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Paul Zimmerman
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Insurance Regulatory Update

The information below is current as of the date of the report. Additional information about any of these proposals may be obtained from the California Department of Insurance (CDI) web site here.

Department of Insurance Regulations Currently Under Review by OAL – The following CDI regulations are currently under review by the California Office of Administrative Law (OAL).

Low Cost Auto Plan of Operations, OAL File # 2014-1027-01FP. The Department proposes changes to the LCA plan of operations, including a provision requiring that vehicles used for providing services in a transportation network company (TNC), such as Uber or Lyft, cannot be insured through the LCA program but must, instead, be insured as commercial insurance under the CA Auto Assigned Risk Program (CAARP) commercial auto program. The Department exempts these regulations from the Administrative Procedure Act (APA) pursuant to Government Code 11340.9(g), which exempts regulations that fix rates, prices, or tariffs. Final OAL action is due by 12/11/2014.

CAARP of Operations, OAL File # 2014-1027-02FP. Similar to the LCA regulations discussed above, the Department proposes changes to the CAARP plan of operations, including a provision requiring that vehicles used for providing services in a TNC cannot be insured through the CAARP personal auto program but must, instead, be insured as commercial insurance under the CAARP. The Department exempts these regulations from the Administrative Procedure Act (APA) pursuant to Government Code 11340.9(g), which exempts regulations that fix rates, prices, or tariffs. Final OAL action is due by 12/11/2014.

Life Settlement Regulations, OAL File # 2014-1013-03S. A significant revision of the regulations implementing the Insurance Code section 2548, et seq, which establish standards and procedures for life settlements. A life settlement is the process by which a life insurance policy is sold to a third party prior to the death of the insured person. Final OAL action is due by 11/25/2014.

Travel Insurance Agent Licensing Regulations, OAL File # 2014-1014-05S. The Department proposes to 1) set license application and renewal fees for those applying for the limited lines travel insurance agent license; 2) \prescribe required forms and materials for applicants and licensees; 3) implement training requirements for unlicensed travel retailer employees involved in the transaction of travel insurance; and 4) clarify and add specificity to consumer disclosure and record keeping requirements. Final OAL action is due by 11/26/2014.

Recently Approved Department of Insurance Regulations – OAL has approved the following CDI regulations in the past 45 days.

Producer Pre-Licensing Education Standards, OAL File # 2014-0911-01S. Modifies the training standards that must be met by an applicant prior to approval of application for a license as a broker/agent. Approved by OAL on 10/22/2014. Effective Date: 02/19/2015.

Workers Compensation Classification and Rating Rules, OAL File # 2014-0929-05FP. Modifies the California Workers' Compensation Uniform Statistical Reporting Plan-1995, Miscellaneous Regulations for the Recording and Reporting of Data, and the California Workers' Compensation Experience Rating Plan-1995. These regulations will be effective on 01/012015.

Currently Proposed CDI Regulations – The following proposals have been proposed for adoption and are in the public comment stage of the rulemaking process.

Workers Compensation Pure Premium Rate, CDI File # 2014-00015. Adopts a workers compensation pure premium rate of $2.74 per $100 of premium. This rate is advisory only and does not regulate the rates actually charged by workers compensation insurers. The rate is not subject to OAL review. It is effective on 1/1/2015.

Informal Rulemaking Activities – Pursuant to CA Gov. Code 11346.45, state agencies are permitted and encouraged to conduct informal workshops and discussions with interested persons when they are considering adoption of “complex” regulations.

Regulations Regarding An Independent Medical Review System Fee Assessment, CDI File # 2013-00021. A workshop on this topic will be held in Sacramento no 12/1/2014. The draft text of the regulation will be distributed before the workshop occurs. The statute which the proposed regulations would implement, CA Insurance Code 10169, applies to health insurance.

This article is not offered as, and should not be relied on as, legal advice. You should consult an attorney for advice in specific situations.