Senate Standing Committee on Insurance

Thank you, Madam Chair. We haven't started any of this right now. Good afternoon. The Senate continues to want to call the Senate to order. Do we have enough to call quorum? The Senate continues to welcome the public in person and via the teleconference service. For individual wishing to provide public comment, today's participant number is 877-226-8216. That's 877-226-8216, and the access code is 6217161 6217161. Please note, we will be hearing from witnesses in support and opposition before taking public comment. We are holding our committee hearings here in the O Street building. I ask all members of the committee to be present in Room 2100 so we can do we have enough to establish a quorum? We also have four bills on calendar. Two of those bills are on consent. Before we hear presentation on the bill, let's establish a quorum. Madam assistant, please call the role.

Rubio. Present. Rubio. Present. Nguyen. Here. Alvarado-Gil. Here. Dodd. Here. Jones. Here. Niello. Here. Portrantino.

The quorum has been established. Before we begin with the bills, we want to adopt the Committee rules. Senators, you all have received a copy. Is there any objection? See? None. The committee rules are adopted. We have four bills on consent, four bills on calendar. Two of those are on consent. Does anybody, any member, wish to pull a bill off of the consent calendar? Seeing no objection? The following bills are on consent SB 528 and SB 743. Can I get a motion for consent? Move. By Dodd. By Senator Dodd. The motion is to call roll on the consent calendar. Okay. Please call roll on consent.

Senators Rubio? Yes. Nguyen. Yes. Alvarado-Gil? Yes. Dodd? Aye. Jones. Aye. Niello. Aye. Portantino?

We'll leave the row open for other members at this time. I see our first author, Senator Glazer. Would you like to present your bill? SB 793.

It's nice to see you all. It's been such a long time. Nice to see you. Vice Chair, chair Rubio and guests and former consultants. Nice to be here. I'm here to present SB 793, and I thank your staff for their work on this bill. Existing law requires insurers to post their Privacy Policy online. They also have to provide a written copy of this policy upon a request to consumers, and they have to send out a full length paper copy annually. This bill would allow California personal insurers to not send a full length paper copy if the Privacy Policy is not changed from the previous year. They do not share policyholder information for marketing purposes, and they send an abbreviated notice to consumers of their rights each year. In 2015, the federal government passed legislation to eliminate the requirement on insurers to send out paper copy of privacy notices annually if they meet the first two criteria that I talked about. Since then, 47 other states have updated their legislation or regulation to adopt this change. This bill will allow California insurers to do the same, while also giving consumers a shorter notice each year to remind them of key rights. That's the presentation of the bill. And I respectfully ask for your support at the appropriate time. With me to testify in support is Allison Adey, who's a legislative advocate for the Personal Insurance Federation of California.

Good afternoon, Madam Chair and members of the committee. My name is Alison Adey. On behalf of the Personal Insurance Federation of California, we are very happy to be here supporting SB 793 today. This bill pulls from a 2015 amendment to the Fixing America Surface Transportation Act, better known as the Fast Act, made it possible for institutions subject to the Gramm-Leach-Bliley Act to only send out their privacy notices when there's been a change in the policy. This bill puts a California spin on it and ensures that there is consumer protection and notice that goes out annually in an abbreviated form. We are very excited to see this move forward and urge your support. Thank you.

Thank you. We will now move on to any lead witnesses in opposition, or do we have more support? Actually, yeah, here's. Supports, please.

Good afternoon. Shari McHugh, representing the Pacific Association of Domestic Insurance Companies in support of the bill. Thank you.

Matt Powers with the Association of California Life and Health Insurance Companies. Also in support.

Mark Sektnan with the American Property Casualty Insurance Association. Support of the bill.

Any other support in the room? Seeing no more. Now, we will move on to the lead witness in opposition. Seeing no lead opposition. Any witnesses who wants to oppose? Okay, we'll move now on to testifying via the teleconference call. Moderator, would you please prompt the individuals waiting to testify in support or opposition of SB 793?

Thank you. To provide comments in support or opposition, please press one, then zero. And that's for SB 793. We have no comments in the queue at this time. Thank you, moderator. We'll now move back to members for discussion. There's a motion by Chair Rubio and Senator Glazer. Would you like to please close?

Well, thank you for the consideration. This resolves some working out issues that took on a little bit longer than I think we would have hoped over the last couple of years, but appreciate the engagement from the Department of Insurance and certainly from the industry as we've worked this matter out. I want to thank Deanna from my staff, who has led that effort, and with that respectfully ask for an eye vote.

Madam Assistant, please call for the Role file.

Item one SB 793. Senators Rubio. Aye. Nguyen aye. Alvarado-Gil. Aye. Dodd. Aye. Jones. Yes. Niello? Aye. Portantino.

You need to make Jones redo his votes. What's a yes?

I don't know.

So the votes rate count right now is 6-0, but we're going to put it on call for other members. Thank you, Senator.

I hope that I can I'm no longer on this committee after seven years. But it's nice to come back and see you all.

See you all and we made it very difficult for you today. And at this time we will be hearing from Chair Rubio's bill on SB 50 five.

Well, as best as my voice will allow, so please forgive me. Thank you, Vice Chair. SB 505 is an important bill that will make insurance coverage more affordable for consumers and businesses. SB 505 will expand the Fair Plan's existing Clear and House program to include commercial insurance policyholders which will encourage more policies to shift back over to the admin commercial market. In 1968, California created the fair access to insurance requirements. The Fair Plan to encourage basic home insurance coverage and ensured that it was available to individuals who could not get a policy in the private voluntary market. Currently, California only allows residential property insurance policies in the Fair Plan to review online by the admitted market insurance companies. SB 505 will remedy this situation by creating a structure to allow commercial properties, such as farms that are currently insured under the Fair Plan, to be reviewed online by the admitted market insurance companies. This will help ease the confusion and cost for the insurers. This bill is supported by many sponsors of the bill, including the California Farm Bureau Federation and Insurance Commissioner Ricardo Lada. And this bill has no opposition here with me in support or the California Farm Bureau of Federation who are the co sponsors, and on behalf of Commissioner Ricardolada CDI to testify in support, please.

Good afternoon, Chair Rubio and members. My name is Peter Ansel. I'm a policy advocate for the California Farm Bureau. We represent over 28,000 farmers across 20,000 farms in the state. Typically, California farmers face one insurance policy when they go get insured. And that's because residential insurance policies for the farmhouse are often on the same parcel as where the commercial policies for the farming business. But as those policies move into the Fair Plan, they're often broken up into multiple insurance policies. And as conditions improve in a community and those residential policies have an opportunity to participate in the clearinghouse inside the Fair Plan and make their way back to the admitted market, right now, those commercial policies for farmers are still inside the Fare plan. SB 505 takes a simple approach just include those commercial policies in the existing operation of the clearinghouse. Doesn't make any other changes. But this would be a significant improvement to the current conditions for Farm bureau members that are inside the Fair plan. Because if they can get back to a single consolidated policy in the admitted market it'll mean that they'll spend more time producing fresh fruit, nuts and vegetables for Californias and for the nation and less time spending trying to figure out how to be managers of their insurance policies. We appreciate the support from California Department of Insurance. The Fair Plan has been great to work with so far. The other supporters on the bill, and the bill has no opposition. And I appreciate all the help from Senator Rubio making insurance affordable to California consumers and to our farmers. Thank you.

Thanks.

Good afternoon. Michael Martinez, Chief Deputy here on behalf of Insurance Commissioner Ricardo Lara, proud co-sponsor of this measure, and in partnership with the Chair, Chair Rubio, want to thank her for her leadership in authoring this measure. And we do support this measure. Working with partnering with the Farm Bureau and the Fair Plan in implementing. We've had a very successful, we believe, homeowners clearinghouse that has been implemented under existing law weekend we've been partnering it to have that be success. And we feel and believe this bill will help on the commercial side create a successful program to get Fair Plan policies back into the midden market, which is our number one priority. This is one of several strategies that the Commissioner Lara is moving forward to continue to work in having the admitted market write more in the.... Thank you very much for your consideration.

Thank you. Now, let's hear from any other support witnesses. Please state your name, organization and support.

Good afternoon. Armand Feliciano, on behalf of the Fair Plan in support of bill.

Good afternoon, Madam Chair. Members. John Norwood on behalf of the Independent Insurance Agents and Brokers of California.

Thank you. Mark Sektnan with American Property Casualty Insurance Association. Support of the bill.

Thank you. Now we'll move to any lead witnesses in opposition seeing none. Any individual who wants to come up and oppose well, now we'll move to moderator, would you please prompt and see if any individuals would like to testify in support or opposition of SB 505?

Yes, and to provide comments in support or opposition, please press one, then Zero or SB 505. And we have no comments in queue at this time.

Thank you. We'll now bring it back to discussion with members. Comments, questions?

I'm wondering if one of the two witnesses could kind of take me through. First of all, I support the bill. I think this is fantastic that we're advancing the ball to try to get people back in the admitted market. I've read this thing and listened to testimony. I don't get how it works. You're just posting anybody. There you go.

Senator Dodd. Good question. Obviously, the very basic of it, about two years ago, the Fair Plan was looking for a way to depopulate their enrollment, right? And part of that process is if somebody, like any insurance carrier, wanted to reach out to the Fair Plan, working with the brokers and take on that risk, then they can do that. They can go actually come work with the broker and access that policy and see if they want to go back to the private market.

So the whole idea is that the Fair Plan should be the insurance of last resort. And this just gives a possibility that all the information is out there so people in the commercial market, private, can look at and compete for their business.

Correct.

Sounds good.

All right.

Thank you. Madam Chair, I move the bill.

No other questions or comments. There's a motion.

Senator Rubio, I want to thank you so much for all your hard work that you've been doing as our chair of the Insurance Committee and in working with Commissioner Lotto's office to ensure that the Fair plan, the California Fair plan, continues to evolve and meet the needs of California, particularly with this bill. Looking at our farming industry and our AG land, I think that this is a step in the right direction. And I look forward to seeing more bills in collaboration with the insurance industry to ensure that our consumers are further protected. Thank you.

Thank you, Senator. Madam Chair, would you like to close?

Just want to say thank you. Everyone that testified here to the members, I respectfully ask for your eye vote. Thank you.

Thank you. There's a motion. Madam Assistant, please call for the Roll file.

Item two, SB 505. The motion is due passed to the Committee on Appropriations. Rubio. Aye. Nguyen. Aye. Alvarado-Gil. Aye. Dodd. Aye. Jones Nelo aye. Portantino?

There's 6-0. We'll put the bill on call for the other member to come by again. We're going to now open the open for the row. Can you Madam Assistant, let's start with the consent calendar?

Senator Portantino.

The consent bill is out. And let's go ahead. I don't have my oh. We'll now go on to file item one, SB 793. SB seven nine three. The motion is do pass to the Committee on Judiciary. Senator Portantino.

That bill received 7-0 bills out. Next is item file item two, SB 505. The motion is do pass to the Committee on Appropriations. Senator Portantino. The bill received 7-0 vote the bill's out. We are done and finished with the Senate Insurance Committee hearing. Thank you. Thank you so much.