investigation report furnished by an insurer to its agents or employees for use in determining the insurability of an applicant under such a policy, shall not carry any identification, or any requirement for identification, of the following characteristics:
(1)The level or source of income of an individual or group of individuals residing or intending to reside upon the property to be insured, if the individual or group of individuals is not the owner of the real property.
(2)The receipt of assistance, intended for housing, from the federal or state government, or from a local public entity, as defined in Section 50079 of the Health and Safety Code, including, but not limited to, federal vouchers issued under Section 8 of the United States Housing Act of 1937 (42 U.S.C. Sec. 1437f), by an individual or group of individuals residing or intending to reside upon the property insured or to be insured.
(c)In the case of real property of the type described in paragraph (1) of subdivision (a) of Section 675, paragraph (1) of subdivision (b) of Section 675.5, or subdivision (a) of Section 10087 that is used for both residential and commercial purposes, the insurer, or its agent or employee, may consider the source of income of a nonresidential tenant of the property in determining the insurability of an applicant.
(d)Nothing in this section prohibits an insurer from failing or refusing to accept an application for, issuing, or canceling or failing to renew, a policy of insurance covered by this chapter as a result of underwriting or assessment of factors other than those characteristics listed in subdivision (a), or as otherwise prohibited by law.
(a)(1)An admitted insurer that is licensed to issue a policy of insurance upon real property of the type described in paragraph (1) of subdivision (a) of Section 675 or paragraph (1) of subdivision (b) of Section 675.5, when that real property is used for residential purposes, or property of the type described in subdivision (a) of Section 10087, shall not fail or refuse to accept an application for, or to issue a policy to an applicant for, that insurance unless the insurance is to be issued to the applicant by another insurer under the same management and control, or cancel that insurance, based upon the following characteristics:
(A)The level or source of income of an individual or group of individuals residing or intending to reside upon the property to be insured, if the individual or group of individuals is not the owner of the real property.
(B)The receipt of assistance, intended for housing, from the federal or state government, or from a local public entity, as defined in Section 50079 of the Health and Safety Code, including, but not limited to, federal vouchers issued under Section 8 of the United States Housing Act of 1937 (42 U.S.C. Sec. 1437f), by an individual or group of individuals residing or intending to reside upon the property insured or to be insured.
(2)The characteristics listed in subparagraphs (A) and (B) of paragraph (1) shall not constitute a condition or risk for which a higher rate, premium, or charge may be required of the insured for a policy of insurance upon real property of the type described in paragraph (1).
(b)An application for a policy of insurance upon real property of the type described in paragraph (1) of subdivision (a), or an insurance investigation report furnished by an insurer to its agents or employees for use in determining the insurability of an applicant under such a policy, shall not carry any identification, or any requirement for identification, of the following characteristics:
(1)The level or source of income of an individual or group of individuals residing or intending to reside upon the property to be insured, if the individual or group of individuals is not the owner of the real property.
(2)The receipt of assistance, intended for housing, from the federal or state government, or from a local public entity, as defined in Section 50079 of the Health and Safety Code, including, but not limited to, federal vouchers issued under Section 8 of the United States Housing Act of 1937 (42 U.S.C. Sec. 1437f), by an individual or group of individuals residing or intending to reside upon the property insured or to be insured.
(c)In the case of real property of the type described in paragraph (1) of subdivision (a) of Section 675, paragraph (1) of subdivision (b) of Section 675.5, or subdivision (a) of Section 10087 that is used for both residential and commercial purposes, the insurer, or its agent or employee, may consider the source of income of a nonresidential tenant of the property in determining the insurability of an applicant.
SECTION 1.Section 679.71 of the Insurance Code is amended to read:679.71.(a)An admitted insurer, licensed to issue any policy of insurance covered by this chapter, shall not fail or refuse to accept an application for, or to issue a policy to an applicant for, that insurance (unless the insurance is to be issued to the applicant by another insurer under the same management and control), or cancel that insurance, under conditions less favorable to the insured than in other comparable cases, except for reasons applicable alike to persons of every characteristic listed or defined in subdivision (b) or (e) of Section 51 of the Civil Code; nor shall any of those characteristics, of themselves, constitute a condition or risk for which a higher rate, premium, or charge may be required of the insured for that insurance.
(b)In the limited case of a policy of insurance for real property designed for human habitation, the following shall also be considered characteristics for the purposes of subdivision (a):
(1)The method of financing for the property insured or to be insured.
(2)The level or source of income of an individual or group of individuals residing or intending to reside upon the property insured or to be insured.
(3)The receipt of assistance, intended for housing, from the federal or state government, or from a local public entity, as defined in Section 50079 of the Health and Safety Code, including, but not limited to, federal vouchers issued under Section 8 of the United States Housing Act of 1937 (42 U.S.C. Sec. 1437f), by an individual or group of individuals residing or intending to reside upon the property insured or to be insured.
SEC. 2.Section 679.72 of the Insurance Code is amended to read:679.72.(a)An application for insurance specified in this chapter or insurance investigation report furnished by an insurer to its agents or employees for use in determining the insurability of an applicant shall not carry any identification, or any requirement therefor, of any characteristic listed or defined in subdivision (b) or (e) of Section 51 of the Civil Code with respect to the applicant.
(b)In the limited case of a policy of insurance for real property designed for human habitation, the following shall also be considered characteristics for the purposes of subdivision (a):
(1)The method of financing for the property insured or to be insured.
(2)The level or source of income of an individual or group of individuals residing or intending to reside upon the property insured or to be insured.
(3)The receipt of assistance, intended for housing, from the federal or state government, or from a local public entity, as defined in Section 50079 of the Health and Safety Code, including, but not limited to, federal vouchers issued under Section 8 of the United States Housing Act of 1937 (42 U.S.C. Sec. 1437f), by an individual or group of individuals residing or intending to reside upon the property insured or intending to be insured.
SEC. 3.Section 679.73 of the Insurance Code is amended to read:679.73.This chapter shall not prohibit the use in an application for insurance specified in this chapter of a question asking for the birthplace of an applicant if that question is used only to identify the applicant and not to discriminate against the applicant.
No (a)An admitted insurer, licensed to issue any policy of insurance covered by this chapter, shall not fail or refuse to accept an application for, or to issue a policy to an applicant for, that insurance (unless the insurance is to be issued to the applicant by another insurer under the same management and control), or cancel that insurance, under conditions less favorable to the insured than in other comparable cases, except for reasons applicable alike to persons of every marital status, sex, race, color, religion, national origin, sexual orientation, creed, disability, familial status, medical condition, ancestry, or any other characteristic listed in Section 51.5 of the Civil Code or Section 12920 of the Government Code; characteristic listed or defined in subdivision (b) or (e) of Section 51 of the Civil Code; nor shall marital status, sex, race, color, religion, national origin, or ancestry, or any other characteristic listed in Section 51.5 of the Civil Code or Section 12920 of the Government Code, any of those characteristics, of itself, themselves, constitute a condition or risk for which a higher rate, premium, or charge may be required of the insured for that insurance.
(b)In the limited case of a policy of insurance for real property designed for human habitation, the following shall also be considered characteristics for the purposes of subdivision (a):
(1)The method of financing for the property insured or to be insured.
(2)The level or source of income of an individual or group of individuals residing or intending to reside upon the property insured or to be insured.
(3)The receipt of assistance, intended for housing, from the federal or state government, or from a local public entity, as defined in Section 50079 of the Health and Safety Code, including, but not limited to, federal vouchers issued under Section 8 of the United States Housing Act of 1937 (42 U.S.C. Sec. 1437f), by an individual or group of individuals residing or intending to reside upon the property insured or to be insured.
SEC. 2.Section 679.72 of the Insurance Code is amended to read:679.72.(a)An application for insurance specified in this chapter or insurance investigation report furnished by an insurer to its agents or employees for use in determining the insurability of an applicant shall not carry any identification, or any requirement therefor, of the applicants sex, race, color, religion, national origin, sexual orientation, creed, disability, familial status, medical condition, ancestry, or any other characteristic listed in Section 51.5 of the Civil Code or Section 12920 of the Government Code. any characteristic listed or defined in subdivision (b) or (e) of Section 51 of the Civil Code with respect to the applicant.
(b)In the limited case of a policy of insurance for real property designed for human habitation, the following shall also be considered characteristics for the purposes of subdivision (a):
(1)The method of financing for the property insured or to be insured.
(2)The level or source of income of an individual or group of individuals residing or intending to reside upon the property insured or to be insured.
(3)The receipt of assistance, intended for housing, from the federal or state government, or from a local public entity, as defined in Section 50079 of the Health and Safety Code, including, but not limited to, federal vouchers issued under Section 8 of the United States Housing Act of 1937 (42 U.S.C. Sec. 1437f), by an individual or group of individuals residing or intending to reside upon the property insured or intending to be insured.
SEC. 3.Section 679.73 of the Insurance Code is amended to read:679.73.This chapter shall not prohibit the use in an application for insurance specified in this chapter of a question asking for the birthplace of an applicant if that question is used only to identify the applicant and not to discriminate against the applicant.
SEC. 4.Section 679.74 is added to the Insurance Code, to read:679.74.(a)This section shall apply to any policy of commercial insurance for multifamily housing developments intended for occupancy by persons and families of low and moderate income, as defined in Sections 50073, 50073.5, and 50093 of the Health and Safety Code, or agricultural employees, as defined in subdivision (b) of Section 1140.4 of the Labor Code, and their families that covers risks arising from the ownership, construction, habitation, or other use of real property designed for human habitation on either a temporary or permanent basis, including any liability for loss of, damage to, or injury to, persons or property that occurs on that real property.
(b)For the purposes of this section, prohibited underwriting classification means any of the following:
(1)All the protected classes in Section 679.71.
(2)The income level or source of income, including, but not limited to, federal vouchers issued under Section 8 of the United States Housing Act of 1937 (42 U.S.C. Sec. 1437f), of an individual or group of individuals residing or to reside upon property insured or to be insured by, a policy of insurance covered by this section.
(3)The intended residency upon the property insured or to be insured by persons who require or will benefit from supportive services that may be provided on site.
(4)The fact that the construction or operation of the real property, or any portion thereof, is subsidized, financed, insured, or otherwise assisted by the federal or state government, or by a local public entity, as defined in Section 50079 of the Health and Safety Code.
(5)The fact that an applicant or insured is organized under the Nonprofit Corporation Law (Division 2 (commencing with Section 5000) of the Corporations Code). The amount of rent charged to an individual or group of individuals residing or who will reside upon property insured or to be insured by a policy of insurance covered by this section.
(6)The amount of rent charged to an individual or group of individuals residing, or who will reside, upon property insured, or to be insured, by a policy of insurance covered by this section.
(c)An insurer meeting the criteria of subdivision (a) shall not use a prohibited underwriting classification to do any of the following:
(1)Fail or refuse to accept an application or issue a policy to an applicant for, or otherwise make unavailable, any insurance covered by this chapter, unless the insurance is to be issued to the applicant by another insurer under the same management and control.
(2)Cancel or fail to renew any insurance covered by this section.
(3)Impose a rate, premium, or charge that is higher than that imposed with respect to other applicants, insureds, or insured properties.
(4)Impose different requirements on an applicant for insurance covered by this chapter than it imposes on other applicants, except as provided in subdivision (d).
(d)This section shall not be construed to prohibit any admitted insurer licensed to issue any policy of insurance covered by this chapter from extending preferential treatment to real property designed for human habitation that is assisted by the federal or state government, or by a local public entity, as defined in Section 50079 of the Health and Safety Code, or other real property intended for occupancy by persons and families of low and moderate income, as defined in Section 50093 of the Health and Safety Code, or agricultural employees, as defined in subdivision (b) of Section 1140.4 of the Labor Code, and their families.
No admitted insurer that is insurer, licensed to issue any policy of insurance covered by this chapter chapter, shall fail or refuse to accept an application for, or to issue a policy to an applicant for, that insurance (unless the insurance is to be issued to the applicant by another insurer under the same management and control), or cancel that insurance, under conditions less favorable to the insured than in other comparable cases, except for reasons applicable alike to persons of every characteristic listed or defined in subdivision (b) or (e) of Section 51 of the Civil Code; nor shall any of those characteristics, of itself, constitute a condition or risk for which a higher rate, premium, or charge may be required of the insured for that insurance. marital status, sex, race, color, religion, national origin, sexual orientation, creed, disability, familial status, medical condition, ancestry, or any other characteristic listed in Section 51.5 of the Civil Code or Section 12920 of the Government Code; nor shall marital status, sex, race, color, religion, national origin, or ancestry, or any other characteristic listed in Section 51.5 of the Civil Code or Section 12920 of the Government Code, of itself, constitute a condition or risk for which a higher rate, premium, or charge may be required of the insured for that insurance.
SEC. 2.Section 679.72 of the Insurance Code is amended to read:679.72.No An application for insurance specified in this chapter or insurance investigation report furnished by an insurer to its agents or employees for use in determining the insurability of an applicant shall not carry any identification, or any requirement therefor, of any characteristic listed or defined in subdivision (b) or (e) of Section 51 of the Civil Code with respect to the applicant. the applicants sex, race, color, religion, national origin, sexual orientation, creed, disability, familial status, medical condition, ancestry, or any other characteristic listed in Section 51.5 of the Civil Code or Section 12920 of the Government Code.
SEC. 3.Section 679.73 of the Insurance Code is amended to read:679.73.Nothing in this This chapter shall not prohibit the use in an application for insurance specified in this chapter of a question asking for the birthplace of an applicant if such that question is used only to identify the applicant and not to discriminate against the applicant.
SEC. 4.Section 679.74 is added to the Insurance Code, to read:679.74.(a)This section shall apply to any policy of commercial insurance for multifamily housing developments intended for occupancy by persons and families of low and moderate income, as defined in Sections 50073, 50073.5, and 50093 of the Health and Safety Code, or agricultural employees, as defined in subdivision (b) of Section 1140.4 of the Labor Code, and their families that covers risks arising from the ownership, construction, habitation, or other use of real property designed for human habitation on either a temporary or permanent basis, including any liability for loss of, damage to, or injury to, persons or property that occurs on that real property.
(b)For the purposes of this section, prohibited underwriting classification means any of the following:
(1)All the protected classes in Section 679.71.
(2)The income level or source of income, including, but not limited to, federal vouchers issued under Section 8 of the United States Housing Act of 1937 (42 U.S.C. Sec. 1437f), of an individual or group of individuals residing or to reside upon property insured or to be insured by, a policy of insurance covered by this section.
(3)The intended residency upon the property insured or to be insured by persons who require or will benefit from supportive services that may be provided on site.
(4)The fact that the construction or operation of the real property, or any portion thereof, is subsidized, financed, insured, or otherwise assisted by the federal or state government, or by a local public entity, as defined in Section 50079 of the Health and Safety Code.
(5)The fact that an applicant or insured is organized under the Nonprofit Corporation Law (Division 2 (commencing with Section 5000) of the Corporations Code). The amount of rent charged to an individual or group of individuals residing or who will reside upon property insured or to be insured by a policy of insurance covered by this section.
(6)The amount of rent charged to an individual or group of individuals residing, or who will reside, upon property insured, or to be insured, by a policy of insurance covered by this section.
(c)An insurer meeting the criteria of subdivision (a) shall not use a prohibited underwriting classification to do any of the following:
(1)Fail or refuse to accept an application or issue a policy to an applicant for, or otherwise make unavailable, any insurance covered by this chapter, unless the insurance is to be issued to the applicant by another insurer under the same management and control.
(2)Cancel or fail to renew any insurance covered by this section.
(3)Impose a rate, premium, or charge that is higher than that imposed with respect to other applicants, insureds, or insured properties.
(4)Impose different requirements on an applicant for insurance covered by this chapter than it imposes on other applicants, except as provided in subdivision (d).
(d)This section shall not be construed to prohibit any admitted insurer licensed to issue any policy of insurance covered by this chapter from extending preferential treatment to real property designed for human habitation that is assisted by the federal or state government, or by a local public entity, as defined in Section 50079 of the Health and Safety Code, or other real property intended for occupancy by persons and families of low and moderate income, as defined in Section 50093 of the Health and Safety Code, or agricultural employees, as defined in subdivision (b) of Section 1140.4 of the Labor Code, and their families.
|
Date
|
Status
|
|---|---|
| Jun 18, 2015 | Referred to Com. on INS. |
| Oct 2, 2015 | Chaptered by Secretary of State - Chapter 432, Statutes of 2015. |
| Oct 2, 2015 | Approved by the Governor. |
| Sep 14, 2015 | Enrolled and presented to the Governor at 4 p.m. |
| Sep 2, 2015 | Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 72. Noes 6.). |
| Sep 2, 2015 | Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 72. Noes 6. Page 2769.). |
| Aug 31, 2015 | Read third time. Passed. Ordered to the Assembly. (Ayes 30. Noes 2. Page 2278.). |
| Aug 31, 2015 | Read third time. Passed. Ordered to the Assembly. |
| Aug 31, 2015 | In Assembly. Concurrence in Senate amendments pending. May be considered on or after September 2 pursuant to Assembly Rule 77. |
| Jul 9, 2015 | Read second time. Ordered to third reading. |
| Jul 8, 2015 | From committee: Do pass. (Ayes 6. Noes 1.) (July 8). |
| Jun 30, 2015 | From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on INS. |
| Feb 23, 2015 | Read first time. To print. |
| Jun 4, 2015 | Read third time. Passed. Ordered to the Senate. (Ayes 75. Noes 4. Page 1906.) |
| Jun 4, 2015 | Read third time. Passed. Ordered to the Senate. |
| Jun 4, 2015 | In Senate. Read first time. To Com. on RLS. for assignment. |
| Jun 2, 2015 | Read third time and amended. Ordered to third reading. (Page 1760.) |
| Jun 2, 2015 | Read third time and amended. Ordered to third reading. |
| May 7, 2015 | Read second time. Ordered to third reading. |
| May 6, 2015 | From committee: Do pass. (Ayes 11. Noes 1.) (May 6). |
| Apr 30, 2015 | Re-referred to Com. on INS. |
| Apr 29, 2015 | From committee chair, with author's amendments: Amend, and re-refer to Com. on INS. Read second time and amended. |
| Mar 5, 2015 | Referred to Com. on INS. |
| Feb 24, 2015 | From printer. May be heard in committee March 26. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Sep 2, 2015 | AB 447 MAIENSCHEIN Concurrence in Senate Amendments | Assembly Floor |
Passed |
|
| Aug 31, 2015 | Assembly 3rd Reading AB447 Maienschein By Lara | Senate Floor |
Passed |
|
| Jul 8, 2015 | Do pass | Senate Standing Committee on Insurance |
Passed |
|
| Jun 4, 2015 | AB 447 MAIENSCHEIN Assembly Third Reading | Assembly Floor |
Passed |
|
| May 6, 2015 | Do pass. | Assembly Standing Committee on Insurance |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| American Insurance Association | ** Against | Aug 31, 2015 |
| Association Of California Insurance Companies | ** Against | Aug 31, 2015 |
| California Apartment Association | ** Support | Aug 31, 2015 |
| California Coalition For Rural Housing | ** Support | Aug 31, 2015 |
| California Housing Consortium | ** Support | Aug 31, 2015 |
| City Of Berkeley Rent Stabilization Board | ** Support | Aug 31, 2015 |
| Community Housing Works | ** Support | Aug 31, 2015 |
| Corporation For Supportive Housing | ** Support | May 6, 2015 |
| Downtown Women's Center | ** Support | Aug 31, 2015 |
| First Place for Youth | ** Support | Aug 31, 2015 |
| Housing California | ** Support | Aug 31, 2015 |
| Housing Leadership Council of San Mateo County | ** Support | Aug 31, 2015 |
| Independent Insurance Agents & Brokers of California | * Neutral | May 6, 2015 |
| Law Foundation of Silicon Valley | ** Support | Aug 31, 2015 |
| LINC Housing | ** Support | Aug 31, 2015 |
| Mutual Housing California Project Sentinel | ** Support | May 6, 2015 |
| National Association Of Insurance And Financial Advisors - Ca | * Neutral | May 6, 2015 |
| National Association of Mutual Insurance Companies | ** Against | May 6, 2015 |
| Northern Circle Indian Housing Authority | ** Support | Aug 31, 2015 |
| Pacific Association Of Domestic Insurance Companies | * Neutral | May 6, 2015 |
| Pacific Association Of Domestic Insurance Companies | * Against | May 6, 2015 |
| PATH Ventures | ** Support | Aug 31, 2015 |
| Personal Insurance Federation | * Neutral | May 6, 2015 |
| Personal Insurance Federation Of California | * Against | May 6, 2015 |
| Project Sentinel | ** Support | Aug 31, 2015 |
| Rural Community Assistance Corporation | ** Support | May 6, 2015 |
| San Diego County Apartment Association | ** Support | Aug 31, 2015 |
| Skid Row Housing Trust | ** Support | Aug 31, 2015 |
| UC Berkeley Institute of Transportation Studies | ** Support | May 6, 2015 |
| Western Center On Law And Poverty Inc. | ** Support | Aug 31, 2015 |
AB 447
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 447
(Maienschein)
As Amended June 30, 2015
Majority vote
ASSEMBLY: |
75-4 |
(June 4, 2015) |
SENATE: |
30-2 |
(August 31, 2015) |
Original Committee Reference: INS.
SUMMARY: Prohibits discrimination based on renters' receipt of "Section 8" or related public rent subsidies in the application for or issuance of insurance policies covering real property designed for human habitation.
The Senate amendments:
Delete the prohibition on using this bill's prohibited factors for purposes of pricing insurance.
Clarify that nothing in this bill prohibits using factors not prohibited by this bill, even if the prohibited factors are a characteristic of the property.
EXISTING LAW:
Prohibits an insurer from using sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, or sexual orientation under conditions less favorable to the insured than in other comparable cases, for purposes of accepting applications for, issuing policies of, canceling policies of property or commercial insurance.
Prohibits using any of these characteristics as a condition or risk to justify charging a policyholder a higher rate, premium, or charge for the insurance.
FISCAL EFFECT: Undetermined. This bill is keyed non-fiscal by the Legislative Counsel.
COMMENTS: The Senate amendments narrow this bill by eliminating the prohibition on using Section 8 status as a basis for rating policies. As a practical effect, it is unlikely that Section 8 status, of itself, would pass muster in the Proposition 103 (1988) rate review process administered by the Department of Insurance. Some insurers prefer to use Section 8 status of renters as a surrogate for other, more specific factors, or as a "red flag" to conduct additional investigation to evaluate "condition of the property" issues that may be legitimate rating factors.
Analysis Prepared by: Mark Rakich / INS. / (916) 319-2086 FN: 0001230
AB 447
Page 6
|
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 |
THIRD READING
Bill No: AB 447
Author: Maienschein (R), et al.
Amended: 6/30/15 in Senate
SENATE INSURANCE COMMITTEE: 6-1, 7/8/15
AYES: Roth, Glazer, Hall, Hernandez, Liu, Wieckowski
NOES: Gaines
NO VOTE RECORDED: Berryhill, Mitchell
ASSEMBLY FLOOR: 75-4, 6/4/15 - See last page for vote
SUBJECT: Property insurance: discrimination
SOURCE: California Coalition for Rural Housing
Housing California
Western Center on Law and Poverty
DIGEST: This bill prohibits an insurer admitted to issue insurance policies covering real property designed for human habitation (including single family homes, condominiums and multiunit commercial apartments) from failing or refusing to accept an application for insurance, issue a policy to an applicant for insurance, or cancel a policy based on the source of income of residential tenants or the receipt of housing assistance by tenants from the federal or state government or from a local public entity; and prohibits the insurer from requiring this information on the application for insurance, as specified.
Existing law:
Prohibits an admitted insurer from using sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, or sexual orientation under conditions less favorable to the insured than in other comparable cases, for purposes of accepting applications for, issuing policies of, or cancelling policies of property or commercial insurance.
Prohibits using any of these characteristics as a condition or risk to justify charging a policyholder a higher rate, premium, or charge for insurance.
Prohibits applications for insurance, as specified, from including any identification of, or requiring an applicant to provide, any information as to these characteristics.
Requires, under the Insurance Rate Reduction and Reform Act (Proposition 103, as approved by the voters in 1988), specified insurance rates to be approved by the Insurance Commissioner (IC) prior to their use.
This bill:
Prohibits an insurer admitted in California to issue insurance policies covering real property designed for human habitation, including single family homes, condominiums and multiunit commercial apartment buildings, from failing or refusing to accept an application for insurance, issue a policy to an applicant for insurance, or cancel a policy based on the following characteristics:
The level or source of income of an individual or group of people residing or intending to reside upon the property to be insured, if they do not own the property.
The receipt of assistance, intended for housing, from the federal or state government, or from a local public entity, as defined, including “Section 8” vouchers, by an individual or group of people residing or intending to reside upon the property.
Prohibits an application for insurance, or a report furnished by an insurer for use in determining eligibility for insurance, from having any identification of, or requirement to provide information as to the characteristics in 1) above.
Provides that if a property is used for both residential and commercial purposes, the insurer may consider the source of income for the non-residential tenant in determining the insurability of an applicant.
Specifies that an insurer is not prohibited from failing or refusing to accept an application, issuing, canceling or failing to renew, a policy as a result of underwriting based on any and all factors other than those expressly prohibited.
Background
Unlike in the highly regulated auto insurance market, there are relatively few limitations on insurer underwriting and pricing in the property insurance market. Insurers must, however, submit their rates for prior approval of the IC under Proposition 103. Insurers may use a variety of factors and characteristics to assess the risk associated with insuring the property, including location, structural condition, age, design, management of the property, ownership, maintenance, hazards on the property, tenants and tenant mix, presence of safety devices such as fire and smoke alarms, lighting, sports facilities or swimming pools. Some insurers look at the presence of subsidized tenants as a factor in evaluating the property’s underwriting risk, and according to the proponents, some insurers have not offered certain products, or cancelled policies, because of the presence of subsidized tenants.
As a matter of public policy, insurers are prohibited from arbitrary and unreasonable discrimination against the protected classes of the Unruh Civil Rights Act. Those classes include age, ancestry, color, disability, genetic information, marital status, national origin, race, religion, sex, and sexual orientation.
The U.S. Supreme Court took a broad approach to housing discrimination in its recent decision in Texas Department of Housing and Community Affairs v. Inclusive Communities Project, holding that under the federal Fair Housing Act it is enough to show that minorities are negatively affected, even if no intent to discriminate has been found.
The Housing Choice Voucher Program (Section 8) is the federal government's major program for assisting very low-income families, the elderly, and the disabled to afford decent, safe, and sanitary housing in the private market. Since housing assistance is provided on behalf of the family or individual, participants are able to find their own housing, including single-family homes, townhouses and apartments. The participant is free to choose any housing that meets the requirements of the program and is not limited to units located in subsidized housing projects. A family that is issued a housing voucher is responsible for finding a suitable housing unit of the family's choice where the owner agrees to rent under the program. Rental units must meet minimum standards of health and safety and the housing subsidy is paid to the landlord directly by the public housing authority on behalf of the participating family. The family then pays the difference between the actual rent charged by the landlord and the amount subsidized by the program. Similar state and local government programs that are similar in purpose are also included in this bill.
Nothing in AB 447 prevents an insurance company from underwriting the property for any and all risks, or from declining to insure a property for any number of reasons. The insurer would not, however, be able to not offer insurance to the category of properties that allow subsidized tenants. This bill was prompted in part by one company that has refused to offer an apartment policy product to owners of subsidized, public or government funded complexes, claiming these properties present unknown, complex, specialized or higher risk exposures. It further justified its position because the market is adequately covered by surplus lines, specialty and niche insurers, risk retention groups and other insurers that have particular expertise with subsidized, public or government funded housing. The insurer in that case had a standard apartment insurance policy and apparently did no on-site investigations or underwriting of a property prior to issuing a policy if information provided on the application met specified criteria. It should be noted that surplus lines insurers are not admitted or licensed to offer insurance in California, and this bill and the anti-discrimination provision generally, applies only to admitted insurers.
The fundamental question is whether an insurer should be able to treat similarly situated properties differently based on the presence of subsidized tenants. The insurer would be able to use the underwriting process to determine if the property actually posed an unacceptable risk, for example if the building was not properly maintained, if it posed higher safety concerns, or if it had a history of claims.
FISCAL EFFECT: Appropriation: No Fiscal Com.: No Local: No
California Coalition for Rural Housing (co-source)
Housing California (co-source)
Western Center on Law and Poverty (co-source)
California Apartment Association
California Housing Consortium
City of Berkeley Rent Stabilization Board
Community Housing Works
Downtown Women’s Center
First Place for Youth
Housing Leadership Council of San Mateo County
Law Foundation of Silicon Valley
LINC Housing
Northern Circle Indian Housing Authority
Path Ventures
Project Sentinel
Sacramento Homeless Organizing Committee
San Diego County Apartment Association
Skid Row Housing Trust
American Insurance Association
Association of California Insurance Companies
ARGUMENTS IN SUPPORT: Proponents of this bill argue that some insurers have discriminated against property owners who participate in housing assistance programs, treating similarly situated properties differently, or refusing to offer or renew policies, simply because of the presence of tenants who have availed themselves of legitimate government benefits. This serves as a disincentive for property owners to participate in these important affordable housing programs, particularly in high-cost California. The California Apartment Association (CAA) supports AB 447 because admitted insurers in California have ben refusing to cover properties that accept Housing Choice Vouchers, forcing CAA members to obtain significantly more expensive coverage from non-admitted insurers or terminate their participation in the Voucher program. The viability of the Housing Choice Voucher Program is entirely dependent on the availability of housing in the private market.
ARGUMENTS IN OPPOSITION: According to the American Insurance Association, AB 447 forces property insurers to provide coverage of rental properties without the ability to properly evaluate risk. Restrictions and limitations on underwriting adversely affect the ability of carriers to properly rate and make coverage determinations. Currently, there is market availability of insurance for multi-family low-income or rent subsidized rental properties from admitted insurers, surplus lines carriers, specialty and niche carriers and risk retention groups. There is no need to force property insurers to provide insurance without the ability to consider all relevant factors that may affect the risks being insured. According to the Association of California Insurance Companies, absent an availability crisis, and with rates approved by the California Department of Insurance, it seems inappropriate to place restrictions on a company’s underwriting ability.
ASSEMBLY FLOOR: 75-4, 6/4/15
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, O'Donnell, Olsen, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins
NOES: Beth Gaines, Gallagher, Levine, Patterson
NO VOTE RECORDED: Obernolte
Prepared by: Erin Ryan / INS. / (916) 651-4110
8/20/15 16:20:41
**** END ****
AB 447 (Maienschein) Page 5 of 5
SENATE COMMITTEE ON INSURANCE
Senator Richard Roth, Chair
2015 - 2016 Regular
Bill No: AB 447 Hearing Date: July 8, 2015
Author: |
Maienschein |
||
Version: |
June 2, 2015 Amended |
||
Urgency: |
No |
Fiscal: |
No |
Consultant: |
Erin Ryan |
||
Subject: Property insurance: discrimination.
SUMMARY
Prohibits an insurer admitted to issue insurance policies covering real property designed for human habitation, including single family homes, condominiums and multiunit commercial apartments, from failing or refusing to accept an application for, issue a policy to an applicant for insurance, or cancel a policy based on the source of income of residential tenants or the receipt of housing assistance by tenants from the federal or state government or from a local public entity, and prohibits the insurer from requiring this information on the application for insurance, as specified.
DIGEST
Existing law
Prohibits an admitted insurer from using sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, or sexual orientation under conditions less favorable to the insured than in other comparable cases, for purposes of accepting applications for, issuing policies of, or cancelling policies of property or commercial insurance.
Prohibits using any of these characteristics as a condition or risk to justify charging a policyholder a higher rate, premium, or charge for insurance.
Prohibits applications for insurance, as specified, from including any identification of, or requiring an applicant to provide, any information as to these characteristics.
The Insurance Rate Reduction and Reform Act (Proposition 103, as approved by the voters in 1988) (Prop. 103), requires specified insurance rates to be approved by the Insurance Commissioner (IC) prior to their use.
This bill
Prohibits an insurer admitted in California to issue insurance policies covering real property designed for human habitation, including single family homes, condominiums and multiunit commercial, from failing or refusing to accept an application for, issue a policy to an applicant for insurance, or cancel a policy based on the following characteristics:
The level or source of income of an individual or group of people residing or intending to reside upon the property to be insured, if they do not own the property;
The receipt of assistance, intended for housing, from the federal or state government, or from a local public entity, as defined, including “Section 8” vouchers, by an individual or group of people residing or intending to reside upon the property.
Prohibits an application for insurance, or a report furnished by an insurer for use in determining eligibility for insurance, from having any identification of, or requirement to provide information as to the characteristics in paragraph 1, above.
Provides that if a property is used for both residential and commercial purposes, the insurer may consider the source of income for the non-residential tenant in determining the insurability of an applicant.
Specifies that nothing in the bill prohibits an insurer from failing or refusing to accept an application, issuing, canceling or failing to renew, a policy as a result of underwriting based on any and all factors other than those expressly prohibited.
COMMENTS
Purpose of the bill To prohibit insurers from using the source of income of, or the use of state or federal housing assistance by, tenants as a basis to decide whether to accept an application by the property owner for property insurance, because it is viewed as a discriminatory practice.
Background Unlike in the highly regulated auto insurance market, there are relatively few limitations on insurer underwriting and pricing in the property insurance market. Insurers must, however, submit their rates for prior approval of the IC under Prop. 103. Insurers may use a variety of factors and characteristics to assess the risk associated with insuring the property, including location, structural condition, age, design, management of the property, ownership, maintenance, hazards on the property, tenants and tenant mix, presence of safety devices such as fire and smoke alarms, lighting, sports facilities or swimming pools. Some insurers look at the presence of subsidized tenants as a factor in evaluating the property’s underwriting risk, and according to the proponents, some insurers have not offered certain products, or cancelled policies, because of the presence of subsidized tenants.
As a matter of public policy, insurers are prohibited from arbitrary and unreasonable discrimination against the protected classes of the Unruh Civil Rights Act. Those classes include age, ancestry, color, disability, genetic information, marital status, national origin, race, religion, sex, and sexual orientation.
The U.S. Supreme Court took a broad approach to housing discrimination in its recent decision in Texas Department of Housing and Community Affairs v. Inclusive Communities Project, holding that under the federal Fair Housing Act it is enough to show that minorities are negatively affected, even if no intent to discriminate has been found.
The housing choice voucher program (Section 8) is the federal government's major program for assisting very low-income families, the elderly, and the disabled to afford decent, safe, and sanitary housing in the private market. Since housing assistance is provided on behalf of the family or individual, participants are able to find their own housing, including single-family homes, townhouses and apartments. The participant is free to choose any housing that meets the requirements of the program and is not limited to units located in subsidized housing projects. A family that is issued a housing voucher is responsible for finding a suitable housing unit of the family's choice where the owner agrees to rent under the program. Rental units must meet minimum standards of health and safety and the housing subsidy is paid to the landlord directly by the public housing authority on behalf of the participating family. The family then pays the difference between the actual rent charged by the landlord and the amount subsidized by the program. The role of the landlord in the voucher program is to provide decent, safe, and sanitary housing to a tenant at a reasonable rent. The dwelling unit must pass the program's housing quality standards and be maintained up to those standards as long as the owner receives housing assistance payments. State and local government programs that proponents point to as similar in purpose are also included in the bill.
Proponents of this bill argue that some insurers have discriminated against property owners who participate in housing assistance programs, treating similarly situated properties differently, or refusing to offer or renew policies, simply because of the presence of tenants who have availed themselves of legitimate government benefits. They argue this serves as a disincentive for property owners to participate in these important affordable housing programs, particularly in high-cost California.
Nothing in the bill prevents an insurance company from properly underwriting the property for any and all risks, or from declining to insure a property for any number of reasons. The insurer would not, however, be able to simply not offer insurance to the category of properties that allow Section 8 tenants. This bill was prompted in part by one company that has refused to offer an apartment policy product to subsidized, public or government funded complexes, claiming these properties present unknown, complex, specialized or higher risk exposures. It further justified its position because the market is adequately covered by surplus lines, specialty and niche insurers, risk retention groups and other insurers that have particular expertise with subsidized, public or government funded housing. The insurer in that case had a standard apartment insurance policy and apparently did no on-site investigations or underwriting of a property prior to issuing a policy if information provided on the application met specified criteria. It should be noted that surplus lines insurers are not admitted or licensed to offer insurance in California, and this bill and the anti-discrimination provision generally, applies only to admitted insurers.
The fundamental question raised by this bill is whether an insurer
should be able to treat similarly situated properties differently
based simply on the presence of subsidized tenants. The insurer
would be able to use the underwriting process to determine if the
property actually posed an unacceptable risk, for example if the
building was not properly maintained, if it posed higher safety
concerns, or if it had a history of claims. None of these conditions
or problems would be unique to subsidized housing. At the same time,
some insurers claim that insurers may have particular expertise in
the types of properties they have chosen to insure. They believe
that any restrictions on their ability to evaluate the type of
property can eliminate flexibility, skew underwriting, and result in
market dislocations.
Support Housing California has sponsored AB 447 to ensure that a property owner would not be forced to discriminate against tenants based on the source of their income. The California Apartment Association (CAA) supports AB 447 because admitted insurers in California have ben refusing to cover properties that accept Housing Choice Vouchers, forcing CAA’s members to obtain significantly more expensive coverage from non-admitted insurers or terminate their participation in the Voucher program. The viability of the Housing Choice Voucher Program is entirely dependent on the availability of housing in the private market.
Opposition According to the American Insurance Association, AB 447 would force property insurers to provide coverage of rental properties without the ability to properly evaluate risk. Restrictions and limitations on underwriting adversely affect the ability of carriers to properly rate and make coverage determinations. Currently there is market availability of insurance for multi-family low-income or rent subsidized rental properties from admitted insurers, surplus lines carriers, specialty and niche carriers and risk retention groups. There is no need to force property insurers to provide insurance without the ability to consider all relevant factors that may affect the risks being insured.
The Association of California Insurance Companies opposes AB 447
because it prevents insurers from considering all relevant
information in the provision of coverage to owners of residential
rental property—in this case whether a building owner has chosen to
rent to tenants whose rents are subject to subsidies. Absent an
availability crisis, and with rates approved by the department of
Insurance, it seems inappropriate to place restrictions on a
company’s underwriting ability.
POSITIONS
Support
California Coalition for Rural Housing (sponsor)
Housing California (sponsor)
Western Center on Law and Poverty (sponsor)
California Apartment Association
California Housing Consortium
City of Berkeley Rent Stabilization Board
Community Housing Works
Downtown Women’s Center
First Place for Youth
Housing Leadership Council of San Mateo County
Law Foundation of Silicon Valley
LINC Housing
Northern Circle Indian Housing Authority
Path Ventures
Project Sentinel
Sacramento Homeless Organizing Committee
San Diego County Apartment Association
Skid Row Housing Trust
Oppose
American Insurance Association
Association of California Insurance Companies
-- END --
AB 447
Page 2
ASSEMBLY THIRD READING
AB 447
(Maienschein)
As Amended June 2, 2015
Majority vote
Committee |
Votes |
Ayes |
Noes |
Insurance |
11-1 |
Daly, Travis Allen, Calderon, Cooley, Cooper, Dababneh, Frazier, Gonzalez, Grove, Mayes, Rodriguez |
Gatto |
SUMMARY: Prohibits discrimination in the application for, issuance of, or pricing of insurance policies covering real property designed for human habitation. Specifically, this bill:
Prohibits an insurer from using any of the following characteristics as the basis for different treatment of otherwise comparable risks, for purposes of whether to accept an application for, issue a policy of, or cancel a policy of, insurance on property designed for human habitation.
The level or source of income of the individual or group of tenants residing or intending to reside upon the property; or
The receipt of assistance from either the federal or state government, or from a local public entity, as defined, including "Section 8" vouchers, by an individual or group of people residing or intending to reside upon the property.
Prohibits an insurer from using any of these characteristics as a condition or risk for which a higher rate, premium or charge may be imposed by the insurer for that insurance.
Prohibits an application for this insurance, or a report furnished by an insurer for use in determining insurability, to have any identification, or requirement to provide the identification, of these characteristics
Provides that, with respect to mixed use commercial/residential property, the restrictions, above, do not apply to commercial tenants.
EXISTING LAW:
Prohibits an insurer from using sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, or sexual orientation under conditions less favorable to the insured than in other comparable cases, for purposes of accepting applications for, issuing policies of, canceling policies of property or commercial insurance.
Prohibits using any of these characteristics as a condition or risk to justify charging a policyholder a higher rate, premium, or charge for the insurance.
FISCAL EFFECT: Unknown. This bill is keyed non-fiscal by the Legislative Counsel.
COMMENTS:
Purpose. According to the author, "[s]elect insurance providers are denying renewals of policies on a landlord having tenants who are receiving Section 8 vouchers. This practice is discriminatory... and should be remedied." This bill, as amended, prohibits using Section 8 status, and related characteristics associated with low-income housing, as a basis to decide whether to accept an application for insurance, issue or renew the policy, or price the policy.
Background. Unlike the highly regulated private passenger automobile market, there are relatively few limitations on insurer underwriting and pricing in the property insurance market. The traditional protected classes listed in the Unruh Civil Rights Act, for example, are prohibited bases of property insurance discrimination, but few other specific rules exist. Insurers use a myriad of characteristics associated with a property to evaluate the level of risk associated with insuring the property, including location, structural condition, age, design, height, management, ownership, maintenance, hazards to tenants and guests on the property, occupancy rate, rent, tenants and tenant mix, presence of safety devices such as fire and smoke alarms, lighting, sports facilities or swimming pools, among other risk factors. As an element of "tenant mix" some insurers look at the presence of subsidized tenants as one of the factors that contribute to an evaluation of the property's underwriting risk.
"Section 8". Under federal law, qualified low-income renters can obtain a voucher to assist in paying rent. For the landlord, a Section 8 renter provides a strong assurance that rent will be paid in a timely manner. There are state and local government programs that proponents point to as similar in purpose, and these programs have been included in this bill as well.
Fairness vs. underwriting flexibility. The fundamental question posed by this bill is whether it is fair to treat a property owner/landlord differently from a comparably situated property owner/landlord because the former chooses to rent to tenants who have availed themselves of legitimate government benefits. Proponents point to problems associated with rising rents in California's urban areas, and have lauded the landlords who have chosen to make the efforts to address some of the state's most vexing housing issues. Insurers respond that there are many companies in the property insurance market, and that ample options are available. Some companies specialize in small multi-unit buildings, some specialize in large complexes, others specialize in low-income properties, and each has expertise in the various types of properties it has chosen to insure. Restrictions on these companies' ability to evaluate the type of property that comes within its respective underwriting goals can eliminate flexibility, skew underwriting, and result in market dislocations.
Analysis Prepared by: Mark Rakich / INS. / (916) 319-2086 FN: 0000856
AB 447
Page 2
ASSEMBLY THIRD READING
AB 447
(Maienschein)
As Amended April 29, 2015
Majority vote
Committee |
Votes |
Ayes |
Noes |
Insurance |
11-1 |
Daly, Travis Allen, Calderon, Cooley, Cooper, Dababneh, Frazier, Gonzalez, Grove, Mayes, Rodriguez |
Gatto |
SUMMARY: Prohibits discrimination in the application for, issuance of, or pricing of insurance policies covering real property designed for human habitation. Specifically, this bill:
Prohibits an insurer from using any of the following characteristics as the basis for different treatment of otherwise comparable risks, for purposes of whether to accept an application for, issue a policy of, or cancel a policy of, insurance on property designed for human habitation:
The method that the property is financed;
The level or source of income of the individual or group of people residing or intending to reside upon the property; or
The receipt of assistance from either the federal or state government, or from a local public entity, as defined, including "Section 8" vouchers, by an individual or group of people residing or intending to reside upon the property.
Prohibits an insurer from using any of these characteristics as a condition or risk for which a higher rate, premium or charge may be imposed by the insurer for that insurance.
Prohibits an application for this insurance, or a report furnished by an insurer for use in determining insurability, to have any identification, or requirement to provide the identification, of these characteristics.
EXISTING LAW:
Prohibits an insurer from using sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, or sexual orientation under conditions less favorable to the insured than in other comparable cases, for purposes of accepting applications for, issuing policies of, canceling policies of property or commercial insurance.
Prohibits using any of these characteristics as a condition or risk to justify charging a policyholder a higher rate, premium, or charge for the insurance.
FISCAL EFFECT: Unknown. This bill is keyed non-fiscal by the Legislative Counsel.
COMMENTS:
Purpose. According to the author, "[s]elect insurance providers are denying renewals of policies on a landlord having tenants who are receiving Section 8 vouchers. This practice is discriminatory... and should be remedied." This bill, as amended, prohibits using Section 8 status, and related characteristics associated with low-income housing, as a basis to decide whether to accept an application for insurance, issue or renew the policy, or price the policy.
Background. Unlike the highly regulated private passenger automobile market, there are relatively few limitations on insurer underwriting and pricing in the property insurance market. The traditional protected classes listed in the Unruh Civil Rights Act, for example, are prohibited bases of property insurance discrimination, but few other specific rules exist. Insurers use a myriad of characteristics associated with a property to evaluate the level of risk associated with insuring the property, including location, structural condition, age, design, height, management, ownership, maintenance, hazards to tenants and guests on the property, occupancy rate, rent, tenants and tenant mix, presence of safety devices such as fire and smoke alarms, lighting, sports facilities or swimming pools, among other risk factors. As an element of "tenant mix" some insurers look at the presence of subsidized tenants as one of the factors that contribute to an evaluation of the property's underwriting risk.
"Section 8." Under federal law, qualified low-income renters can obtain a voucher to assist in paying rent. For the landlord, a Section 8 renter provides a strong assurance that rent will be paid in a timely manner. There are state and local government programs that proponents point to as similar in purpose, and these programs have been included in this bill as well.
Subsidized financing. There are programs that provide subsidized financing for multi-unit residential property, conditioned on the owner/borrower renting the units to qualified tenants as below-market rent. Because these programs serve the same purpose as Section 8 vouchers, and the landlord-tenant relationship is similar to the Section 8 relationship, this bill includes this characteristic of a residential property in the list of characteristics that insurers cannot use as a basis to distinguish among otherwise comparable risks.
Fairness vs. underwriting flexibility. The fundamental question posed by this bill is whether it is fair to treat a property owner/landlord differently from a comparably situated property owner/landlord because the former chooses to rent to tenants who have availed themselves of legitimate government benefits. Proponents point to problems associated with rising rents in California's urban areas, and have lauded the landlords who have chosen to make the efforts to address some of the state's most vexing housing issues. Insurers respond that there are many companies in the property insurance market, and that ample options are available. Some companies specialize in small multi-unit buildings, some specialize in large complexes, others specialize in low-income properties, and each has expertise in the various types of properties it has chosen to insure. Restrictions on these companies' ability to evaluate the type of property that comes within its respective underwriting goals can eliminate flexibility, skew underwriting, and result in market dislocations.
Analysis Prepared by: Mark Rakich / INS. / (916) 319-2086 FN: 0000359
AB 447
Page 3
Date of Hearing: May 6, 2015
ASSEMBLY COMMITTEE ON INSURANCE
Tom Daly, Chair
AB 447 (
Maienschein) – As Amended April 29, 2015
SUBJECT: Property insurance: discrimination
SUMMARY: Prohibits discrimination in the application for, issuance of, or pricing of insurance policies covering real property designed for human habitation. Specifically, this bill:
Prohibits an insurer from using any of the following characteristics as the basis for different treatment of otherwise comparable risks, for purposes of whether to accept an application for, issue a policy of, or cancel a policy of, insurance on property designed for human habitation:
The method that the property is financed;
The level or source of income of the individual or group of people residing or intending to reside upon the property; or
The receipt of assistance from either the federal or state government, or from a local public entity, as defined, including "Section 8" vouchers, by an individual or group of people residing or intending to reside upon the property.
Prohibits an insurer from using any of these characteristics as a condition or risk for which a higher rate, premium or charge may be imposed by the insurer for that insurance.
Prohibits an application for this insurance, or a report furnished by an insurer for use in determining insurability, to have any identification, or requirement to provide the identification, of these characteristics.
EXISTING LAW:
Prohibits an insurer from using sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, or sexual orientation under conditions less favorable to the insured than in other comparable cases, for purposes of accepting applications for, issuing policies of, canceling policies of property or commercial insurance.
Prohibits using any of these characteristics as a condition or risk to justify charging a policyholder a higher rate, premium, or charge for the insurance.
FISCAL EFFECT: Undetermined
COMMENTS:
Purpose. According to the author, "[s]elect insurance providers are denying renewals of policies on a landlord having tenants who are receiving Section 8 vouchers. This practice is discriminatory . . . and should be remedied." The bill, as amended, prohibits using Section 8 status, and related characteristics associated with low-income housing, as a basis to decide whether to accept an application for insurance, issue or renew the policy, or price the policy.
Background. Unlike the highly regulated private passenger automobile market, there are relatively few limitations on insurer underwriting and pricing in the property insurance market. The traditional protected classes listed in the Unruh Civil Rights Act, for example, are prohibited bases of property insurance discrimination, but few other specific rules exist. Insurers use a myriad of characteristics associated with a property to evaluate the level of risk associated with insuring the property, including location, structural condition, age, design, height, management, ownership, maintenance, hazards to tenants and guests on the property, occupancy rate, rent, tenants and tenant mix, presence of safety devices such as fire and smoke alarms, lighting, sports facilities or swimming pools, among other risk factors. As an element of "tenant mix" some insurers look at the presence of subsidized tenants as one of the factors that contribute to an evaluation of the property's underwriting risk.
"Section 8". Under federal law, qualified low-income renters can obtain a voucher to assist in paying rent. For the landlord, a Section 8 renter provides a strong assurance that rent will be paid in a timely manner. There are state and local government programs that proponents point to as similar in purpose, and these programs have been included in the bill as well.
Subsidized financing. There are programs that provide subsidized financing for multi-unit residential property, conditioned on the owner/borrower renting the units to qualified tenants as below-market rent. Because these programs serve the same purpose as Section 8 vouchers, and the landlord-tenant relationship is similar to the Section 8 relationship, the bill includes this characteristic of a residential property in the list of characteristics that insurers cannot use as a basis to distinguish among otherwise comparable risks.
Fairness vs. underwriting flexibility. The fundamental question posed by the bill is whether it is fair to treat a property owner/landlord differently from a comparably situated property owner/landlord because the former chooses to rent to tenants who have availed themselves of legitimate government benefits. Proponents point to problems associated with rising rents in California's urban areas, and have lauded the landlords who have chosen to make the efforts to address some of the state's most vexing housing issues. Insurers respond that there are many companies in the property insurance market, and that ample options are available. Some companies specialize in small multi-unit buildings, some specialize in large complexes, others specialize in low-income properties, and each has expertise in the various types of properties it has chosen to insure. Restrictions on these companies' ability to evaluate the type of property that comes within its respective underwriting goals can eliminate flexibility, skew underwriting, and result in market dislocations.
REGISTERED SUPPORT / OPPOSITION:
Support
Housing California (Co-sponsor)
California Coalition for Rural Housing (Co-sponsor)
Western Center on Law and Poverty (Co-sponsor)
California Apartment Association
Community Housing Works (CHW)
Corporation for Supportive Housing (CSH)
Downtown Women's Center (DWC)
First Place for Youth
Housing Leadership Council of San Mateo County
LINC Housing
Mutual Housing California Project Sentinel
Northern Circle Indian Housing Authority
PATH (People Assisting the Homeless)
PATH Ventures
Rural Community Assistance Corporation (RCAC)
Sacramento Homeless Organizing Committee
SKID ROW HOUSING TRUST
Opposition
ACIC
American Insurance Association
National Association of Mutual Insurance Companies
Pacific Association of Domestic Insurance Companies
Personal Insurance Federation of California
Analysis Prepared by: Mark Rakich / INS. / (916) 319-2086
Bill Author
Bill Co-Author(s):
