Legislative Update


Both Assembly and Senate Appropriations Committees met this past week for marathon hearings.  August 26th is the last day for fiscal committees to meet and report all bills to the respective floors.  Next week, both committees will consider bills placed on their respective Suspense Files.  The following is a legislative update for the bills heard this past week:

Senate Appropriations Committee

AB 22 (Mendoza): This bill would prohibit an employer, with the exception of certain financial institutions, from obtaining a consumer credit report for employment purposes unless the information is substantially job related and the position of the person for whom the report is sought is (1) a position in the state Department of Justice, (2) a managerial position, (3) that of a sworn peace officer or other law enforcement position or (4) a position for which the information contained in the report is required to be disclosed by law or to be obtained by the employer.

This bill is opposed by a coalition of business interests.  They have been working with the author in an attempt to get him to accept some amendments that would address their concerns.  However, the author continues to move the bill in its current form.

AB 22 passed the committee with a vote of 5-2.

AB 52 (Feuer): This bill would prohibit health care service plans and health insurers from implementing a rate for a new product or instituting a rate change unless it submits an application to the Department of Managed Health Care (DMHC) or the California Department of Insurance (CDI) and the application is approved.  The Director of DMHC and the Insurance Commissioner would have the authority to approve, deny, or modify any proposed rate or rate change.

AB 52 was placed on the Suspense File.

AB 228 (Fuentes): This bill would expand the authority of the State Compensation Insurance Fund (SCIF) to permit the fund to insure for the purposes of workers' compensation coverage out-of-state employees of a qualified in-state employer.  This bill would require the Department of Insurance to report by March 2015 regarding the experience of the fund in engaging in insuring out-of-state employees of in-state employers.

AB 228 was placed on the Suspense File.

AB 375 (Skinner): This bill would provide, with respect to hospital employees, who provide direct patient care in an acute care hospital, that the term  "injury" include a blood borne infectious disease or methicillin-resistant Staphylococcus aureus (MRSA) that develops or manifests itself during the period of the person's employment with the hospital.  This bill would further create a disputable presumption that the above injury arises out of and in the course of the person's employment if it develops or manifests.

AB 375 was placed on the Suspense File.

AB 378 (Solorio): This bill would regulate the dispensing of compounded medications and related products in the workers' compensation system.

AB 378 passed the committee with a unanimous vote.

AB 624 (J. Perez): This bill would extend the Community Development Financial Institution (CDFI) investments tax credit until January 1, 2017.  The bill would also authorize the Insurance Commissioner to establish a California Organized Investment Network (COIN) Advisory Board until January 1, 2015.

AB 624 was placed on the Suspense File.

AB 689 (Blumenfield): This bill would require adoption of more stringent procedures to assess suitability of proposed annuity sales for customers, including requiring insurers to establish a system to supervise the suitability of annuity sale recommendations.  In addition, would establish mandatory standards, procedures and processes, for insurers and producers, for assessing suitability and monitoring annuity sales recommendations made to consumers so that the insurance needs and financial objectives of consumers at the time of the transaction are appropriately addressed.

AB 689 passed the committee with a unanimous vote.

AB 714 (Atkins): This bill would require notices of health care eligibility be sent to individuals who are enrolled in, or who cease to be enrolled in, publicly-funded state health care programs.

AB 714 was placed on the Suspense File.

AB 792 (Bonilla): This bill would require courts, health care service plans, health insurers, employers, and the Employment Development Department (EDD) to provide a notice of the availability of coverage in the California Health Benefit Exchange (Exchange), effective January 1, 2014.

AB 792 was placed on the Suspense File.

AB 878 (Berryhill): This bill would require a workers' compensation insurer to report to the Contractors State License Board when the insurer cancels the insurance policy of a licensed contractor after the insurer has conducted an audit of the contractor, the contractor has made a material misrepresentation that results in financial harm to the insurer, and no reimbursement has been paid by the contractor to the insurer.  AB 878 would also provide that willful or deliberate disregard and violation of workers' compensation insurance laws by a contractor constitutes a cause for disciplinary action.

AB 878 passed the committee with a unanimous vote.

AB 947 (Solorio): This bill would permit disability payments for a single injury causing temporary disability that occurred after January 1, 2012 to be extended, and would prohibit the payments from extending for more than 240 compensable weeks within five years of the date of injury.

AB 947 was placed on the Suspense File.

AB 1024 (Hueso): This bill would authorize insurance agents and brokers to sell low-cost auto insurance through an Internet website, and require the California Automobile Assigned Risk Plan (CAARP) to create a website for referring consumers to certified agents or brokers for the purchase of low-cost automobile insurance.  The bill would additionally require the Department of Motor Vehicles (DMV) to update the insert regarding the low-cost automobile insurance program that is included in registration renewals to reflect the online program established by this measure.

AB 1024 passed the committee with a vote of 8-0.

AB 1083 (Monning): This bill would, effective January 1, 2014, make a number of changes to state laws governing the sale of small group insurance products to largely conform state law to provisions in the federal Patient Protection and Affordable Care Act (ACA).  The bill would make changes to laws governing the offering and sale of small group insurance products that become effective January 1, 2012, pertaining to self-employed individuals, the duration of premium rates, notification of availability of coverage, and notice of material modifications by carriers.

AB 1083 passed the committee with a vote of 6-2.

AB 1168 (Pan): This bill would require, by January 1, 2013, the Administrative Director (AD) of the Division of Workers' Compensation to adopt a fee schedule that establishes reasonable hourly fees paid for services provided by vocational experts.  This bill would prohibit a vocational expert from being paid, and would prohibit the Workers' Compensation Appeals Board from allowing, vocational expert fees in excess of those that are reasonable, actual, and necessary.

AB 1168 passed the committee with a vote of 6-0.

AB 1369 (Gatto): This bill would disallow any deductions from gross income taxes any expenses attributed to income derived by a taxpayer from any criminal profiteering activity, including insurance fraud.

AB 1369 passed the committee with a unanimous vote.

AB 1423 (Perrea): This bill, an urgency bill, would conform state laws to recent federal changes that affect the tax treatment of regulated investment companies, which are mutual funds and other similar investment companies.

AB 1423 was placed on the Suspense File.

SB 116 (De Leon): This bill, an urgency statute, would make changes to apportionment formulas used to determine California taxable income for specified multistate corporations, change the rules for assigning intangibles and services for cable companies, expand eligibility for the 2009 jobs tax credit, enact a new education tax credit, and create a new sales and use tax exclusion for manufacturing equipment.

SB 116 passed the committee with a vote of 5-2.

Assembly Appropriations Committee

SB 6 (Calderon): This bill would update California's real estate and appraisal law to reflect recent changes enacted at the federal level pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act.

SB 6 passed the committee unanimously.

SB 51(Alquist): This bill would codify several health insurance market reforms enacted by the federal Patient Protection and Affordable Care Act.

SB 51 was placed on the Suspense File.

SB 53 (Calderon): This bill would provide the Department of Real Estate with additional enforcement authority and establishes additional protections for consumers relating to real estate licensees.

SB 53 passed the committee with a unanimous vote.

SB 127 (Emmerson): This bill would require the Administrative Director of the Division of Workers' Compensation to adopt annually the Current Procedural Terminology (CPT) codes, descriptors, and modifiers published by the American Medical Association in order to keep the fee schedule for physicians' services updated.

SB 127 passed the committee with a unanimous vote.

SB 131 (Gaines): This bill would clarify reporting requirements by surplus lines brokers when two or more brokers are involved in a transaction.  In the case of surplus lines insurance, there is frequently more than one broker involved because the nature of this insurance is often complex and requires many parties to complete.

SB 131 passed the committee with a unanimous vote.

SB 155 (Evans): This bill would require policies in the individual and group health insurance markets to provide coverage for maternity services.  This bill would create a mandate on insurers and not health plans, as health plans must cover maternity benefits under current law.

SB 155 was placed on the Suspense File.

SB 457 (Calderon): This bill would require that the Workers' Compensation Appeals Board reimburse for all benefits and services paid by a health insurance plan, group disability policy, hospital service contract, or a self-insured employee welfare benefit plan that should have been covered by workers compensation insurance, even if those costs are in excess of the official medical fee schedule.

SB 457 was placed on the Suspense File.

SB 507 (DeSaulnier): This bill would extend from 45 days to 90 days the deadline for new owners of real property and certain legal entities to submit a change-in-ownership or a change-in-control statement and increases the penalty for failure to file a change-in-ownership statement in the case of real property transfers that must be reported to the local county assessor.

SB 507 passed the committee with a vote of 12-5.

SB 590 (Calderon): This bill would exempt the sale of certain life insurance policies for funeral and burial expenses from the requirement that the agent provide the senior with a notice at least 24 hours prior to the initial meeting, provided a 60-day cancellation period is allowed.

SB 590 passed the committee with a unanimous vote.

SB 599 (Kehoe): This bill would allow life insurance companies to place benefits in a retained-asset account (RAA) only if the beneficiary does not choose one of the other available settlement options, such as a lump sum payment.  In addition, an RAA can only be used if a prominent disclosure has been provided on the claim form.

SB 599 passed the committee with a unanimous vote.

SB 621 (Calderon): This bill would invalidates any provision in a life insurance or disability insurance policy that provides discretionary authority to the insurer to determine eligibility for benefits or coverage.

SB 621 passed the committee with a unanimous vote.

SB 712 (Committee on Insurance): This bill would require every admitted property and casualty insurer, unless exempt, to annually submit a Statement of Actuarial Opinion with supporting documents and an Actuarial Opinion Summary.  In addition, it exempts from public disclosure, required under the California Public Records Act (CPRA), all actuarial reports, work papers, or opinion summaries submitted in support of the Statement of Actuarial Opinion, and states that such records would not be subject to subpoena or discovery, or be admissible in evidence in any private party civil action.

SB 712 passed the committee with a unanimous vote.

SB 757 (Lieu): This bill would require that out-of-state health insurance or health plan issuers comply with requirements to provide coverage to domestic partners.  These requirements currently only apply to in-state carriers.

SB 757 passed the committee with a vote of 12-5.

SB 826 (Leno): This bill would establish penalties for the failure of an employer to report claim information to the Workers' Compensation Information System (WCIS).

SB 826 passed the committee with a vote of 12-5.

SB 863 (Lieu): This bill would adopt reforms to the lien procedures in the workers' compensation system.  Specifically, this bill would require lien claimants to file their liens in writing with the Workers' Compensation Appeals Board (WCAB), accompanied by a statement or itemized voucher supporting the lien and justifying the right to reimbursement.  This bill would also require the lien claimant to provide notice to all interested parties. In addition, the measure would prohibit filing a lien after three years from the date the services were provided for services provided prior to July 1, 2012, and 18 months from the date the services were provided for services provided on or after July 1, 2012.  Lastly, SB 863 would provide that the limitation periods noted above apply to any lien filed on or after the effective date of the bill, regardless of the date the services were provided.

SB 863 passed the committee with a unanimous vote.

SB 869 (Yee): This bill would make it a misdemeanor for an automotive repair dealer to fail to repair and fully restore a deployed airbag to its original operating condition after the dealer prepares a written estimate for repairs that includes replacement of a deployed airbag and the customer has paid for the airbag as provided in the estimate.  The offense is punishable by a fine of $5,000 and/or up to one year in county jail.

SB 869 passed the committee with a unanimous vote.