We previously reported on AB 999. This bill revises the premium rate development process for long-term care insurance in order to address the dissatisfaction of policyholders with rate increases on in-force coverage. The new legislation will (i) increase policyholders awareness of the possibility of rate increases, while slowing the frequency and severity of those increases; (ii) prevent insurers from increasing rates in the absence of adverse experience; (iii) require insurers to spread claims experience costs across three categories of coverage within all affiliated companies, foreclosing the ability of insurers to segment blocks and treat them separately; (iv) and it limits the ability of insurers to use poor investment experience to justify a rate increase. The bill was passed after removal of the most controversial provision, which would have placed time limits on when an insurer could seek a rate change.
As previously reported SB 1448 incorporates into California law changes the NAIC made to its Insurance Holding Company System Model Law and Regulations. These changes, prompted by the 2008 financial crisis, provide insurance company regulators with greater regulatory oversight for insurance holding company systems that may include non-insurers and insurers licensed in other jurisdictions. Please refer to our article on the model act for a comprehensive analysis of these changes.
AB 1846 establishes a regulatory licensing framework for Consumer Owned and Operated Plans (CO-OPs) as contemplated in the Patient Protection and Affordable Care Act (PPACA). CO-OPs are designed to foster the creation of consumer-driven individual and small group market health insurers, particularly for the state health care exchanges mandated by PPACA.
SB 1216 aligns California law relating to the regulatory oversight of reinsurers and reinsurance with the current NAIC Credit for Reinsurance Model Law, as previously reported on June 12, 2012 and August 27, 2012. It also defines “professional reinsurer” for licensing purposes, in conformity with provisions of the Nonadmitted and Reinsurance Reform Act of 2010 (NRRA). We previously reported on California’s adoption of those provisions of the NRRA relating to surplus lines.
AB 2303 made technical changes throughout the California Insurance Code. Among many other changes, the commissioner has been granted the power to conserve and liquidate an insurer determined to be insolvent or in danger of becoming insolvent by federal regulators under Dodd-Frank.
AB 2138 doubles the potential annual recoupable per-insured surcharge for disability insurance fraud from 10 cents to 20 cents. Rather than split the funding evenly between the California Department of Insurance (CDI) and local district attorneys as under the replaced law, AB 2138 directs 70% of funding to local district attorneys for prosecution of disability insurance fraud.
AB 2029 reinstates CDI oversight of bail fugitive recovery persons, or bounty hunters, to address a perceived decline in the professionalism of such persons since CDI oversight authority lapsed in 2010.