Existing law requires an insurer, after a covered loss under a fire insurance policy, to provide the insured with a free copy of his or her policy within 30 calendar days of receiving a request from the insured, but allows the Insurance Commissioner to extend this period. Existing law also provides that an insured who does not experience a covered loss shall, upon request, be entitled to one free copy of his or her policy annually.

This bill would specify that the copy of the policy provided shall be a complete copy of the policy in effect at the time of the loss and shall include the full policy, any endorsements to the policy, and the policy declarations page. The bill would authorize an insurer that is not compliant with specified electronic document transmission requirements to provide a copy of the entire policy in electronic form if the covered loss is the result of a state of emergency and the electronic copy is requested by an insured who has not elected to receive electronic documents. The bill would require an insurer that is compliant with those requirements to provide an electronic copy of the entire policy if the same criteria are met. The bill would provide that request by an insured under these circumstances is not a request to receive future electronic communications.

Existing law requires an insurer, after a covered loss under a fire insurance policy, to provide the insured with a free copy of his or her policy within 30 calendar days of receiving a request from the insured, but allows the Insurance Commissioner to extend this period. Existing law also provides that an insured who does not experience a covered loss shall, upon request, be entitled to one free copy of his or her policy annually.

This bill would specify that the copy of the policy provided shall be a complete copy of the policy in effect at the time of the loss and shall include the full policy, any endorsements to the policy, and the policy declarations page. The bill would authorize an insurer that is not compliant with specified electronic document transmission requirements to provide a copy of the entire policy in electronic form if the covered loss is the result of a state of emergency and the electronic copy is requested by an insured who has not elected to receive electronic documents. The bill would require an insurer that is compliant with those requirements to provide an electronic copy of the entire policy if the same criteria are met. The bill would provide that request by an insured under these circumstances is not a request to receive future electronic communications.

Existing law requires an insurer, after a covered loss under a fire insurance policy, to provide the insured with a free copy of his or her policy within 30 calendar days of receiving a request from the insured, but allows the Insurance Commissioner to extend this period. Existing law also provides that an insured who does not experience a covered loss shall, upon request, be entitled to one free copy of his or her policy annually.

This bill would specify that the copy of the policy provided shall be a complete copy of the policy in effect at the time of the loss and shall include the full policy, any endorsements to the policy, and the policy declarations page, and page. The bill would authorize the an insurer that is not compliant with specified electronic document transmission requirements to provide these documents a copy of the entire policy in electronic form if agreed to the covered loss is the result of a state of emergency and the electronic copy is requested by the insured. The bill would also require that the copy of the policy provided after a covered loss to be a certified copy. an insured who has not elected to receive electronic documents. The bill would require an insurer that is compliant with those requirements to provide an electronic copy of the entire policy if the same criteria are met. The bill would provide that request by an insured under these circumstances is not a request to receive future electronic communications.

Existing law requires an insurer, after a covered loss under a fire insurance policy, to provide the insured with a free copy of his or her policy within 30 calendar days of receiving a request from the insured, but allows the Insurance Commissioner to extend this period. Existing law also provides that an insured who does not experience a covered loss shall, upon request, be entitled to one free copy of his or her policy annually.

This bill would specify that the copy of the policy provided shall include the full policy, any endorsements to the policy, and the policy declarations page, and would authorize the insurer to provide these documents in electronic form if agreed to by the insured. The bill would also require that the copy of the policy provided after a covered loss to be a certified copy.

 CONSENT  

Bill No: AB 1799

Author:

:

Vote:

SENATE INSURANCE COMMITTEE: 11-0, 6/13/18

AYES: Glazer, Gaines, Galgiani, Hernandez, Hueso, Lara, Mitchell, Moorlach, Morrell, Portantino, Roth

NO VOTE RECORDED: Berryhill, Newman

ASSEMBLY FLOOR: 74-0, 4/26/18 (Consent) - See last page for vote

SUBJECT:

SOURCE: Author

DIGEST:

This bill requires the complete copy of a residential insurance policy provided to an insured after a loss to include the full insurance policy, any endorsements to the policy, and the policy declarations page; and provides that if the request for a copy of the policy is a result of a loss in a state of emergency, the insurer may, upon the request of the insured, provide an electronic copy of the entire policy, as specified.

ANALYSIS:

Existing law:

1. Requires an insurer, after a covered loss, to provide to the insured free of charge a complete, current copy of the insured’s residential insurance policy within 30 days of receipt of a request.
2. Provides that an insured who has not experienced a covered loss is entitled to one free copy of his or her policy annually.
3. Establishes requirements that an insurer must comply with in order for policyholders who choose to opt in to conduct transactions and receive documents electronically.

This bill:

1. Requires the complete copy of a residential insurance policy provided to an insured after a loss to include the full insurance policy, any endorsements to the policy, and the policy declarations page.
2. Provides that if the request for a copy of the policy is a result of a loss in a state of emergency, the insurer may, upon the request of the insured, provide an electronic copy of the entire policy, as specified.
3. Provides that a request by an insured for an electronic copy of the policy does not constitute a request to participate in electronic communications or transactions for any other purpose.

Background

According to the California Department of Insurance (CDI), while current law seems clear, it has found in the course of assisting consumers in the aftermath of the wildfires that have occurred in the past few years that some insurers do not fully comply with the law. CDI indicates that some insurers only provide the declarations page, which is simply a summary of coverages and not policy language, or they provide the basic policy, but not endorsements, which are addendums containing important policy language.

After a disaster, such as the firestorms that ravaged California last year, many policyholders do not have a copy of their policy because it was destroyed in the fire. In addition, many of these policyholders struggle to establish stable living arrangements in the period shortly after the fire, and maintaining a reliable mail address can be difficult. As a result, obtaining critical coverage information from their fire insurance policy can be difficult unless they can receive the documents via email.

Until recently, and unlike other financial services, it was not lawful for an insurer to offer policyholders the opportunity to conduct all or most of their transactions electronically. However, over the past few years, the law has incrementally developed to the point where most transactions and communications between an insurer and a policyholder can be conducted electronically, provided both parties agree to opt in, and provided that several statutory requirements are met.

This bill provides a narrow, specific exception to the electronic transactions law so that a policyholder can request an email copy of their policy, and an insurer can provide the email copy, irrespective of either party’s status with respect to the electronic transactions law.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT: (Verified 6/13/18)

California Association of Realtors

California Department of Insurance

California Medical Association

Napa County Board of Supervisors

Sonoma County Board of Supervisors

OPPOSITION: (Verified 6/13/18)

None received

ARGUMENTS IN SUPPORT: According to the Napa County Board of Supervisors, after the North Bay fires insurers, although required to provide consumers with a complete and current copy of their policy within 30 days of request, were only providing the declarations page of the policy documents. By requiring insurers to provide complete information, policyholders will better be able to begin the process of recovery. The California Medical Association supports AB 1799 because without a full set of policy documents consumers do not know exactly what is covered under their insurance plan. Additionally, the law does not address whether or not an insurer may provide an electronic copy of policy documents to the consumer.

ASSEMBLY FLOOR: 74-0, 4/26/18

AYES: Acosta, Aguiar-Curry, Arambula, Baker, Berman, Bigelow, Bloom, Bonta, Brough, Burke, Caballero, Calderon, Carrillo, Cervantes, Chau, Chávez, Chen, Chiu, Choi, Chu, Cooley, Cooper, Cunningham, Dahle, Daly, Eggman, Flora, Frazier, Friedman, Gallagher, Eduardo Garcia, Gipson, Gloria, Gonzalez Fletcher, Gray, Grayson, Harper, Holden, Irwin, Jones-Sawyer, Kalra, Kamlager-Dove, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Muratsuchi, Nazarian, Obernolte, O'Donnell, Patterson, Quirk, Quirk-Silva, Reyes, Rubio, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Voepel, Waldron, Weber, Wood, Rendon

NO VOTE RECORDED: Travis Allen, Fong, Cristina Garcia, Rodriguez

Prepared by:

6/15/18 10:26:47

**** END ****

SENATE COMMITTEE ON

Senator Steven Glazer, Chair

2017 - 2018 Regular

Bill No: Hearing Date: June 13, 2018

Subject:

SUMMARY

Requires the complete copy of a residential insurance policy provided to an insured after a loss to include the full insurance policy, any endorsements to the policy, and the policy declarations page; and provides that if the request for a copy of the policy is a result of a loss in a state of emergency, the insurer may, upon the request of the insured, provide an electronic copy of the entire policy, as specified.

DIGEST

Existing law

1. Requires an insurer, after a covered loss, to provide to the insured free of charge a complete, current copy of the insured’s residential insurance policy within 30 days of receipt of a request.
2. Provides that an insured who has not experienced a covered loss is entitled to one free copy of his or her policy annually.
3. Establishes requirements that an insurer must comply with in order for policyholders who choose to opt in to conduct transactions and receive documents electronically.
   

This bill

1. Requires the complete copy of a residential insurance policy provided to an insured after a loss to include the full insurance policy, any endorsements to the policy, and the policy declarations page.
2. Provides that if the request for a copy of the policy is a result of a loss in a state of emergency, the insurer may, upon the request of the insured, provide an electronic copy of the entire policy, as specified.
3. Provides that a request by an insured for an electronic copy of the policy does not constitute a request to participate in electronic communications or transactions for any other purpose.
   

COMMENTS

1. Purpose of the bill To clarify that insureds are entitled to a copy of the entire policy, not just the declarations page, after a loss, and allow the insured to request an electronic copy even if they have not opted in to electronic transactions or communications with the insurer.
   
   
2. Background According to the California Department of Insurance (CDI), while current law seems clear, it has found in the course of assisting consumers in the aftermath of the wildfires that have occurred in the past few years that some insurers do not fully comply with the law. CDI indicates that some insurers only provide the declarations page, which is simply a summary of coverages and not policy language, or they provide the basic policy, but not endorsements, which are addendums containing important policy language.

After a disaster, such as the firestorms that ravaged California last year, many policyholders do not have a copy of their policy because it was destroyed in the fire. In addition, many of these policyholders struggle to establish stable living arrangements in the period shortly after the fire, and maintaining a reliable mail address can be difficult. As a result, obtaining critical coverage information from their fire insurance policy can be difficult unless they can receive the documents via email.

Until recently, and unlike other financial services, it was not lawful for an insurer to offer policyholders the opportunity to conduct all or most of their transactions electronically. However, over the past few years, the law has incrementally developed to the point where most transactions and communications between an insurer and a policyholder can be conducted electronically, provided both parties agree to opt in, and provided that several statutory requirements are met.

The bill provides a narrow, specific exception to the electronic transactions law so that a policyholder can request an email copy of their policy, and an insurer can provide the email copy, irrespective of either party’s status with respect to the electronic transactions law.

1. Support According to the Napa County Board of Supervisors, after the North Bay fires insurers, although required to provide consumers with a complete and current copy of their policy within 30 days of request, were only providing the declarations page of the policy documents. By requiring insurers to provide complete information, policyholders will better be able to begin the process of recovery. The California Medical Association supports AB 1799 because without a full set of policy documents consumers do not know exactly what is covered under their insurance plan. Additionally, the law does not address whether or not an insurer may provide an electronic copy of policy documents to the consumer.
2. Opposition None received
   
3. Prior and Related Legislation

SB 824 (Lara) Prohibits an insurer from canceling or refusing to renew a homeowners’ insurance policy for one year from the date of a declaration of a state of emergency; and directs the CDI to conduct a data call on wild fire and fire loss experience from insurers writing homeowners’ insurance.

SB 894 (Dodd) after a total loss of a home in a declared disaster area, requires an insurer to renew a residential insurance policy for at least two annual renewal periods or 24 months, whichever is greater, requires an insurer to grant an additional 12-month extension for a total of 36 months for additional living expense if an insured acting in good faith and with reasonable due diligence encounters a delay, subject to policy limits, allows an insured to combine payments for actual losses up to the policy limits for the primary dwelling, other structures and contents, limited to the amount necessary to rebuild or replace the home if the policy limits for the dwelling are insufficient, specifies that the payments for losses under this provision shall be full replacement value without requiring the replacement of the other structures or contents.

SB 917 (Jackson) Provides that if loss or damage results from a combination of perils, one of which is a landslide, coverage shall be provided if an insured peril is the efficient proximate cause of the loss or damage.

AB 1722 (Aguiar-Curry) Extends the minimum time to rebuild or replace after a declared disaster from 24 to 36 months.

AB 1797 (Levine) Requires insurers to provide an biennial estimate of replacement costs to the insured at the time of policy renewal.

AB 1800 (Levine) Prohibits, in the event of a total loss, a residential property insurance policy from containing a provision that limits or denies payment of building code upgrade cost or replacement cost, including extended replacement cost, to the extent those costs are otherwise covered under the policy, based on the fact the insured has chosen to rebuild or purchase a home at a new location.

AB 1875 (Wood) Requires CDI to create an insurance finder tool, and requires an insurer to refer a customer to an alternate source of insurance when the insurer declines to offer extended replacement coverage.

AB 2229 (Wood) Requires the Residential Property Insurance Disclosure form to include information regarding any fire safety discounts offered by the insurer.

AB 2594 (Friedman) Revises the standard form policy and extends the period in which to bring suit from 12 to 24 months after inception of the loss if the loss was related to a state of emergency.

POSITIONS

Support

California Association of Realtors

California Department of Insurance

California Medical Association

Napa County Board of Supervisors

Sonoma County Board of Supervisors

Oppose

None received

-- END --

Date of Hearing: April 18, 2018

ASSEMBLY COMMITTEE ON INSURANCE

Tom Daly, Chair

ABPCA Bill Id:AB 1799 (

Author:Levine) – As Amended Ver:April 12, 2018

SUBJECT: Insurance: policy documents

SUMMARY: Requires insurers to provide a free copy of a fire insurance policy, including endorsements and the declarations page, within 30 days of a request by a policyholder. Specifically, this bill:

1. Requires, upon a request by a policyholder after a covered loss, an insurer to provide a complete copy of the policy that was in effect at the time of the loss, including any endorsements and the declarations page, within 30 days.
2. Provides that, in the case of a declared state of emergency, a policyholder may request the complete policy documents to be provided via email, even if the policyholder has not opted in to electronic transactions pursuant to statutory requirements.
3. Provides that any insurer may provide the requested email copy of the documents, and that an insurer that is compliant with the statutory electronic transaction requirements shall provide the requested copy by email.
4. States that a request for an emailed copy of the policy does not constitute a request to opt in for electronic transactions generally.

EXISTING LAW:

1. Requires insurers to provide fire insurance policies to policyholders, if requested by the policyholder after a loss, within 30 days.
2. Establishes requirements that an insurer must comply with in order for policyholders who choose to opt in to conduct transactions and receive documents electronically.
3. Establishes a sunset date of January 1, 2021 for the electronic transactions authorization statute.

FISCAL EFFECT: Undetermined, although Legislative Counsel has designated the bill as non-fiscal.

COMMENTS:

1. Purpose. AB 1799 is intended to clarify existing law with respect to a policyholder’s right to receive a copy of the fire insurance policy after a loss. According to the Department of Insurance (DOI), while current law seems clear, it has found in the course of assisting consumers in the aftermath of the wildfires that have occurred in the past few years that some insurers do not fully comply with the law. DOI indicates that some insurers merely provide the declarations page, which is simply a summary of coverages and not policy language, or they provide the basic policy, but not endorsements, which are addendums containing crucial policy language.
2. Electronic copy. Until recently, and unlike other financial services, it was not lawful for an insurer to offer policyholders the opportunity to conduct all or most of their transactions electronically. However, over the past four or five years, the law has incrementally developed to the point where most transactions and communications between an insurer and a policyholder can be conducted electronically, provided both parties agree to opt in, and provided that several statutory requirements are met.
   
   After a disaster, such as the horrific firestorms that ravaged California last year, many policyholder do not have a copy of their policy, because it was destroyed in the fire. In addition, many of these policyholders struggle to establish stable living arrangements in the period shortly after the fire, and maintaining a reliable mail address can be difficult. As a result, obtaining critical coverage information from their fire insurance policy can be difficult unless they can receive the documents via email.
   
   This raises two related problems. First, the policyholder may not have opted in to electronic transactions, and may not in general want to. Second, a number of insurers have not chosen, for various reasons including the upcoming sunset date, made the infrastructural investment to be able to comply with the requirements of the electronic transactions law.
   
   The bill addresses this problem by providing a narrow, specific exception to the electronic transactions law so that a policyholder can request an email copy, and an insurer can provide the email copy, irrespective of either party’s status with respect to the electronic transactions law.

REGISTERED SUPPORT / OPPOSITION:

Support

California Medical Association

Department of Insurance

Mendocino County Board of Supervisors

Napa County Board of Supervisors

Sonoma County Board of Supervisors

United Policyholders

Opposition

None received

Analysis Prepared by: Mark Rakich / INS. / (916) 319-2086