11629.7. (a) There is established, within the California Automobile
Assigned Risk Plan established under Section 11620, a low-cost
automobile insurance program for all counties in California.
(b) For the purpose of making the low-cost automobile insurance
program operational in all counties of California, pursuant to
subdivision (a), a low-cost automobile insurance program shall
commence operations in the Counties of Alameda, Fresno, Orange,
Riverside, San Bernardino, and San Diego, effective April 1, 2006,
and shall be made operational in all other counties of California
based upon a determination of need made by the commissioner. Program
outreach shall focus primarily on those counties which have the
highest number of uninsured drivers or the highest percentage of
uninsured drivers or the highest percentage of low-income
individuals. In making the determination of need for each county, the
commissioner shall consider each of the following:
(1) The number or percentage of motorists within the county who
are uninsured.
(2) The number or percentage of residents within the county who
are low income.
(3) The availability of affordable automobile insurance options
for the county's low-income residents within the private automobile
insurance marketplace.
(c) (1) After making the initial determination of need, the
commissioner shall, as soon as is practicable, hold a public meeting
in that county.
(2) The public meeting required by paragraph (1) shall be held not
for the consideration of rates, but for the public discussion of the
need and desirability of the program for the consumers of the
county. Within 30 days after the public meeting, the commissioner
shall make public his or her final determination of whether a need
for the program exists within the county. A separate hearing shall be
held for the consideration of rates pursuant to Section 11629.72.
(d) The commissioner, after a public hearing, shall approve or
issue a reasonable plan for the equitable apportionment, among
insurers required to participate in the California Automobile
Assigned Risk Plan established under Section 11620, of persons
residing in the counties or cities and counties set forth in
subdivisions (a) and (b) who are eligible to purchase through the
program established in each county or city and county a low-cost
automobile insurance policy, as described in Section 11629.71. The
program shall be conducted in conjunction with the California
Automobile Assigned Risk Plan established under Section 11620.
11629.71. A low-cost automobile insurance policy for purposes of
the program established under this article shall have all of the
following attributes:
(a) The policy shall offer coverage in the amount of ten thousand
dollars ($10,000) for bodily injury to, or death of, each person as a
result of any one accident and, subject to that limit as to one
person, the amount of twenty thousand dollars ($20,000) for bodily
injury to, or death of all persons as a result of any one accident,
and the amount of three thousand dollars ($3,000) for damage to
property of others as a result of any one accident.
(b) The coverage required by Section 11580.2 shall be made
available to the consumer. However, an insurer may charge a premium
for that coverage in addition to the premium set forth in Section
11629.72. Notwithstanding the coverage amounts required by Section
11580.2 and Section 16056 of the Vehicle Code, uninsured motorist
coverage issued in conjunction with a low-cost automobile policy
under the program, with coverage limits at least equal to the limits
of liability in the underlying low-cost automobile policy, shall
satisfy the requirements of Section 11580.2 and the financial
responsibility requirements of Sections 4000.37, 16021, and 16431 of
the Vehicle Code.
(c) Medical payments coverage shall be made available to the
consumer. However, an insurer may charge a premium for that coverage
in addition to the premium set forth in Section 11629.72.
(d) The policy shall have an initial term of one year, renewable
on an annual basis thereafter.
(e) The policy shall cover the person named in the policy, and to
the same extent that insurance is provided to the named insured, any
other person using the automobile, provided the use is with his or
her permission, express or implied, and within the scope of that
permission, except that the policy shall not cover members of the
named insured's household who do not satisfy the requirements of
subdivisions (b) to (e), inclusive, of Section 11629.73.
(f) The policy shall provide coverage for an automobile with a
value, at the time of purchase by the insured, of twenty thousand
dollars ($20,000) or less, as evidenced by the value given to the
automobile by the Department of Motor Vehicles in assessing vehicle
license fees.
11629.72. (a) Effective March 1, 2003, the annual rate offered
under the program for the low-cost automobile policy, unless and
until the time that the rate is adjusted, shall be three hundred
forty-seven dollars ($347) per covered vehicle for the County of Los
Angeles and three hundred fourteen dollars ($314) per covered vehicle
for the City and County of San Francisco, unless the commissioner
establishes that rate or a different rate prior to that time. The
annual rate offered initially under the program for each of the
Counties of Alameda, Fresno, Orange, Riverside, San Bernardino, and
San Diego shall be established by the commissioner no later than
April 1, 2006. The annual rate offered initially under the program
for each of the other counties in California shall be established at
a date according to the discretion of the commissioner. A surcharge,
as a percentage of the base rate, shall be added to the base rate and
that percentage shall be set at the discretion of the commissioner,
if the named insured is an unmarried male between the ages of 19 and
24, inclusive, or if an unmarried male between the ages of 19 and 24,
inclusive, resides in the household of the named insured and will be
a driver of the automobile covered under the low-cost policy.
(b) In addition to existing premium installment options offered by
the California Automobile Assigned Risk Plan under Article 4
(commencing with Section 11620), the plan shall also make available
to an insured under the program a premium installment option pursuant
to which an insured is required to pay not more than 15 percent of
the total policy cost upon issuance of the low-cost policy, followed
thereafter by six other payments. No other premium financing
arrangement shall be permitted.
(c) Rates for policies issued under the program in each county or
city and county shall be reviewed and revised as follows:
(1) Rates shall be sufficient to cover (A) losses incurred under
policies issued under the program, and (B) expenses, including, but
not limited to, all reasonable and necessary expenses such as the
costs of administration, underwriting, taxes, commissions, and claims
adjusting, that are incurred due to participation in the program.
For purposes of this paragraph, "losses incurred" means claims paid,
claims incurred and reported, and claims incurred but not yet
reported. In assessing loss reserves, the commissioner shall only
allow loss reserves that are estimated from actual losses in the
program or comparable data by a licensed statistical agent, as
adjusted to reflect coverage provided under the program.
(2) Rates shall be set so as to result in no projected subsidy of
the program by those policyholders of insurers issuing policies under
the program who are not participants in the program.
(3) Rates shall be set with respect to the program so as to result
in no projected subsidy by policyholders in one county of
policyholders in any of the other counties.
(4) Commencing on January 1, 2001, and annually thereafter, the
California Automobile Assigned Risk Plan shall submit the loss and
expense data, together with a proposed rate and the surcharge
authorized by subdivision (a) for the low-cost automobile policy for
the program, to the commissioner for approval in accordance with this
chapter. The commissioner shall act on the recommendation within 90
days.
11629.73. A low-cost automobile insurance policy under the program
shall only be available for purchase by persons who satisfy the
following eligibility requirements:
(a) The person shall be in a household with a gross annual
household income that does not exceed 250 percent of the federal
poverty level, as defined in Part 6.2 (commencing with Section 12693)
or as defined in an equivalent manner that is approved by the
commissioner.
(b) The person shall be no less than 19 years of age and have been
continuously licensed to drive an automobile for the previous three
years.
(c) The person shall have not more than one of either, but not
both, of the following within the previous three years:
(1) A property damage only accident in which the driver was
principally at fault.
(2) A point for a moving violation.
(d) The person shall not have on record within the previous three
years, an at-fault accident involving bodily injury or death.
(e) The person shall not have a felony or misdemeanor conviction
for a violation of the Vehicle Code on his or her motor vehicle
record.
(f) The person shall not be a college student claimed as a
dependent of another person for federal or state income tax purposes.
11629.731. A person who meets the requirements of subdivision (a)
of Section 11629.73, and who claims that he or she meets the
requirements of subdivisions (b) to (e), inclusive, of Section
11629.73 based entirely or partially on a driver's license and
driving experience obtained other than in the United States or
Canada, shall be entitled to a rebuttable presumption that he or she
is qualified to purchase a low-cost automobile insurance policy under
the program if he or she has been licensed to drive pursuant to a
license obtained in the United States or Canada for at least the
previous 18 months and meets the criteria of subdivisions (b) to (e),
inclusive, for that period.
11629.74. (a) Application may be made through any producer
certified by the plan. The applicant, in order to demonstrate
financial eligibility to purchase a low-cost automobile insurance
policy under the program, shall present at the time of applying for
the policy, a copy of the applicant's federal or state income tax
return for the previous year or other reliable evidence from a
governmental agency or governmental means-tested program of the
applicant's gross annual household income, pursuant to regulations
issued under subdivision (b) of Section 11629.79.
(b) The applicant shall certify that the representations made in
the documents submitted as proof of financial eligibility and in the
application for the policy are true, correct, and contain no material
misrepresentations or omissions of fact to the best knowledge and
belief of the applicant.
(c) The certified producer shall forward the application,
supporting documents, and the applicant's certification to the
California Automobile Assigned Risk Plan.
11629.745. (a) An agent or broker (hereafter referred to as a
producer) who conducts business in a county in which a low-cost
automobile insurance policy is available pursuant to this article
shall inform every new prospective automobile insurance policyholder
who requests a minimum limits or basic limits insurance policy, or
coverage to meet California's minimum limits automobile insurance
requirements, that the low-cost automobile insurance policy may be
available for qualifying motorists. The information may be provided
verbally if the producer has been contacted by telephone, or in
writing, but shall be communicated to the policyholder prior to the
application for automobile insurance coverage in the language in
which the producer has otherwise communicated with the consumer.
(b) If the consumer requests more information about the low-cost
program the producer shall do either of the following:
(1) If the producer is California Automobile Assigned Risk Plan
certified, provide the consumer with an explanation in an information
pamphlet produced by the California Automobile Assigned Risk Plan
and approved and provided by the Department of Insurance of the
qualifications, cost and coverage provided by the policy. If the
consumer qualifies for the low-cost policy and wishes to purchase the
policy, the California Automobile Assigned Risk Plan certified
producer shall provide the application and, upon completion, submit
the application, supporting documents, and the applicant's
certification to the California Automobile Assigned Risk Plan. The
submittal of the California Automobile Assigned Risk Plan application
may be in addition to any other coverage offered or applied for
through the producer.
(2) If the producer is not California Automobile Assigned Risk
Plan certified, the producer shall provide the consumer with the
toll-free telephone number for the California Automobile Assigned
Risk Plan as an option to coverage offered by the producer.
11629.75. (a) A certified producer shall provide to an applicant
for a low-cost automobile insurance policy under this article a
notice relating to coverage under the policy. The notice shall be
provided in a separate document at the time of application, and
include the following statement in 14-point boldface type:
"NOTICE
INSURANCE COVERAGE PROVIDED IN THE POLICY YOU ARE BUYING CONTAINS
REDUCED LIABILITY COVERAGE FOR PERSONAL INJURIES OR PROPERTY DAMAGE
RESULTING FROM THE OPERATION OF THE INSURED VEHICLE. IF LOSSES FROM
AN AUTOMOBILE ACCIDENT EXCEED THE COVERAGE PROVIDED BY THIS POLICY,
YOU CAN BE HELD PERSONALLY LIABLE AND RESPONSIBLE FOR THOSE LOSSES.
THIS POLICY PROVIDES LIABILITY COVERAGE FOR INJURIES OR DEATH
CAUSED TO OTHER PERSONS IN THE TOTAL AMOUNT OF TEN THOUSAND DOLLARS
($10,000) PER PERSON IN ANY ONE ACCIDENT, AND UP TO A TOTAL AMOUNT OF
TWENTY THOUSAND DOLLARS ($20,000) FOR ALL PERSONS IN ANY ONE
ACCIDENT. THE POLICY ALSO PROVIDES UP TO A TOTAL AMOUNT OF THREE
THOUSAND DOLLARS ($3,000) IN LIABILITY COVERAGE FOR PROPERTY DAMAGE
IN ANY ONE ACCIDENT. IF YOU WANT MORE INSURANCE COVERAGE, YOU MUST
REQUEST A DIFFERENT POLICY.
THIS POLICY ALSO DOES NOT COVER DAMAGE TO YOUR OWN VEHICLE, LOSSES
RESULTING FROM YOUR BODILY INJURY OR DEATH, OR COVERAGE FOR LOSSES
CAUSED BY AN UNINSURED OR UNDERINSURED DRIVER. HOWEVER, THESE OTHER
COVERAGES MAY BE AVAILABLE AT EXTRA COST THROUGH OTHER INSURERS.
THIS POLICY MAY ALSO CONTAIN UNINSURED MOTORIST BODILY INJURY
COVERAGE IN THE TOTAL AMOUNT OF TEN THOUSAND DOLLARS ($10,000) PER
PERSON IN ANY ONE ACCIDENT AND UP TO A TOTAL AMOUNT OF TWENTY
THOUSAND DOLLARS ($20,000) FOR ALL PERSONS IN ANY ONE ACCIDENT, IF
YOU SO CHOOSE. IN ADDITION, THIS POLICY MAY ALSO CONTAIN MEDICAL
PAYMENTS COVERAGE IN THE AMOUNT OF ONE THOUSAND DOLLARS ($1,000) PER
PERSON IN ANY ONE ACCIDENT, IF YOU SO CHOOSE.
THIS POLICY DOES NOT COVER ANY OTHER DRIVER IN YOUR HOUSEHOLD WHO:
(a) IS UNDER 19 YEARS OF AGE; OR
(b) HAS LESS THAN 3 YEARS OF CONTINUOUSLY LICENSED DRIVING
EXPERIENCE; OR
(c) HAS MORE THAN ONE OF EITHER, OR BOTH, OF THE FOLLOWING:
--A PROPERTY DAMAGE ONLY ACCIDENT IN WHICH THE DRIVER WAS
PRINCIPALLY AT FAULT.
--A POINT FOR A MOVING VIOLATION; OR
(d) HAS IN THE PREVIOUS 3 YEARS AN AT-FAULT ACCIDENT INVOLVING
BODILY INJURY OR DEATH; OR
(e) HAS A FELONY OR MISDEMEANOR CONVICTION FROM A VIOLATION OF THE
VEHICLE CODE ON HIS OR HER MOTOR VEHICLE RECORD."
(b) When the certified producer establishes delivery of the
disclosure form specified in subdivision (a) by obtaining the
signature of the applicant or insured, there shall be a conclusive
presumption that the certified producer has complied with the
disclosure requirements of this section.
11629.76. (a) For a low-cost automobile insurance policy issued
pursuant to the program, certified producers shall be entitled to the
same commission rate as is paid by the California Automobile
Assigned Risk Plan for private passenger, nonfleet risks under
Article 4 (commencing with Section 11620).
(b) Notwithstanding subdivision (a), the commissioner may at any
time establish a commission for a low-cost automobile insurance
policy issued pursuant to the program and may make the commission
effective on any policy originated within an entire year, or any
portion of a year, as is needed to provide an incentive to certified
producers to sell low-cost automobile insurance to eligible
applicants. The commissioner shall not establish a commission
pursuant to this subdivision if the commissioner determines that
setting the commission rate will result in a lower commission
percentage than would exist pursuant to subdivision (a).
(c) No other fees of any kind may be charged or collected pursuant
to this section and the sale of a low-cost policy under this article
shall not be conditioned on the purchase of any other product or
service.
11629.77. (a) A low-cost automobile insurance policy issued
pursuant to the program shall be canceled only for the following
reasons:
(1) Nonpayment of premium.
(2) Fraud or material misrepresentation affecting the policy or
the insured.
(3) The purchase of additional automobile liability insurance
coverage in violation of subdivision (a) of Section 11629.78.
(4) The purchase or maintenance of automobile liability insurance
coverage other than a low-cost policy for any additional vehicles in
the insured's household, in violation of subdivision (b) of Section
11629.78.
(b) A policy shall be nonrenewed only for the following reasons:
(1) A substantial increase in the hazard insured against.
(2) The insured no longer meets the applicable eligibility
requirements. In this regard, the eligibility of an insured shall be
recertified by the California Automobile Assigned Risk Plan after the
first year of eligibility, and annually thereafter by the insurer
that issued the policy.
11629.78. (a) An insured under the program shall not purchase
automobile liability insurance coverage that is in addition to the
liability coverage provided by the low-cost policy. However, the
insured may purchase any other additional type of automobile
insurance coverage, such as uninsured motorist coverage or collision
coverage outside the plan.
(b) An insured under the program shall not purchase or maintain
any automobile liability insurance coverage other than a low-cost
policy for any additional vehicles in the insured's household.
(c) No more than two low-cost policies per person are permitted.
11629.79. (a) The program for the County of Los Angeles and the
City and County of San Francisco is authorized to commence operations
on January 1, 2000, but shall be fully operational no later than
July 1, 2000.
(b) To this end, the commissioner, in consultation with the
California Automobile Assigned Risk Plan, shall adopt regulations to
implement the provisions of this article within 60 days of its
effective date. The regulations shall be adopted as emergency
regulations in accordance with Chapter 3.5 (commencing with Section
11340) of the Government Code, and for purposes of that chapter, the
adoption of the regulations shall be considered by the Office of
Administrative Law to be necessary for the immediate preservation of
the public peace, health and safety, and general welfare.
(c) The program for the Counties of Alameda, Fresno, Orange,
Riverside, San Bernardino, and San Diego shall commence operations on
April 1, 2006, and shall be made operational in all other counties
of California according to the discretion of the commissioner. The
commissioner, in consultation with the California Automobile Assigned
Risk Plan, shall adopt regulations to implement the expansion of the
program to these counties. The regulations shall be adopted as
emergency regulations in accordance with Chapter 3.5 (commencing with
Section 11340) of the Government Code, and for purposes of that
chapter, the adoption of the regulations shall be considered by the
Office of Administrative Law to be necessary for the immediate
preservation of the public peace, health and safety, and general
welfare.
11629.8. Notwithstanding the coverage amounts required by Section
16056 of the Vehicle Code, a low-cost automobile policy issued under
the program shall satisfy the financial responsibility requirements
of Sections 4000.37, 16021, and 16431 of the Vehicle Code.
11629.81. The California Automobile Assigned Risk Plan shall report
to the Legislature on an annual basis, and at those additional times
as it deems prudent, on the status of the program.
11629.82. Nothing in this article is intended to amend or otherwise
affect or interpret any provision of Proposition 103, approved by
the electors on November 8, 1988, and no provision of that initiative
measure applies to this article.
11629.83. An action challenging the constitutionality of the
establishment of the pilot program by this article shall be commenced
in a court of competent jurisdiction no later than February 1, 2000.
11629.84. This article shall remain in effect only until January 1,
2016, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2016, deletes or extends
that date.
11629.85. (a) On or before March 1 of each year, the commissioner
shall prepare and propose a plan to the Senate Committee on Banking,
Finance, and Insurance and the Assembly Committee on Insurance
setting forth the methods the commissioner intends to implement to
inform households eligible for the program about the availability of
low-cost automobile insurance. To be eligible for funding through the
budget process, the plan shall be reviewed by the Senate Committee
on Banking, Finance, and Insurance and the Assembly Committee on
Insurance. The information required under subdivision (c) shall also
be provided to the Senate Committee on Transportation and Housing and
the Assembly Committee on Transportation.
(b) The plan shall include, at a minimum, a brief description of
methods proposed to be used, anticipated costs, sources of revenue,
goals, targets, objectives, and a justification of the proposed
methods. The plan shall also explain how the department proposes to
work in cooperation with the California Automobile Assigned Risk
Plan, the social service departments in eligible counties, the
Department of Motor Vehicles, and community-based organizations in
order to inform eligible households of the existence of the program.
(c) The plan shall also include all of the following:
(1) The commissioner's determination regarding whether the program
has been successful, based on the criteria specified in subdivision
(d), and an explanation regarding that success or lack thereof.
(2) In cooperation with the California Automobile Assigned Risk
Plan, structural characteristics of the program that may require
statutory revision in order for the program to succeed or to improve
upon existing success.
(3) Impediments to success of the program that can reasonably be
overcome by revision to the strategies adopted by the department.
(4) A detailed explanation of the department's use for the program
of funds assessed pursuant to Section 1872.81.
(5) For the previous calendar year, a list of the total low-cost
auto premium for each county in which the program was available.
(d) The program is successful if the following occur:
(1) The program generated sufficient premiums to cover losses
incurred under policies issued under the program, and expenses
incurred by the program, as calculated pursuant to subdivision (c) of
Section 11629.72.
(2) The program served the public purpose of offering access to
automobile insurance to otherwise underserved communities in the
program areas.
(3) The program offered access to automobile insurance to
previously uninsured motorists seeking affordable coverage in the
program areas.
(4) The program's outreach efforts lead uninsured motorists to
contact a producer, and the driver obtains any auto insurance policy
that complies with California law.
(e) Any written or oral advertisements, including, but not limited
to, paid or unpaid commercial or noncommercial advertising, by the
department with reference to the low-cost automobile insurance
program shall reference the department and shall not reference the
commissioner by name or office, or include the commissioner's voice,
image, or likeness. The department shall not participate with any
nongovernmental entity that produces or intends to produce
advertisements or educational material that include the name of the
commissioner or his or her voice, image, or likeness, and that are
intended to make eligible households aware of the existence of
low-cost automobile insurance.
11629.7. (a) There is established, within the California Automobile
Assigned Risk Plan established under Section 11620, a low-cost
automobile insurance program for all counties in California.
(b) For the purpose of making the low-cost automobile insurance
program operational in all counties of California, pursuant to
subdivision (a), a low-cost automobile insurance program shall
commence operations in the Counties of Alameda, Fresno, Orange,
Riverside, San Bernardino, and San Diego, effective April 1, 2006,
and shall be made operational in all other counties of California
based upon a determination of need made by the commissioner. Program
outreach shall focus primarily on those counties which have the
highest number of uninsured drivers or the highest percentage of
uninsured drivers or the highest percentage of low-income
individuals. In making the determination of need for each county, the
commissioner shall consider each of the following:
(1) The number or percentage of motorists within the county who
are uninsured.
(2) The number or percentage of residents within the county who
are low income.
(3) The availability of affordable automobile insurance options
for the county's low-income residents within the private automobile
insurance marketplace.
(c) (1) After making the initial determination of need, the
commissioner shall, as soon as is practicable, hold a public meeting
in that county.
(2) The public meeting required by paragraph (1) shall be held not
for the consideration of rates, but for the public discussion of the
need and desirability of the program for the consumers of the
county. Within 30 days after the public meeting, the commissioner
shall make public his or her final determination of whether a need
for the program exists within the county. A separate hearing shall be
held for the consideration of rates pursuant to Section 11629.72.
(d) The commissioner, after a public hearing, shall approve or
issue a reasonable plan for the equitable apportionment, among
insurers required to participate in the California Automobile
Assigned Risk Plan established under Section 11620, of persons
residing in the counties or cities and counties set forth in
subdivisions (a) and (b) who are eligible to purchase through the
program established in each county or city and county a low-cost
automobile insurance policy, as described in Section 11629.71. The
program shall be conducted in conjunction with the California
Automobile Assigned Risk Plan established under Section 11620.
11629.71. A low-cost automobile insurance policy for purposes of
the program established under this article shall have all of the
following attributes:
(a) The policy shall offer coverage in the amount of ten thousand
dollars ($10,000) for bodily injury to, or death of, each person as a
result of any one accident and, subject to that limit as to one
person, the amount of twenty thousand dollars ($20,000) for bodily
injury to, or death of all persons as a result of any one accident,
and the amount of three thousand dollars ($3,000) for damage to
property of others as a result of any one accident.
(b) The coverage required by Section 11580.2 shall be made
available to the consumer. However, an insurer may charge a premium
for that coverage in addition to the premium set forth in Section
11629.72. Notwithstanding the coverage amounts required by Section
11580.2 and Section 16056 of the Vehicle Code, uninsured motorist
coverage issued in conjunction with a low-cost automobile policy
under the program, with coverage limits at least equal to the limits
of liability in the underlying low-cost automobile policy, shall
satisfy the requirements of Section 11580.2 and the financial
responsibility requirements of Sections 4000.37, 16021, and 16431 of
the Vehicle Code.
(c) Medical payments coverage shall be made available to the
consumer. However, an insurer may charge a premium for that coverage
in addition to the premium set forth in Section 11629.72.
(d) The policy shall have an initial term of one year, renewable
on an annual basis thereafter.
(e) The policy shall cover the person named in the policy, and to
the same extent that insurance is provided to the named insured, any
other person using the automobile, provided the use is with his or
her permission, express or implied, and within the scope of that
permission, except that the policy shall not cover members of the
named insured's household who do not satisfy the requirements of
subdivisions (b) to (e), inclusive, of Section 11629.73.
(f) The policy shall provide coverage for an automobile with a
value, at the time of purchase by the insured, of twenty thousand
dollars ($20,000) or less, as evidenced by the value given to the
automobile by the Department of Motor Vehicles in assessing vehicle
license fees.
11629.72. (a) Effective March 1, 2003, the annual rate offered
under the program for the low-cost automobile policy, unless and
until the time that the rate is adjusted, shall be three hundred
forty-seven dollars ($347) per covered vehicle for the County of Los
Angeles and three hundred fourteen dollars ($314) per covered vehicle
for the City and County of San Francisco, unless the commissioner
establishes that rate or a different rate prior to that time. The
annual rate offered initially under the program for each of the
Counties of Alameda, Fresno, Orange, Riverside, San Bernardino, and
San Diego shall be established by the commissioner no later than
April 1, 2006. The annual rate offered initially under the program
for each of the other counties in California shall be established at
a date according to the discretion of the commissioner. A surcharge,
as a percentage of the base rate, shall be added to the base rate and
that percentage shall be set at the discretion of the commissioner,
if the named insured is an unmarried male between the ages of 19 and
24, inclusive, or if an unmarried male between the ages of 19 and 24,
inclusive, resides in the household of the named insured and will be
a driver of the automobile covered under the low-cost policy.
(b) In addition to existing premium installment options offered by
the California Automobile Assigned Risk Plan under Article 4
(commencing with Section 11620), the plan shall also make available
to an insured under the program a premium installment option pursuant
to which an insured is required to pay not more than 15 percent of
the total policy cost upon issuance of the low-cost policy, followed
thereafter by six other payments. No other premium financing
arrangement shall be permitted.
(c) Rates for policies issued under the program in each county or
city and county shall be reviewed and revised as follows:
(1) Rates shall be sufficient to cover (A) losses incurred under
policies issued under the program, and (B) expenses, including, but
not limited to, all reasonable and necessary expenses such as the
costs of administration, underwriting, taxes, commissions, and claims
adjusting, that are incurred due to participation in the program.
For purposes of this paragraph, "losses incurred" means claims paid,
claims incurred and reported, and claims incurred but not yet
reported. In assessing loss reserves, the commissioner shall only
allow loss reserves that are estimated from actual losses in the
program or comparable data by a licensed statistical agent, as
adjusted to reflect coverage provided under the program.
(2) Rates shall be set so as to result in no projected subsidy of
the program by those policyholders of insurers issuing policies under
the program who are not participants in the program.
(3) Rates shall be set with respect to the program so as to result
in no projected subsidy by policyholders in one county of
policyholders in any of the other counties.
(4) Commencing on January 1, 2001, and annually thereafter, the
California Automobile Assigned Risk Plan shall submit the loss and
expense data, together with a proposed rate and the surcharge
authorized by subdivision (a) for the low-cost automobile policy for
the program, to the commissioner for approval in accordance with this
chapter. The commissioner shall act on the recommendation within 90
days.
11629.73. A low-cost automobile insurance policy under the program
shall only be available for purchase by persons who satisfy the
following eligibility requirements:
(a) The person shall be in a household with a gross annual
household income that does not exceed 250 percent of the federal
poverty level, as defined in Part 6.2 (commencing with Section 12693)
or as defined in an equivalent manner that is approved by the
commissioner.
(b) The person shall be no less than 19 years of age and have been
continuously licensed to drive an automobile for the previous three
years.
(c) The person shall have not more than one of either, but not
both, of the following within the previous three years:
(1) A property damage only accident in which the driver was
principally at fault.
(2) A point for a moving violation.
(d) The person shall not have on record within the previous three
years, an at-fault accident involving bodily injury or death.
(e) The person shall not have a felony or misdemeanor conviction
for a violation of the Vehicle Code on his or her motor vehicle
record.
(f) The person shall not be a college student claimed as a
dependent of another person for federal or state income tax purposes.
11629.731. A person who meets the requirements of subdivision (a)
of Section 11629.73, and who claims that he or she meets the
requirements of subdivisions (b) to (e), inclusive, of Section
11629.73 based entirely or partially on a driver's license and
driving experience obtained other than in the United States or
Canada, shall be entitled to a rebuttable presumption that he or she
is qualified to purchase a low-cost automobile insurance policy under
the program if he or she has been licensed to drive pursuant to a
license obtained in the United States or Canada for at least the
previous 18 months and meets the criteria of subdivisions (b) to (e),
inclusive, for that period.
11629.74. (a) Application may be made through any producer
certified by the plan. The applicant, in order to demonstrate
financial eligibility to purchase a low-cost automobile insurance
policy under the program, shall present at the time of applying for
the policy, a copy of the applicant's federal or state income tax
return for the previous year or other reliable evidence from a
governmental agency or governmental means-tested program of the
applicant's gross annual household income, pursuant to regulations
issued under subdivision (b) of Section 11629.79.
(b) The applicant shall certify that the representations made in
the documents submitted as proof of financial eligibility and in the
application for the policy are true, correct, and contain no material
misrepresentations or omissions of fact to the best knowledge and
belief of the applicant.
(c) The certified producer shall forward the application,
supporting documents, and the applicant's certification to the
California Automobile Assigned Risk Plan.
11629.745. (a) An agent or broker (hereafter referred to as a
producer) who conducts business in a county in which a low-cost
automobile insurance policy is available pursuant to this article
shall inform every new prospective automobile insurance policyholder
who requests a minimum limits or basic limits insurance policy, or
coverage to meet California's minimum limits automobile insurance
requirements, that the low-cost automobile insurance policy may be
available for qualifying motorists. The information may be provided
verbally if the producer has been contacted by telephone, or in
writing, but shall be communicated to the policyholder prior to the
application for automobile insurance coverage in the language in
which the producer has otherwise communicated with the consumer.
(b) If the consumer requests more information about the low-cost
program the producer shall do either of the following:
(1) If the producer is California Automobile Assigned Risk Plan
certified, provide the consumer with an explanation in an information
pamphlet produced by the California Automobile Assigned Risk Plan
and approved and provided by the Department of Insurance of the
qualifications, cost and coverage provided by the policy. If the
consumer qualifies for the low-cost policy and wishes to purchase the
policy, the California Automobile Assigned Risk Plan certified
producer shall provide the application and, upon completion, submit
the application, supporting documents, and the applicant's
certification to the California Automobile Assigned Risk Plan. The
submittal of the California Automobile Assigned Risk Plan application
may be in addition to any other coverage offered or applied for
through the producer.
(2) If the producer is not California Automobile Assigned Risk
Plan certified, the producer shall provide the consumer with the
toll-free telephone number for the California Automobile Assigned
Risk Plan as an option to coverage offered by the producer.
11629.75. (a) A certified producer shall provide to an applicant
for a low-cost automobile insurance policy under this article a
notice relating to coverage under the policy. The notice shall be
provided in a separate document at the time of application, and
include the following statement in 14-point boldface type:
"NOTICE
INSURANCE COVERAGE PROVIDED IN THE POLICY YOU ARE BUYING CONTAINS
REDUCED LIABILITY COVERAGE FOR PERSONAL INJURIES OR PROPERTY DAMAGE
RESULTING FROM THE OPERATION OF THE INSURED VEHICLE. IF LOSSES FROM
AN AUTOMOBILE ACCIDENT EXCEED THE COVERAGE PROVIDED BY THIS POLICY,
YOU CAN BE HELD PERSONALLY LIABLE AND RESPONSIBLE FOR THOSE LOSSES.
THIS POLICY PROVIDES LIABILITY COVERAGE FOR INJURIES OR DEATH
CAUSED TO OTHER PERSONS IN THE TOTAL AMOUNT OF TEN THOUSAND DOLLARS
($10,000) PER PERSON IN ANY ONE ACCIDENT, AND UP TO A TOTAL AMOUNT OF
TWENTY THOUSAND DOLLARS ($20,000) FOR ALL PERSONS IN ANY ONE
ACCIDENT. THE POLICY ALSO PROVIDES UP TO A TOTAL AMOUNT OF THREE
THOUSAND DOLLARS ($3,000) IN LIABILITY COVERAGE FOR PROPERTY DAMAGE
IN ANY ONE ACCIDENT. IF YOU WANT MORE INSURANCE COVERAGE, YOU MUST
REQUEST A DIFFERENT POLICY.
THIS POLICY ALSO DOES NOT COVER DAMAGE TO YOUR OWN VEHICLE, LOSSES
RESULTING FROM YOUR BODILY INJURY OR DEATH, OR COVERAGE FOR LOSSES
CAUSED BY AN UNINSURED OR UNDERINSURED DRIVER. HOWEVER, THESE OTHER
COVERAGES MAY BE AVAILABLE AT EXTRA COST THROUGH OTHER INSURERS.
THIS POLICY MAY ALSO CONTAIN UNINSURED MOTORIST BODILY INJURY
COVERAGE IN THE TOTAL AMOUNT OF TEN THOUSAND DOLLARS ($10,000) PER
PERSON IN ANY ONE ACCIDENT AND UP TO A TOTAL AMOUNT OF TWENTY
THOUSAND DOLLARS ($20,000) FOR ALL PERSONS IN ANY ONE ACCIDENT, IF
YOU SO CHOOSE. IN ADDITION, THIS POLICY MAY ALSO CONTAIN MEDICAL
PAYMENTS COVERAGE IN THE AMOUNT OF ONE THOUSAND DOLLARS ($1,000) PER
PERSON IN ANY ONE ACCIDENT, IF YOU SO CHOOSE.
THIS POLICY DOES NOT COVER ANY OTHER DRIVER IN YOUR HOUSEHOLD WHO:
(a) IS UNDER 19 YEARS OF AGE; OR
(b) HAS LESS THAN 3 YEARS OF CONTINUOUSLY LICENSED DRIVING
EXPERIENCE; OR
(c) HAS MORE THAN ONE OF EITHER, OR BOTH, OF THE FOLLOWING:
--A PROPERTY DAMAGE ONLY ACCIDENT IN WHICH THE DRIVER WAS
PRINCIPALLY AT FAULT.
--A POINT FOR A MOVING VIOLATION; OR
(d) HAS IN THE PREVIOUS 3 YEARS AN AT-FAULT ACCIDENT INVOLVING
BODILY INJURY OR DEATH; OR
(e) HAS A FELONY OR MISDEMEANOR CONVICTION FROM A VIOLATION OF THE
VEHICLE CODE ON HIS OR HER MOTOR VEHICLE RECORD."
(b) When the certified producer establishes delivery of the
disclosure form specified in subdivision (a) by obtaining the
signature of the applicant or insured, there shall be a conclusive
presumption that the certified producer has complied with the
disclosure requirements of this section.
11629.76. (a) For a low-cost automobile insurance policy issued
pursuant to the program, certified producers shall be entitled to the
same commission rate as is paid by the California Automobile
Assigned Risk Plan for private passenger, nonfleet risks under
Article 4 (commencing with Section 11620).
(b) Notwithstanding subdivision (a), the commissioner may at any
time establish a commission for a low-cost automobile insurance
policy issued pursuant to the program and may make the commission
effective on any policy originated within an entire year, or any
portion of a year, as is needed to provide an incentive to certified
producers to sell low-cost automobile insurance to eligible
applicants. The commissioner shall not establish a commission
pursuant to this subdivision if the commissioner determines that
setting the commission rate will result in a lower commission
percentage than would exist pursuant to subdivision (a).
(c) No other fees of any kind may be charged or collected pursuant
to this section and the sale of a low-cost policy under this article
shall not be conditioned on the purchase of any other product or
service.
11629.77. (a) A low-cost automobile insurance policy issued
pursuant to the program shall be canceled only for the following
reasons:
(1) Nonpayment of premium.
(2) Fraud or material misrepresentation affecting the policy or
the insured.
(3) The purchase of additional automobile liability insurance
coverage in violation of subdivision (a) of Section 11629.78.
(4) The purchase or maintenance of automobile liability insurance
coverage other than a low-cost policy for any additional vehicles in
the insured's household, in violation of subdivision (b) of Section
11629.78.
(b) A policy shall be nonrenewed only for the following reasons:
(1) A substantial increase in the hazard insured against.
(2) The insured no longer meets the applicable eligibility
requirements. In this regard, the eligibility of an insured shall be
recertified by the California Automobile Assigned Risk Plan after the
first year of eligibility, and annually thereafter by the insurer
that issued the policy.
11629.78. (a) An insured under the program shall not purchase
automobile liability insurance coverage that is in addition to the
liability coverage provided by the low-cost policy. However, the
insured may purchase any other additional type of automobile
insurance coverage, such as uninsured motorist coverage or collision
coverage outside the plan.
(b) An insured under the program shall not purchase or maintain
any automobile liability insurance coverage other than a low-cost
policy for any additional vehicles in the insured's household.
(c) No more than two low-cost policies per person are permitted.
11629.79. (a) The program for the County of Los Angeles and the
City and County of San Francisco is authorized to commence operations
on January 1, 2000, but shall be fully operational no later than
July 1, 2000.
(b) To this end, the commissioner, in consultation with the
California Automobile Assigned Risk Plan, shall adopt regulations to
implement the provisions of this article within 60 days of its
effective date. The regulations shall be adopted as emergency
regulations in accordance with Chapter 3.5 (commencing with Section
11340) of the Government Code, and for purposes of that chapter, the
adoption of the regulations shall be considered by the Office of
Administrative Law to be necessary for the immediate preservation of
the public peace, health and safety, and general welfare.
(c) The program for the Counties of Alameda, Fresno, Orange,
Riverside, San Bernardino, and San Diego shall commence operations on
April 1, 2006, and shall be made operational in all other counties
of California according to the discretion of the commissioner. The
commissioner, in consultation with the California Automobile Assigned
Risk Plan, shall adopt regulations to implement the expansion of the
program to these counties. The regulations shall be adopted as
emergency regulations in accordance with Chapter 3.5 (commencing with
Section 11340) of the Government Code, and for purposes of that
chapter, the adoption of the regulations shall be considered by the
Office of Administrative Law to be necessary for the immediate
preservation of the public peace, health and safety, and general
welfare.
11629.8. Notwithstanding the coverage amounts required by Section
16056 of the Vehicle Code, a low-cost automobile policy issued under
the program shall satisfy the financial responsibility requirements
of Sections 4000.37, 16021, and 16431 of the Vehicle Code.
11629.81. The California Automobile Assigned Risk Plan shall report
to the Legislature on an annual basis, and at those additional times
as it deems prudent, on the status of the program.
11629.82. Nothing in this article is intended to amend or otherwise
affect or interpret any provision of Proposition 103, approved by
the electors on November 8, 1988, and no provision of that initiative
measure applies to this article.
11629.83. An action challenging the constitutionality of the
establishment of the pilot program by this article shall be commenced
in a court of competent jurisdiction no later than February 1, 2000.
11629.84. This article shall remain in effect only until January 1,
2016, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2016, deletes or extends
that date.
11629.85. (a) On or before March 1 of each year, the commissioner
shall prepare and propose a plan to the Senate Committee on Banking,
Finance, and Insurance and the Assembly Committee on Insurance
setting forth the methods the commissioner intends to implement to
inform households eligible for the program about the availability of
low-cost automobile insurance. To be eligible for funding through the
budget process, the plan shall be reviewed by the Senate Committee
on Banking, Finance, and Insurance and the Assembly Committee on
Insurance. The information required under subdivision (c) shall also
be provided to the Senate Committee on Transportation and Housing and
the Assembly Committee on Transportation.
(b) The plan shall include, at a minimum, a brief description of
methods proposed to be used, anticipated costs, sources of revenue,
goals, targets, objectives, and a justification of the proposed
methods. The plan shall also explain how the department proposes to
work in cooperation with the California Automobile Assigned Risk
Plan, the social service departments in eligible counties, the
Department of Motor Vehicles, and community-based organizations in
order to inform eligible households of the existence of the program.
(c) The plan shall also include all of the following:
(1) The commissioner's determination regarding whether the program
has been successful, based on the criteria specified in subdivision
(d), and an explanation regarding that success or lack thereof.
(2) In cooperation with the California Automobile Assigned Risk
Plan, structural characteristics of the program that may require
statutory revision in order for the program to succeed or to improve
upon existing success.
(3) Impediments to success of the program that can reasonably be
overcome by revision to the strategies adopted by the department.
(4) A detailed explanation of the department's use for the program
of funds assessed pursuant to Section 1872.81.
(5) For the previous calendar year, a list of the total low-cost
auto premium for each county in which the program was available.
(d) The program is successful if the following occur:
(1) The program generated sufficient premiums to cover losses
incurred under policies issued under the program, and expenses
incurred by the program, as calculated pursuant to subdivision (c) of
Section 11629.72.
(2) The program served the public purpose of offering access to
automobile insurance to otherwise underserved communities in the
program areas.
(3) The program offered access to automobile insurance to
previously uninsured motorists seeking affordable coverage in the
program areas.
(4) The program's outreach efforts lead uninsured motorists to
contact a producer, and the driver obtains any auto insurance policy
that complies with California law.
(e) Any written or oral advertisements, including, but not limited
to, paid or unpaid commercial or noncommercial advertising, by the
department with reference to the low-cost automobile insurance
program shall reference the department and shall not reference the
commissioner by name or office, or include the commissioner's voice,
image, or likeness. The department shall not participate with any
nongovernmental entity that produces or intends to produce
advertisements or educational material that include the name of the
commissioner or his or her voice, image, or likeness, and that are
intended to make eligible households aware of the existence of
low-cost automobile insurance.
11629.7. (a) There is established, within the California Automobile
Assigned Risk Plan established under Section 11620, a low-cost
automobile insurance program for all counties in California.
(b) For the purpose of making the low-cost automobile insurance
program operational in all counties of California, pursuant to
subdivision (a), a low-cost automobile insurance program shall
commence operations in the Counties of Alameda, Fresno, Orange,
Riverside, San Bernardino, and San Diego, effective April 1, 2006,
and shall be made operational in all other counties of California
based upon a determination of need made by the commissioner. Program
outreach shall focus primarily on those counties which have the
highest number of uninsured drivers or the highest percentage of
uninsured drivers or the highest percentage of low-income
individuals. In making the determination of need for each county, the
commissioner shall consider each of the following:
(1) The number or percentage of motorists within the county who
are uninsured.
(2) The number or percentage of residents within the county who
are low income.
(3) The availability of affordable automobile insurance options
for the county's low-income residents within the private automobile
insurance marketplace.
(c) (1) After making the initial determination of need, the
commissioner shall, as soon as is practicable, hold a public meeting
in that county.
(2) The public meeting required by paragraph (1) shall be held not
for the consideration of rates, but for the public discussion of the
need and desirability of the program for the consumers of the
county. Within 30 days after the public meeting, the commissioner
shall make public his or her final determination of whether a need
for the program exists within the county. A separate hearing shall be
held for the consideration of rates pursuant to Section 11629.72.
(d) The commissioner, after a public hearing, shall approve or
issue a reasonable plan for the equitable apportionment, among
insurers required to participate in the California Automobile
Assigned Risk Plan established under Section 11620, of persons
residing in the counties or cities and counties set forth in
subdivisions (a) and (b) who are eligible to purchase through the
program established in each county or city and county a low-cost
automobile insurance policy, as described in Section 11629.71. The
program shall be conducted in conjunction with the California
Automobile Assigned Risk Plan established under Section 11620.
11629.71. A low-cost automobile insurance policy for purposes of
the program established under this article shall have all of the
following attributes:
(a) The policy shall offer coverage in the amount of ten thousand
dollars ($10,000) for bodily injury to, or death of, each person as a
result of any one accident and, subject to that limit as to one
person, the amount of twenty thousand dollars ($20,000) for bodily
injury to, or death of all persons as a result of any one accident,
and the amount of three thousand dollars ($3,000) for damage to
property of others as a result of any one accident.
(b) The coverage required by Section 11580.2 shall be made
available to the consumer. However, an insurer may charge a premium
for that coverage in addition to the premium set forth in Section
11629.72. Notwithstanding the coverage amounts required by Section
11580.2 and Section 16056 of the Vehicle Code, uninsured motorist
coverage issued in conjunction with a low-cost automobile policy
under the program, with coverage limits at least equal to the limits
of liability in the underlying low-cost automobile policy, shall
satisfy the requirements of Section 11580.2 and the financial
responsibility requirements of Sections 4000.37, 16021, and 16431 of
the Vehicle Code.
(c) Medical payments coverage shall be made available to the
consumer. However, an insurer may charge a premium for that coverage
in addition to the premium set forth in Section 11629.72.
(d) The policy shall have an initial term of one year, renewable
on an annual basis thereafter.
(e) The policy shall cover the person named in the policy, and to
the same extent that insurance is provided to the named insured, any
other person using the automobile, provided the use is with his or
her permission, express or implied, and within the scope of that
permission, except that the policy shall not cover members of the
named insured's household who do not satisfy the requirements of
subdivisions (b) to (e), inclusive, of Section 11629.73.
(f) The policy shall provide coverage for an automobile with a
value, at the time of purchase by the insured, of twenty thousand
dollars ($20,000) or less, as evidenced by the value given to the
automobile by the Department of Motor Vehicles in assessing vehicle
license fees.
11629.72. (a) Effective March 1, 2003, the annual rate offered
under the program for the low-cost automobile policy, unless and
until the time that the rate is adjusted, shall be three hundred
forty-seven dollars ($347) per covered vehicle for the County of Los
Angeles and three hundred fourteen dollars ($314) per covered vehicle
for the City and County of San Francisco, unless the commissioner
establishes that rate or a different rate prior to that time. The
annual rate offered initially under the program for each of the
Counties of Alameda, Fresno, Orange, Riverside, San Bernardino, and
San Diego shall be established by the commissioner no later than
April 1, 2006. The annual rate offered initially under the program
for each of the other counties in California shall be established at
a date according to the discretion of the commissioner. A surcharge,
as a percentage of the base rate, shall be added to the base rate and
that percentage shall be set at the discretion of the commissioner,
if the named insured is an unmarried male between the ages of 19 and
24, inclusive, or if an unmarried male between the ages of 19 and 24,
inclusive, resides in the household of the named insured and will be
a driver of the automobile covered under the low-cost policy.
(b) In addition to existing premium installment options offered by
the California Automobile Assigned Risk Plan under Article 4
(commencing with Section 11620), the plan shall also make available
to an insured under the program a premium installment option pursuant
to which an insured is required to pay not more than 15 percent of
the total policy cost upon issuance of the low-cost policy, followed
thereafter by six other payments. No other premium financing
arrangement shall be permitted.
(c) Rates for policies issued under the program in each county or
city and county shall be reviewed and revised as follows:
(1) Rates shall be sufficient to cover (A) losses incurred under
policies issued under the program, and (B) expenses, including, but
not limited to, all reasonable and necessary expenses such as the
costs of administration, underwriting, taxes, commissions, and claims
adjusting, that are incurred due to participation in the program.
For purposes of this paragraph, "losses incurred" means claims paid,
claims incurred and reported, and claims incurred but not yet
reported. In assessing loss reserves, the commissioner shall only
allow loss reserves that are estimated from actual losses in the
program or comparable data by a licensed statistical agent, as
adjusted to reflect coverage provided under the program.
(2) Rates shall be set so as to result in no projected subsidy of
the program by those policyholders of insurers issuing policies under
the program who are not participants in the program.
(3) Rates shall be set with respect to the program so as to result
in no projected subsidy by policyholders in one county of
policyholders in any of the other counties.
(4) Commencing on January 1, 2001, and annually thereafter, the
California Automobile Assigned Risk Plan shall submit the loss and
expense data, together with a proposed rate and the surcharge
authorized by subdivision (a) for the low-cost automobile policy for
the program, to the commissioner for approval in accordance with this
chapter. The commissioner shall act on the recommendation within 90
days.
11629.73. A low-cost automobile insurance policy under the program
shall only be available for purchase by persons who satisfy the
following eligibility requirements:
(a) The person shall be in a household with a gross annual
household income that does not exceed 250 percent of the federal
poverty level, as defined in Part 6.2 (commencing with Section 12693)
or as defined in an equivalent manner that is approved by the
commissioner.
(b) The person shall be no less than 19 years of age and have been
continuously licensed to drive an automobile for the previous three
years.
(c) The person shall have not more than one of either, but not
both, of the following within the previous three years:
(1) A property damage only accident in which the driver was
principally at fault.
(2) A point for a moving violation.
(d) The person shall not have on record within the previous three
years, an at-fault accident involving bodily injury or death.
(e) The person shall not have a felony or misdemeanor conviction
for a violation of the Vehicle Code on his or her motor vehicle
record.
(f) The person shall not be a college student claimed as a
dependent of another person for federal or state income tax purposes.
11629.731. A person who meets the requirements of subdivision (a)
of Section 11629.73, and who claims that he or she meets the
requirements of subdivisions (b) to (e), inclusive, of Section
11629.73 based entirely or partially on a driver's license and
driving experience obtained other than in the United States or
Canada, shall be entitled to a rebuttable presumption that he or she
is qualified to purchase a low-cost automobile insurance policy under
the program if he or she has been licensed to drive pursuant to a
license obtained in the United States or Canada for at least the
previous 18 months and meets the criteria of subdivisions (b) to (e),
inclusive, for that period.
11629.74. (a) Application may be made through any producer
certified by the plan. The applicant, in order to demonstrate
financial eligibility to purchase a low-cost automobile insurance
policy under the program, shall present at the time of applying for
the policy, a copy of the applicant's federal or state income tax
return for the previous year or other reliable evidence from a
governmental agency or governmental means-tested program of the
applicant's gross annual household income, pursuant to regulations
issued under subdivision (b) of Section 11629.79.
(b) The applicant shall certify that the representations made in
the documents submitted as proof of financial eligibility and in the
application for the policy are true, correct, and contain no material
misrepresentations or omissions of fact to the best knowledge and
belief of the applicant.
(c) The certified producer shall forward the application,
supporting documents, and the applicant's certification to the
California Automobile Assigned Risk Plan.
11629.745. (a) An agent or broker (hereafter referred to as a
producer) who conducts business in a county in which a low-cost
automobile insurance policy is available pursuant to this article
shall inform every new prospective automobile insurance policyholder
who requests a minimum limits or basic limits insurance policy, or
coverage to meet California's minimum limits automobile insurance
requirements, that the low-cost automobile insurance policy may be
available for qualifying motorists. The information may be provided
verbally if the producer has been contacted by telephone, or in
writing, but shall be communicated to the policyholder prior to the
application for automobile insurance coverage in the language in
which the producer has otherwise communicated with the consumer.
(b) If the consumer requests more information about the low-cost
program the producer shall do either of the following:
(1) If the producer is California Automobile Assigned Risk Plan
certified, provide the consumer with an explanation in an information
pamphlet produced by the California Automobile Assigned Risk Plan
and approved and provided by the Department of Insurance of the
qualifications, cost and coverage provided by the policy. If the
consumer qualifies for the low-cost policy and wishes to purchase the
policy, the California Automobile Assigned Risk Plan certified
producer shall provide the application and, upon completion, submit
the application, supporting documents, and the applicant's
certification to the California Automobile Assigned Risk Plan. The
submittal of the California Automobile Assigned Risk Plan application
may be in addition to any other coverage offered or applied for
through the producer.
(2) If the producer is not California Automobile Assigned Risk
Plan certified, the producer shall provide the consumer with the
toll-free telephone number for the California Automobile Assigned
Risk Plan as an option to coverage offered by the producer.
11629.75. (a) A certified producer shall provide to an applicant
for a low-cost automobile insurance policy under this article a
notice relating to coverage under the policy. The notice shall be
provided in a separate document at the time of application, and
include the following statement in 14-point boldface type:
"NOTICE
INSURANCE COVERAGE PROVIDED IN THE POLICY YOU ARE BUYING CONTAINS
REDUCED LIABILITY COVERAGE FOR PERSONAL INJURIES OR PROPERTY DAMAGE
RESULTING FROM THE OPERATION OF THE INSURED VEHICLE. IF LOSSES FROM
AN AUTOMOBILE ACCIDENT EXCEED THE COVERAGE PROVIDED BY THIS POLICY,
YOU CAN BE HELD PERSONALLY LIABLE AND RESPONSIBLE FOR THOSE LOSSES.
THIS POLICY PROVIDES LIABILITY COVERAGE FOR INJURIES OR DEATH
CAUSED TO OTHER PERSONS IN THE TOTAL AMOUNT OF TEN THOUSAND DOLLARS
($10,000) PER PERSON IN ANY ONE ACCIDENT, AND UP TO A TOTAL AMOUNT OF
TWENTY THOUSAND DOLLARS ($20,000) FOR ALL PERSONS IN ANY ONE
ACCIDENT. THE POLICY ALSO PROVIDES UP TO A TOTAL AMOUNT OF THREE
THOUSAND DOLLARS ($3,000) IN LIABILITY COVERAGE FOR PROPERTY DAMAGE
IN ANY ONE ACCIDENT. IF YOU WANT MORE INSURANCE COVERAGE, YOU MUST
REQUEST A DIFFERENT POLICY.
THIS POLICY ALSO DOES NOT COVER DAMAGE TO YOUR OWN VEHICLE, LOSSES
RESULTING FROM YOUR BODILY INJURY OR DEATH, OR COVERAGE FOR LOSSES
CAUSED BY AN UNINSURED OR UNDERINSURED DRIVER. HOWEVER, THESE OTHER
COVERAGES MAY BE AVAILABLE AT EXTRA COST THROUGH OTHER INSURERS.
THIS POLICY MAY ALSO CONTAIN UNINSURED MOTORIST BODILY INJURY
COVERAGE IN THE TOTAL AMOUNT OF TEN THOUSAND DOLLARS ($10,000) PER
PERSON IN ANY ONE ACCIDENT AND UP TO A TOTAL AMOUNT OF TWENTY
THOUSAND DOLLARS ($20,000) FOR ALL PERSONS IN ANY ONE ACCIDENT, IF
YOU SO CHOOSE. IN ADDITION, THIS POLICY MAY ALSO CONTAIN MEDICAL
PAYMENTS COVERAGE IN THE AMOUNT OF ONE THOUSAND DOLLARS ($1,000) PER
PERSON IN ANY ONE ACCIDENT, IF YOU SO CHOOSE.
THIS POLICY DOES NOT COVER ANY OTHER DRIVER IN YOUR HOUSEHOLD WHO:
(a) IS UNDER 19 YEARS OF AGE; OR
(b) HAS LESS THAN 3 YEARS OF CONTINUOUSLY LICENSED DRIVING
EXPERIENCE; OR
(c) HAS MORE THAN ONE OF EITHER, OR BOTH, OF THE FOLLOWING:
--A PROPERTY DAMAGE ONLY ACCIDENT IN WHICH THE DRIVER WAS
PRINCIPALLY AT FAULT.
--A POINT FOR A MOVING VIOLATION; OR
(d) HAS IN THE PREVIOUS 3 YEARS AN AT-FAULT ACCIDENT INVOLVING
BODILY INJURY OR DEATH; OR
(e) HAS A FELONY OR MISDEMEANOR CONVICTION FROM A VIOLATION OF THE
VEHICLE CODE ON HIS OR HER MOTOR VEHICLE RECORD."
(b) When the certified producer establishes delivery of the
disclosure form specified in subdivision (a) by obtaining the
signature of the applicant or insured, there shall be a conclusive
presumption that the certified producer has complied with the
disclosure requirements of this section.
11629.76. (a) For a low-cost automobile insurance policy issued
pursuant to the program, certified producers shall be entitled to the
same commission rate as is paid by the California Automobile
Assigned Risk Plan for private passenger, nonfleet risks under
Article 4 (commencing with Section 11620).
(b) Notwithstanding subdivision (a), the commissioner may at any
time establish a commission for a low-cost automobile insurance
policy issued pursuant to the program and may make the commission
effective on any policy originated within an entire year, or any
portion of a year, as is needed to provide an incentive to certified
producers to sell low-cost automobile insurance to eligible
applicants. The commissioner shall not establish a commission
pursuant to this subdivision if the commissioner determines that
setting the commission rate will result in a lower commission
percentage than would exist pursuant to subdivision (a).
(c) No other fees of any kind may be charged or collected pursuant
to this section and the sale of a low-cost policy under this article
shall not be conditioned on the purchase of any other product or
service.
11629.77. (a) A low-cost automobile insurance policy issued
pursuant to the program shall be canceled only for the following
reasons:
(1) Nonpayment of premium.
(2) Fraud or material misrepresentation affecting the policy or
the insured.
(3) The purchase of additional automobile liability insurance
coverage in violation of subdivision (a) of Section 11629.78.
(4) The purchase or maintenance of automobile liability insurance
coverage other than a low-cost policy for any additional vehicles in
the insured's household, in violation of subdivision (b) of Section
11629.78.
(b) A policy shall be nonrenewed only for the following reasons:
(1) A substantial increase in the hazard insured against.
(2) The insured no longer meets the applicable eligibility
requirements. In this regard, the eligibility of an insured shall be
recertified by the California Automobile Assigned Risk Plan after the
first year of eligibility, and annually thereafter by the insurer
that issued the policy.
11629.78. (a) An insured under the program shall not purchase
automobile liability insurance coverage that is in addition to the
liability coverage provided by the low-cost policy. However, the
insured may purchase any other additional type of automobile
insurance coverage, such as uninsured motorist coverage or collision
coverage outside the plan.
(b) An insured under the program shall not purchase or maintain
any automobile liability insurance coverage other than a low-cost
policy for any additional vehicles in the insured's household.
(c) No more than two low-cost policies per person are permitted.
11629.79. (a) The program for the County of Los Angeles and the
City and County of San Francisco is authorized to commence operations
on January 1, 2000, but shall be fully operational no later than
July 1, 2000.
(b) To this end, the commissioner, in consultation with the
California Automobile Assigned Risk Plan, shall adopt regulations to
implement the provisions of this article within 60 days of its
effective date. The regulations shall be adopted as emergency
regulations in accordance with Chapter 3.5 (commencing with Section
11340) of the Government Code, and for purposes of that chapter, the
adoption of the regulations shall be considered by the Office of
Administrative Law to be necessary for the immediate preservation of
the public peace, health and safety, and general welfare.
(c) The program for the Counties of Alameda, Fresno, Orange,
Riverside, San Bernardino, and San Diego shall commence operations on
April 1, 2006, and shall be made operational in all other counties
of California according to the discretion of the commissioner. The
commissioner, in consultation with the California Automobile Assigned
Risk Plan, shall adopt regulations to implement the expansion of the
program to these counties. The regulations shall be adopted as
emergency regulations in accordance with Chapter 3.5 (commencing with
Section 11340) of the Government Code, and for purposes of that
chapter, the adoption of the regulations shall be considered by the
Office of Administrative Law to be necessary for the immediate
preservation of the public peace, health and safety, and general
welfare.
11629.8. Notwithstanding the coverage amounts required by Section
16056 of the Vehicle Code, a low-cost automobile policy issued under
the program shall satisfy the financial responsibility requirements
of Sections 4000.37, 16021, and 16431 of the Vehicle Code.
11629.81. The California Automobile Assigned Risk Plan shall report
to the Legislature on an annual basis, and at those additional times
as it deems prudent, on the status of the program.
11629.82. Nothing in this article is intended to amend or otherwise
affect or interpret any provision of Proposition 103, approved by
the electors on November 8, 1988, and no provision of that initiative
measure applies to this article.
11629.83. An action challenging the constitutionality of the
establishment of the pilot program by this article shall be commenced
in a court of competent jurisdiction no later than February 1, 2000.
11629.84. This article shall remain in effect only until January 1,
2016, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2016, deletes or extends
that date.
11629.85. (a) On or before March 1 of each year, the commissioner
shall prepare and propose a plan to the Senate Committee on Banking,
Finance, and Insurance and the Assembly Committee on Insurance
setting forth the methods the commissioner intends to implement to
inform households eligible for the program about the availability of
low-cost automobile insurance. To be eligible for funding through the
budget process, the plan shall be reviewed by the Senate Committee
on Banking, Finance, and Insurance and the Assembly Committee on
Insurance. The information required under subdivision (c) shall also
be provided to the Senate Committee on Transportation and Housing and
the Assembly Committee on Transportation.
(b) The plan shall include, at a minimum, a brief description of
methods proposed to be used, anticipated costs, sources of revenue,
goals, targets, objectives, and a justification of the proposed
methods. The plan shall also explain how the department proposes to
work in cooperation with the California Automobile Assigned Risk
Plan, the social service departments in eligible counties, the
Department of Motor Vehicles, and community-based organizations in
order to inform eligible households of the existence of the program.
(c) The plan shall also include all of the following:
(1) The commissioner's determination regarding whether the program
has been successful, based on the criteria specified in subdivision
(d), and an explanation regarding that success or lack thereof.
(2) In cooperation with the California Automobile Assigned Risk
Plan, structural characteristics of the program that may require
statutory revision in order for the program to succeed or to improve
upon existing success.
(3) Impediments to success of the program that can reasonably be
overcome by revision to the strategies adopted by the department.
(4) A detailed explanation of the department's use for the program
of funds assessed pursuant to Section 1872.81.
(5) For the previous calendar year, a list of the total low-cost
auto premium for each county in which the program was available.
(d) The program is successful if the following occur:
(1) The program generated sufficient premiums to cover losses
incurred under policies issued under the program, and expenses
incurred by the program, as calculated pursuant to subdivision (c) of
Section 11629.72.
(2) The program served the public purpose of offering access to
automobile insurance to otherwise underserved communities in the
program areas.
(3) The program offered access to automobile insurance to
previously uninsured motorists seeking affordable coverage in the
program areas.
(4) The program's outreach efforts lead uninsured motorists to
contact a producer, and the driver obtains any auto insurance policy
that complies with California law.
(e) Any written or oral advertisements, including, but not limited
to, paid or unpaid commercial or noncommercial advertising, by the
department with reference to the low-cost automobile insurance
program shall reference the department and shall not reference the
commissioner by name or office, or include the commissioner's voice,
image, or likeness. The department shall not participate with any
nongovernmental entity that produces or intends to produce
advertisements or educational material that include the name of the
commissioner or his or her voice, image, or likeness, and that are
intended to make eligible households aware of the existence of
low-cost automobile insurance.
