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TABLE OF CONTENTS

• CITATION
• STATUS
• WHAT'S NEW
• ENACTED TEXT

CITATION
2005 CA SB 150


STATUS
This legislation was assigned the status of Chaptered
 on 09/30/2005.

Author: Escutia
Session: California 2005-06 Regular Session
StateNet Processing Date: 10/06/2005


ENACTED TEXT
                                  CHAPTER 436
               FILED WITH SECRETARY OF STATE  SEPTEMBER 30, 2005
                    APPROVED BY GOVERNOR  SEPTEMBER 30, 2005
                      PASSED THE SENATE  SEPTEMBER 7, 2005
                      PASSED THE ASSEMBLY  AUGUST 31, 2005
                       AMENDED IN ASSEMBLY  JULY 7, 2005
                       AMENDED IN ASSEMBLY  JUNE 27, 2005
                       AMENDED IN ASSEMBLY  JUNE 16, 2005
                         AMENDED IN SENATE  MAY 4, 2005
                        AMENDED IN SENATE  APRIL 4, 2005

                       INTRODUCED BY Senator Escutia

                                FEBRUARY 7, 2005
    An act to amend Section 791.10 of the Insurance Code, relating to
insurance underwriting.
                          LEGISLATIVE COUNSEL'S DIGEST

    SB 150, Escutia Insurance: adverse underwriting decisions.

    Existing law requires that, in the event of an adverse underwriting
decision, as defined, the insurance institution or agent responsible for the
decision comply with certain requirements, including a requirement to either
provide the consumer with the specific reasons for the adverse underwriting
decision in writing or advise the person that upon written request he or she
may receive the specific reasons in writing.

    This bill would provide that, as of July 1, 2006, with respect to a
declination, cancellation, or nonrenewal of an individual homeowners', auto,
life, health, or disability insurance policy, the insurance institution or
agent responsible for the decision shall provide the specific reason or
reasons in writing at the time of the decision, except as specified.
    THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

    SECTION 1. Section 791.10 of the Insurance Code is amended to read:

    791.10. (a) In the event of an adverse underwriting decision the insurance
institution or agent responsible for the decision shall:

    (1) Either provide the applicant, policyholder, or individual proposed for
coverage with the specific reason or reasons for the adverse underwriting
decision in writing or, except as provided in subdivision (e), advise the
person that upon written request he or she may receive the specific reason or
reasons in writing.

    (2) Provide the applicant, policyholder or individual proposed for
coverage with a summary of the rights established under subdivision (b) and
Sections 791.08 and 791.09.

    (b) Upon receipt of a written request within 90 business days from the
date of the mailing of notice or other communication of an adverse
underwriting decision to an applicant, policyholder or individual proposed
for coverage, the insurance institution or agent shall furnish to such person
within 21 business days from the date of receipt of such written request:

    (1) The specific reason or reasons for the adverse underwriting decision,
in writing, if such information was not initially furnished in writing
pursuant to paragraph (1) of subdivision (a).

    (2) The specific items of personal and privileged information that support
those reasons; provided, however:

    (A) The insurance institution or agent shall not be required to furnish
specific items of privileged information if it has a reasonable suspicion,
based upon specific information available for review by the commissioner,
that the applicant, policyholder or individual proposed for coverage has
engaged in criminal activity, fraud, material misrepresentation or material
nondisclosure.

    (B) Specific items of medical record information supplied by a medical
care institution or medical professional shall be disclosed either directly
to the individual about whom the information relates or to a medical
professional designated by the individual and licensed to provide medical
care with respect to the condition to which the information relates,
whichever the individual prefers.

    Mental health record information shall be supplied directly to the
individual, pursuant to this subdivision, only with the approval of the
qualified professional person with treatment responsibility for the condition
to which the information relates.

    (3) The names and addresses of the institutional sources that supplied the
specific items of information given pursuant to paragraph (2) of subdivision
(b); provided, however, that the identity of any medical professional or
medical care institution shall be disclosed either directly to the individual
or to the designated medical professional, whichever the individual prefers.

    (c) The obligations imposed by this section upon an insurance institution
or agent may be satisfied by another insurance institution or agent
authorized to act on its behalf.

    (d) When an adverse underwriting decision results solely from an oral
request or inquiry, the explanation of reasons and summary of rights required
by subdivision (a) or (e) may be given orally to the extent that such
information is available.

    (e) Except as provided in subdivision (d), with respect to a declination,
cancellation, or nonrenewal of a property insurance policy covered by Section
675 or an automobile insurance policy covered by Section 660, or an
individual life, health, or disability insurance policy, the insurance
institution or agent responsible for the decision shall provide the specific
reason or reasons in writing at the time of the decision. The communication
of medical record information for a life or health insurance policy shall be
subject to the disclosure requirements of subparagraph (B) of paragraph (2)
of subdivision (a). This subdivision shall become operative on July 1, 2006.

WHAT'S NEW
Description of Changes
There are no recorded changes for this document.

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