791. The purpose of this article is to establish standards for the
collection, use and disclosure of information gathered in connection
with insurance transactions by insurance institutions, agents or
insurance-support organizations; to maintain a balance between the
need for information by those conducting the business of insurance
and the public's need for fairness in insurance information
practices, including the need to minimize intrusiveness; to establish
a regulatory mechanism to enable natural persons to ascertain what
information is being or has been collected about them in connection
with insurance transactions and to have access to such information
for the purpose of verifying or disputing its accuracy; to limit the
disclosure of information collected in connection with insurance
transactions; and to enable insurance applicants and policyholders to
obtain the reasons for any adverse underwriting decision.
791.01. (a) The obligations imposed by this article shall apply to
those insurance institutions, agents or insurance-support
organizations which, on or after October 1, 1981:
(1) In the case of life or disability insurance:
(A) Collect, receive or maintain information in connection with
insurance transactions which pertains to natural persons who are
residents of this state, or
(B) Engage in insurance transactions with applicants, individuals
or policyholders who are residents of this state.
(2) In the case of property or casualty insurance:
(A) Collect, receive or maintain information in connection with
insurance transactions involving policies, contracts or certificates
of insurance delivered, issued for delivery or renewed in this state,
or
(B) Engage in insurance transactions involving policies, contracts
or certificates of insurance delivered, issued for delivery or
renewed in this state.
(b) The rights granted by this article shall extend to:
(1) In the case of life or disability insurance, the following
persons who are residents of this state:
(A) Natural persons who are the subject of information collected,
received or maintained in connection with insurance transactions.
(B) Applicants, individuals or policyholders who engage in or seek
to engage in insurance transactions.
(2) In the case of property or casualty insurance, the following
persons:
(A) Natural persons who are the subject of information collected,
received or maintained in connection with insurance transactions
involving policies, contracts or certificates of insurance delivered,
issued for delivery or renewed in this state, and
(B) Applicants, individuals or policyholders who engage in or seek
to engage in insurance transactions involving policies, contracts or
certificates of insurance delivered, issued for delivery or renewed
in this state.
(c) For purposes of this section, a person shall be considered a
resident of this state if the person's last known mailing address, as
shown in the records of the insurance institution, agent, or
insurance-support organization, is located in this state.
(d) This article shall not apply to any person or entity engaged
in the business of title insurance as defined in Section 12340.3.
(e) This article shall not apply to a person or entity engaged in
the business of a home protection company, as defined in Section
12740, which does not obtain or maintain personal information, as
defined in this article, of its policyholders and applicants.
(f) Insurance institutions, agents, insurance support
organizations or any insurance transaction subject to this article
shall be exempt from Part 2.6 (commencing with Section 56) of
Division 1 of, and Sections 1785.20 and 1786.40 of, the Civil Code.
791.02. As used in this act:
(a) (1) "Adverse underwriting decision" means any of the following
actions with respect to insurance transactions involving insurance
coverage that is individually underwritten:
(A) A declination of insurance coverage.
(B) A termination of insurance coverage.
(C) Failure of an agent to apply for insurance coverage with a
specific insurance institution that the agent represents and that is
requested by an applicant.
(D) In the case of a property or casualty insurance coverage:
(i) Placement by an insurance institution or agent of a risk with
a residual market mechanism, with an unauthorized insurer, or with an
insurance institution that provides insurance to other than
preferred or standard risks, if in fact the placement is at other
than a preferred or standard rate. An adverse underwriting decision,
in case of placement with an insurance institution that provides
insurance to other than preferred or standard risks, shall not
include placement if the applicant or insured did not specify or
apply for placement as a preferred or standard risk or placement with
a particular company insuring preferred or standard risks, or
(ii) The charging of a higher rate on the basis of information
which differs from that which the applicant or policyholder
furnished.
(E) In the case of a life, health, or disability insurance
coverage, an offer to insure at higher than standard rates.
(2) Notwithstanding paragraph (1), any of the following actions
shall not be considered adverse underwriting decisions but the
insurance institution or agent responsible for their occurrence shall
nevertheless provide the applicant or policyholder with the specific
reason or reasons for their occurrence:
(A) The termination of an individual policy form on a class or
statewide basis.
(B) A declination of insurance coverage solely because coverage is
not available on a class or statewide basis.
(C) The rescission of a policy.
(b) "Affiliate" or "affiliated" means a person that directly, or
indirectly through one or more intermediaries, controls, is
controlled by or is under common control with another person.
(c) "Agent" means any person licensed pursuant to Chapter 5
(commencing with Section 1621), Chapter 5A (commencing with Section
1759), Chapter 6 (commencing with Section 1760), Chapter 7
(commencing with Section 1800), or Chapter 8 (commencing with Section
1831).
(d) "Applicant" means any person who seeks to contract for
insurance coverage other than a person seeking group insurance that
is not individually underwritten.
(e) "Consumer report" means any written, oral, or other
communication of information bearing on a natural person's
creditworthiness, credit standing, credit capacity, character,
general reputation, personal characteristics, or mode of living that
is used or expected to be used in connection with an insurance
transaction.
(f) "Consumer reporting agency" means any person who:
(1) Regularly engages, in whole or in part, in the practice of
assembling or preparing consumer reports for a monetary fee.
(2) Obtains information primarily from sources other than
insurance institutions.
(3) Furnishes consumer reports to other persons.
(g) "Control," including the terms "controlled by" or "under
common control with," means the possession, direct or indirect, of
the power to direct or cause the direction of the management and
policies of a person, whether through the ownership of voting
securities, by contract other than a commercial contract for goods or
nonmanagement services, or otherwise, unless the power is the result
of an official position with or corporate office held by the person.
(h) "Declination of insurance coverage" means a denial, in whole
or in part, by an insurance institution or agent of requested
insurance coverage.
(i) "Individual" means any natural person who is any of the
following:
(1) In the case of property or casualty insurance, is a past,
present, or proposed named insured or certificate holder.
(2) In the case of life or disability insurance, is a past,
present, or proposed principal insured or certificate holder.
(3) Is a past, present, or proposed policyowner.
(4) Is a past or present applicant.
(5) Is a past or present claimant.
(6) Derived, derives, or is proposed to derive insurance coverage
under an insurance policy or certificate subject to this act.
(j) "Institutional source" means any person or governmental entity
that provides information about an individual to an agent, insurance
institution, or insurance-support organization, other than any of
the following:
(1) An agent.
(2) The individual who is the subject of the information.
(3) A natural person acting in a personal capacity rather than in
a business or professional capacity.
(k) "Insurance institution" means any corporation, association,
partnership, reciprocal exchange, interinsurer, Lloyd's insurer,
fraternal benefit society, or other person engaged in the business of
insurance. "Insurance institution" shall not include agents,
insurance-support organizations, or health care service plans
regulated pursuant to the Knox-Keene Health Care Service Plan Act,
Chapter 2.2 (commencing with Section 1340) of Division 2 of the
Health and Safety Code.
(l) "Insurance-support organization" means:
(1) Any person who regularly engages, in whole or in part, in the
business of assembling or collecting information about natural
persons for the primary purpose of providing the information to an
insurance institution or agent for insurance transactions, including
either of the following:
(A) The furnishing of consumer reports or investigative consumer
reports to an insurance institution or agent for use in connection
with an insurance transaction.
(B) The collection of personal information from insurance
institutions, agents, or other insurance-support organizations for
the purpose of detecting or preventing fraud, material
misrepresentation or material nondisclosure in connection with
insurance underwriting or insurance claim activity.
(2) Notwithstanding paragraph (1), the following persons shall not
be considered "insurance-support organizations": agents,
governmental institutions, insurance institutions, medical care
institutions, medical professionals, and peer review committees.
(m) "Insurance transaction" means any transaction involving
insurance primarily for personal, family, or household needs rather
than business or professional needs that entails either of the
following:
(1) The determination of an individual's eligibility for an
insurance coverage, benefit, or payment.
(2) The servicing of an insurance application, policy, contract,
or certificate.
(n) "Investigative consumer report" means a consumer report or
portion thereof in which information about a natural person's
character, general reputation, personal characteristics, or mode of
living is obtained through personal interviews with the person's
neighbors, friends, associates, acquaintances, or others who may have
knowledge concerning those items of information.
(o) "Medical care institution" means any facility or institution
that is licensed to provide health care services to natural persons,
including but not limited to, hospitals, skilled nursing facilities,
home health agencies, medical clinics, rehabilitation agencies, and
public health agencies.
(p) "Medical professional" means any person licensed or certified
to provide health care services to natural persons, including but not
limited to, a physician, dentist, nurse, optometrist, physical or
occupational therapist, psychiatric social worker, clinical
dietitian, clinical psychologist, chiropractor, pharmacist, or speech
therapist.
(q) "Medical record information" means personal information that
is both of the following:
(1) Relates to an individual's physical or mental condition,
medical history or medical treatment.
(2) Is obtained from a medical professional or medical care
institution, from the individual, or from the individual's spouse,
parent, or legal guardian.
(r) "Person" means any natural person, corporation, association,
partnership, limited liability company, or other legal entity.
(s) "Personal information" means any individually identifiable
information gathered in connection with an insurance transaction from
which judgments can be made about an individual's character, habits,
avocations, finances, occupation, general reputation, credit,
health, or any other personal characteristics. "Personal information"
includes an individual's name and address and "medical record
information" but does not include "privileged information."
(t) "Policyholder" means any person who is any of the following:
(1) In the case of individual property or casualty insurance, is a
present named insured.
(2) In the case of individual life or disability insurance, is a
present policyowner.
(3) In the case of group insurance, which is individually
underwritten, is a present group certificate holder.
(u) "Pretext interview" means an interview whereby a person, in an
attempt to obtain information about a natural person, performs one
or more of the following acts:
(1) Pretends to be someone he or she is not.
(2) Pretends to represent a person he or she is not in fact
representing.
(3) Misrepresents the true purpose of the interview.
(4) Refuses to identify himself or herself upon request.
(v) "Privileged information" means any individually identifiable
information that both:
(1) Relates to a claim for insurance benefits or a civil or
criminal proceeding involving an individual.
(2) Is collected in connection with or in reasonable anticipation
of a claim for insurance benefits or civil or criminal proceeding
involving an individual. However, information otherwise meeting the
requirements of this division shall nevertheless be considered
"personal information" under this act if it is disclosed in violation
of Section 791.13.
(w) "Residual market mechanism" means the California FAIR Plan
Association, Chapter 10 (commencing with Section 10101) of Part 1 of
Division 2, and the assigned risk plan, Chapter 1 (commencing with
Section 11550) of Part 3 of Division 2.
(x) "Termination of insurance coverage" or "termination of an
insurance policy" means either a cancellation or nonrenewal of an
insurance policy, in whole or in part, for any reason other than the
failure to pay a premium as required by the policy.
(y) "Unauthorized insurer" means an insurance institution that has
not been granted a certificate of authority by the director to
transact the business of insurance in this state.
(z) "Commissioner" means the Insurance Commissioner.
791.03. No insurance institution, agent or insurance-support
organization shall use or authorize the use of pretext interviews to
obtain information in connection with an insurance transaction;
provided, however, that a pretext interview may be undertaken to
obtain information from a person or institution that does not have a
generally or statutorily recognized privileged relationship with the
person to whom the information relates for the purpose of
investigating a claim where there is a reasonable basis for
suspecting criminal activity, fraud, material misrepresentation or
material nondisclosure in connection with a claim.
791.04. (a) An insurance institution or agent shall provide a
notice of information practices to all applicants or policyholders in
connection with insurance transactions as provided below:
(1) In the case of a written application for insurance, a notice
shall be provided no later than:
(A) At the time of the delivery of the insurance policy or
certificate when personal information is collected only from the
applicant, an insured under the policy, or from public records; or
(B) At the time the collection of personal information is
initiated when personal information is collected from a source other
than the applicant, an insured under the policy, or public records.
(2) In the case of a policy renewal, a notice shall be provided no
later than the policy renewal date or the date upon which policy
renewal is confirmed, except that no notice shall be required in
connection with a policy renewal if either of the following applies:
(A) Personal information is collected only from the policyholder,
an insured under the policy, or from public records.
(B) A notice meeting the requirements of this section has been
given within the previous 24 months.
(3) In the case of a policy reinstatement or change in insurance
benefits, a notice shall be provided no later than the time a request
for a policy reinstatement or change in insurance benefits is
received by the insurance institution, except that no notice shall be
required if personal information is collected only from the
policyholder, an insured under the policy, or from public records or
if a notice meeting the requirements of this section has been given
within the previous 24 months.
(b) The notice required by subdivision (a) shall be in writing and
shall state all of the following:
(1) Whether personal information may be collected from persons
other than the individual or individuals proposed for coverage.
(2) The types of personal information that may be collected and
the types of sources and investigative techniques that may be used to
collect such information.
(3) The types of disclosures identified in subdivisions (b), (c),
(d), (e), (f), (i), (k), (l), and (n) of Section 791.13 and the
circumstances under which the disclosures may be made without prior
authorization, except that only those circumstances need be described
which occur with such frequency as to indicate a general business
practice.
(4) A description of the rights established under Sections 791.08
and 791.09 and the manner in which the rights may be exercised.
(5) That information obtained from a report prepared by an
insurance-support organization may be retained by the
insurance-support organization and disclosed to other persons.
(c) In lieu of the notice prescribed in subdivision (b), the
insurance institution or agent may provide an abbreviated notice
informing the applicant or policyholder of the following:
(1) Personal information may be collected from persons other than
the individual or individuals proposed for coverage.
(2) Such information as well as other personal or privileged
information subsequently collected by the insurance institution or
agent may in certain circumstances be disclosed to third parties
without authorization.
(3) A right of access and correction exists with respect to all
personal information collected.
(4) The notice prescribed in subdivision (b) will be furnished to
the applicant or policyholder upon request.
(d) 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.
791.05. An insurance institution or agent shall clearly specify
those questions designed to obtain information solely for marketing
or research purposes from an individual in connection with an
insurance transaction.
791.06. Notwithstanding any other provision of law, no insurance
institution, agent or insurance-support organization may utilize as
its disclosure authorization form in connection with insurance
transactions a form or statement which authorizes the disclosure of
personal or privileged information about an individual to the
insurance institution, agent, or insurance-support organization
unless the form or statement:
(a) Is written in plain language.
(b) Is dated.
(c) Specifies the types of persons authorized to disclose
information about the individual.
(d) Specifies the nature of the information authorized to be
disclosed.
(e) Names the insurance institution or agent and identifies by
generic reference representatives of the insurance institution to
whom the individual is authorizing information to be disclosed.
(f) Specifies the purposes for which the information is collected.
(g) Specifies the length of time the authorization shall remain
valid, which shall be no longer than:
(1) In the case of authorizations signed for the purpose of
collecting information in connection with an application for an
insurance policy, a policy reinstatement or a request for change in
policy benefits:
(A) Thirty months from the date the authorization is signed if the
application or request involves life, health or disability
insurance; or
(B) One year from the date the authorization is signed if the
application or request involves property or casualty insurance.
(2) In the case of authorizations signed for the purpose of
collecting information in connection with a claim for benefits under
an insurance policy:
(A) The term of coverage of the policy if the claim is for a
health insurance benefit; or
(B) The duration of the claim if the claim is not for a health
insurance benefit; or
(C) The duration of all claims processing activity performed in
connection with all claims for benefits made by any person entitled
to benefits under a nonprofit hospital service contract.
(h) Advises the individual or a person authorized to act on behalf
of the individual that the individual or the individual's authorized
representative is entitled to receive a copy of the authorization
form.
(i) This section shall not be construed to require any
authorization for the receipt of personal or privileged information
about an individual.
791.07. (a) No insurance institution, agent or insurance-support
organization may prepare or request an investigative consumer report
about an individual in connection with an insurance transaction
involving an application for insurance, a policy renewal, a policy
reinstatement or a change in insurance benefits unless the insurance
institution or agent informs the individual of the following:
(1) That he or she may request to be interviewed in connection
with the preparation of the investigative consumer report, and
(2) That upon a request pursuant to Section 791.08, he or she is
entitled to receive a copy of the investigative consumer report.
(b) If an investigative consumer report is to be prepared by an
insurance institution or agent, the insurance institution or agent
shall institute reasonable procedures to conduct a personal interview
requested by an individual.
(c) If an investigative consumer report is to be prepared by an
insurance-support organization, the insurance institution or agent
desiring such report shall inform the insurance-support organization
whether a personal interview has been requested by the individual.
The insurance-support organization shall institute reasonable
procedures to conduct such interviews, if requested.
791.08. (a) If any individual, after proper identification, submits
a written request to an insurance institution, agent or
insurance-support organization for access to recorded personal
information about the individual which is reasonably described by the
individual and reasonably locatable and retrievable by the insurance
institution, agent or insurance-support organization, the insurance
institution, agent or insurance-support organization shall within 30
business days from the date such request is received:
(1) Inform the individual of the nature and substance of such
recorded personal information in writing, by telephone or by other
oral communication, whichever the insurance institution, agent or
insurance-support organization prefers;
(2) Permit the individual to see and copy, in person, such
recorded personal information pertaining to him or her or to obtain a
copy of such recorded personal information by mail, whichever the
individual prefers, unless such recorded personal information is in
coded form, in which case an accurate translation in plain language
shall be provided in writing;
(3) Disclose to the individual the identity, if recorded, of those
persons to whom the insurance institution, agent or
insurance-support organization has disclosed such personal
information within two years prior to such request, and if the
identity is not recorded, the names of those insurance institutions,
agents, insurance-support organizations or other persons to whom such
information is normally disclosed; and
(4) Provide the individual with a summary of the procedures by
which he or she may request correction, amendment or deletion of
recorded personal information.
(b) Any personal information provided pursuant to subdivision (a)
above shall identify the source of the information if such source is
an institutional source.
(c) Medical record information supplied by a medical care
institution or medical professional and requested under subdivision
(a), together with the identity of the medical professional or
medical care institution which provided such information, shall be
supplied either directly to the individual 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 section, only with the approval of the qualified professional
person with treatment responsibility for the condition to which the
information relates. If it elects to disclose the information to a
medical professional designated by the individual, the insurance
institution, agent or insurance-support organization shall notify the
individual, at the time of the disclosure, that it has provided the
information to the medical professional.
(d) Except for personal information provided under Section 791.10,
an insurance institution, agent or insurance-support organization
may charge a reasonable fee to cover the costs incurred in providing
a copy of recorded personal information to individuals.
(e) 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. With respect to
the copying and disclosure of recorded personal information pursuant
to a request under subdivision (a), an insurance institution, agent
or insurance-support organization may make arrangements with an
insurance-support organization or a consumer reporting agency to copy
and disclose recorded personal information on its behalf.
(f) The rights granted to individuals in this section shall extend
to all natural persons to the extent information about them is
collected and maintained by an insurance institution, agent or
insurance-support organization in connection with an insurance
transaction. The rights granted to all natural persons by this
subdivision shall not extend to information about them that relates
to and is collected in connection with or in reasonable anticipation
of a claim or civil or criminal proceeding involving them.
(g) For purposes of this section, the term "insurance-support
organization" does not include "consumer reporting agency".
791.09. (a) Within 30 business days from the date of receipt of a
written request from an individual to correct, amend or delete any
recorded personal information about the individual within its
possession, an insurance institution, agent or insurance-support
organization shall either:
(1) Correct, amend or delete the portion of the recorded personal
information in dispute; or
(2) Notify the individual of:
(A) Its refusal to make such correction, amendment or deletion.
(B) The reasons for the refusal.
(C) The individual's right to file a statement as provided in
subdivision (c).
(b) If the insurance institution, agent or insurance-support
organization corrects, amends or deletes recorded personal
information in accordance with paragraph (1) of subdivision (a), the
insurance institution, agent or insurance-support organization shall
so notify the individual in writing and furnish the correction,
amendment or fact of deletion to:
(1) Any person specifically designated by the individual who may
have, within the preceding two years, received such recorded personal
information.
(2) Any insurance-support organization whose primary source of
personal information is insurance institutions if the
insurance-support organization has systematically received such
recorded personal information from the insurance institution within
the preceding seven years; provided, however, that the correction,
amendment or fact of deletion need not be furnished if the
insurance-support organization no longer maintains recorded personal
information about the individual.
(3) Any insurance-support organization that furnished the personal
information that has been corrected, amended or deleted.
(c) Whenever an individual disagrees with an insurance institution'
s, agent's or insurance-support organization's refusal to correct,
amend or delete recorded personal information, the individual shall
be permitted to file with the insurance institution, agent or
insurance-support organization:
(1) A concise statement setting forth what the individual thinks
is the correct, relevant or fair information.
(2) A concise statement of the reasons why the individual
disagrees with the insurance institution's, agent's or
insurance-support organization's refusal to correct, amend or delete
recorded personal information.
(d) In the event an individual files either statement as described
in subdivision (c), the insurance institution, agent or support
organization shall:
(1) File the statement with the disputed personal information and
provide a means by which anyone reviewing the disputed personal
information will be made aware of the individual's statement and have
access to it.
(2) In any subsequent disclosure by the insurance institution,
agent or support organization of the recorded personal information
that is the subject of disagreement, clearly identify the matter or
matters in dispute and provide the individual's statement along with
the recorded personal information being disclosed.
(3) Furnish the statement to the persons and in the manner
specified in subdivision (b).
(e) The rights granted to individuals in this section shall extend
to all natural persons to the extent information about them is
collected and maintained by an insurance institution, agent or
insurance-support organization in connection with an insurance
transaction. The rights granted to all natural persons by this
subdivision shall not extend to information about them that relates
to and is collected in connection with or in reasonable anticipation
of a claim or civil or criminal proceeding involving them.
(f) For purposes of this section, the term "insurance-support
organization" does not include "consumer reporting agency".
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.
791.11. No insurance institution, agent or insurance-support
organization may seek information in connection with an insurance
transaction concerning:
(a) Any previous adverse underwriting decision experienced by an
individual, or
(b) Any previous insurance coverage obtained by an individual
through a residual market mechanism, unless such inquiry also
requests the reasons for any previous adverse underwriting decision
or the reasons why insurance coverage was previously obtained through
a residual market mechanism.
791.12. No insurance institution or agent may base an adverse
underwriting decision in whole or in part on the following:
(a) On the fact of a previous adverse underwriting decision or on
the fact that an individual previously obtained insurance coverage
through a residual market mechanism; provided, however, an insurance
institution or agent may base an adverse underwriting decision on
further information obtained from an insurance institution or agent
responsible for a previous adverse underwriting decision. The further
information, when requested, shall create a conclusive presumption
that the information is necessary to perform the requesting insurer's
function in connection with an insurance transaction involving the
individual and, when reasonably available, shall be furnished the
requesting insurer and the individual, if applicable.
(b) On personal information received from an insurance-support
organization whose primary source of information is insurance
institutions; provided, however, an insurance institution or agent
may base an adverse underwriting decision on further personal
information obtained as the result of information received from an
insurance-support organization.
(c) On the fact that an individual has previously inquired and
received information about the scope or nature of coverage under a
residential fire or property insurance policy, if the information is
received from an insurance-support organization whose primary source
of information is insurance institutions and the inquiry did not
result in the filing of a claim.
791.13. An insurance institution, agent, or insurance-support
organization shall not disclose any personal or privileged
information about an individual collected or received in connection
with an insurance transaction unless the disclosure is:
(a) With the written authorization of the individual, and meets
either of the conditions specified in paragraph (1) or (2):
(1) If the authorization is submitted by another insurance
institution, agent, or insurance-support organization, the
authorization meets the requirement of Section 791.06.
(2) If the authorization is submitted by a person other than an
insurance institution, agent, or insurance-support organization, the
authorization is:
(A) Dated.
(B) Signed by the individual.
(C) Obtained one year or less prior to the date a disclosure is
sought pursuant to this section.
(b) To a person other than an insurance institution, agent, or
insurance-support organization, provided the disclosure is reasonably
necessary:
(1) To enable the person to perform a business, professional or
insurance function for the disclosing insurance institution, agent,
or insurance-support organization or insured and the person agrees
not to disclose the information further without the individual's
written authorization unless the further disclosure:
(A) Would otherwise be permitted by this section if made by an
insurance institution, agent, or insurance-support organization; or
(B) Is reasonably necessary for such person to perform its
function for the disclosing insurance institution, agent, or
insurance-support organization.
(2) To enable the person to provide information to the disclosing
insurance institution, agent or insurance-support organization for
the purpose of:
(A) Determining an individual's eligibility for an insurance
benefit or payment; or
(B) Detecting or preventing criminal activity, fraud, material
misrepresentation or material nondisclosure in connection with an
insurance transaction.
(c) To an insurance institution, agent, insurance-support
organization or self-insurer, provided the information disclosed is
limited to that which is reasonably necessary under either paragraph
(1) or (2):
(1) To detect or prevent criminal activity, fraud, material
misrepresentation or material nondisclosure in connection with
insurance transactions; or
(2) For either the disclosing or receiving insurance institution,
agent or insurance-support organization to perform its function in
connection with an insurance transaction involving the individual.
(d) To a medical-care institution or medical professional for the
purpose of any of the following:
(1) Verifying insurance coverage or benefits.
(2) Informing an individual of a medical problem of which the
individual may not be aware.
(3) Conducting operations or services audit, provided only such
information is disclosed as is reasonably necessary to accomplish the
foregoing purposes.
(e) To an insurance regulatory authority; or
(f) To a law enforcement or other governmental authority pursuant
to law.
(g) Otherwise permitted or required by law.
(h) In response to a facially valid administrative or judicial
order, including a search warrant or subpoena.
(i) Made for the purpose of conducting actuarial or research
studies, provided:
(1) No individual may be identified in any actuarial or research
report.
(2) Materials allowing the individual to be identified are
returned or destroyed as soon as they are no longer needed.
(3) The actuarial or research organization agrees not to disclose
the information unless the disclosure would otherwise be permitted by
this section if made by an insurance institution, agent or
insurance-support organization.
(j) To a party or a representative of a party to a proposed or
consummated sale, transfer, merger or consolidation of all or part of
the business of the insurance institution, agent or
insurance-support organization, provided:
(1) Prior to the consummation of the sale, transfer, merger, or
consolidation only such information is disclosed as is reasonably
necessary to enable the recipient to make business decisions about
the purchase, transfer, merger, or consolidation.
(2) The recipient agrees not to disclose the information unless
the disclosure would otherwise be permitted by this section if made
by an insurance institution, agent or insurance-support organization.
(k) To a person whose only use of the information will be in
connection with the marketing of a product or service, provided:
(1) No medical-record information, privileged information, or
personal information relating to an individual's character, personal
habits, mode of living, or general reputation is disclosed, and no
classification derived from the information is disclosed; or
(2) The individual has been given an opportunity to indicate that
he or she does not want personal information disclosed for marketing
purposes and has given no indication that he or she does not want the
information disclosed; and
(3) The person receiving such information agrees not to use it
except in connection with the marketing of a product or service.
(l) To an affiliate whose only use of the information will be in
connection with an audit of the insurance institution or agent or the
marketing of an insurance product or service, provided the affiliate
agrees not to disclose the information for any other purpose or to
unaffiliated persons.
(m) By a consumer reporting agency, provided the disclosure is to
a person other than an insurance institution or agent.
(n) To a group policyholder for the purpose of reporting claims
experience or conducting an audit of the insurance institution's or
agent's operations or services, provided the information disclosed is
reasonably necessary for the group policyholder to conduct the
review or audit.
(o) To a professional peer review organization for the purpose of
reviewing the service or conduct of a medical-care institution or
medical professional.
(p) To a governmental authority for the purpose of determining the
individual's eligibility for health benefits for which the
governmental authority may be liable.
(q) To a certificate holder or policyholder for the purpose of
providing information regarding the status of an insurance
transaction.
(r) To a lienholder, mortgagee, assignee, lessor, or other person
shown on the records of an insurance institution or agent as having a
legal or beneficial interest in a policy of insurance. The
information disclosed shall be limited to that which is reasonably
necessary to permit the person to protect his or her interest in the
policy and shall be consistent with Article 5.5 (commencing with
Section 770).
(s) To an insured or the insured's lawyer when the information
disclosed is from an accident report, supplemental report,
investigative report or the actual report from a government agency or
is a copy of an accident report or other report which the insured is
entitled to obtain under Section 20012 of the Vehicle Code or
subdivision (f) of Section 6254 of the Government Code.
791.14. (a) The commissioner shall have power to examine and
investigate into the affairs of every insurance institution or agent
doing business in this state to determine whether the insurance
institution or agent has been or is engaged in any conduct in
violation of this article.
(b) The commissioner shall have the power to examine and
investigate into the affairs of every insurance-support organization
acting on behalf of an insurance institution or agent which either
transacts business in this state or transacts business outside this
state that has an effect on a person residing in this state in order
to determine whether such insurance-support organization has been or
is engaged in any conduct in violation of this article.
791.15. (a) Whenever the commissioner has reason to believe that an
insurance institution, agent or insurance-support organization has
been or is engaged in conduct in this state which violates this
article, or if the commissioner believes that an insurance-support
organization has been or is engaged in conduct outside this state
which has an effect on a person residing in this state and which
violates this article, the commissioner shall issue and serve upon
such insurance institution, agent or insurance-support organization a
statement of charges and notice of hearing to be held at a time and
place fixed in the notice. The date for such hearing shall be not
less than 30 days after the date of service.
(b) At the time and place fixed for such hearing the insurance
institution, agent or insurance-support organization charged shall
have an opportunity to answer the charges against it and present
evidence on its behalf. Upon good cause shown, the commissioner shall
permit any adversely affected person to intervene, appear and be
heard at such hearing by counsel or in person.
(c) At any hearing conducted pursuant to this section the
commissioner may administer oaths, examine and cross-examine
witnesses and receive oral and documentary evidence. The commissioner
shall have the power to subpoena witnesses, compel their attendance
and require the production of books, papers, records, correspondence
and other documents which are relevant to the hearing. A stenographic
record of the hearing shall be made upon the request of any party or
at the discretion of the commissioner. If no stenographic record is
made and if judicial review is sought, the commissioner shall prepare
a statement of the evidence for use on review. Hearings conducted
under this section shall be governed by the same rules of evidence
and procedure applicable to administrative proceedings conducted
under the laws of this state.
(d) Statements of charges, notice, orders and other processes of
the commissioner under this article may be served by anyone duly
authorized to act on behalf of the commissioner. Service of process
may be completed in the manner provided by law for service of process
in civil actions or by registered mail or by a mailing service
offered by a third party mailing service with tracking capability
that is not more expensive than registered mail. A copy of the
statement of charges, notice, order or other process shall be
provided to the person or persons whose rights under this article
have been allegedly violated. A verified return setting forth the
manner of service, the return postcard receipt in the case of
registered mail, or signed receipt documentation, shall be sufficient
proof of service.
791.16. For the purpose of this article, an insurance-support
organization transacting business outside this state that has an
effect on a person residing in this state shall be deemed to have
appointed the commissioner to accept service of process on its
behalf, provided the commissioner causes a copy of the service to be
mailed immediately by registered mail, or by a mailing service
offered by a third party mailing service with tracking capability
that is not more expensive than registered mail, to the
insurance-support organization at its last known principal place of
business. The return postcard receipt or signed receipt documentation
for the mailing shall be sufficient proof that the same was properly
mailed by the commissioner.
791.17. (a) If, after a hearing pursuant to Section 791.15, the
commissioner determines that the insurance institution, agent or
insurance-support organization charged has engaged in conduct or
practices in violation of this article, the commissioner shall reduce
his or her findings to writing and shall issue and cause to be
served upon such insurance institution, agent or insurance-support
organization a copy of such findings and an order requiring such
insurance institution, agent or insurance-support organization to
cease and desist from the conduct or practices constituting a
violation of this article.
(b) If, after a hearing pursuant to Section 791.15, the
commissioner determines that the insurance institution, agent or
insurance-support organization charged has not engaged in conduct or
practices in violation of this article, the commissioner shall
prepare a written report which sets forth findings of fact and
conclusions of law. Such report shall be served upon the insurance
institution, agent or insurance-support organization charged and upon
the person or persons, if any, whose rights under this article were
allegedly violated.
(c) Until the expiration of the time allowed under Section 791.18
for filing a petition for review or until such petition is actually
filed, whichever occurs first, the commissioner may modify or set
aside any order or report issued under this section. After the
expiration of the time allowed under Section 791.18 for filing a
petition for review, if no such petition has been duly filed, the
commissioner may, after notice and opportunity for hearing, alter,
modify or set aside, in whole or in part, any order or report issued
under this section whenever conditions of fact or law warrant such
action or if the public interest so requires.
791.18. (a) Any person subject to an order of the commissioner
under Section 779.17 or Section 791.20 or any person whose rights
under this article were allegedly violated may obtain a review of any
order or report of the commissioner by filing in a court of
competent jurisdiction, within 30 days from the date of the service
of such order or report, pursuant to Section 1094.5 of the Code of
Civil Procedure. The court shall have jurisdiction to make and enter
a decree modifying, affirming or reversing any order or report of the
commissioner, in whole or in part.
(b) An order or report issued by the commissioner under Section
791.17 shall become final:
(1) Upon the expiration of the time allowed for the filing of a
petition for review, if no such petition has been duly filed; except
that the commissioner may modify or set aside an order or report to
the extent provided in subdivision (c) of Section 791.17; or
(2) Upon a final decision of the court if the court directs that
the order or report of the commissioner be affirmed or the petition
for review dismissed.
(c) No order or report of the commissioner under this article or
order of a court to enforce the same shall in any way relieve or
absolve any person affected by such order or report from any
liability under any law of this state.
791.19. Any person who violates a cease and desist order of the
commissioner under Section 791.17 may, after notice and hearing and
upon order of the commissioner, be subject to one or more of the
following penalties, at the discretion of the commissioner:
(a) A monetary fine of not more than ten thousand dollars
($10,000) for each violation; or
(b) A monetary fine of not more than fifty thousand dollars
($50,000) if the commissioner finds that violations have occurred
with such frequency as to constitute a general business practice; or
(c) Suspension or revocation of an insurance institution's or
agent's license if the insurance institution or agent knew or
reasonably should have known it was in violation of this article.
791.20. (a) If any insurance institution, agent or
insurance-support organization fails to comply with Section 791.08,
791.09 or 791.10 with respect to the rights granted under those
sections, any person whose rights are violated may apply to any court
of competent jurisdiction, for appropriate equitable relief.
(b) An insurance institution, agent or insurance-support
organization which discloses information in violation of Section
791.13 shall be liable for damages sustained by the individual about
whom the information relates. However no individual shall be entitled
to a monetary award which exceeds the actual damages sustained by
the individual as a result of a violation of Section 791.13.
(c) In any action brought pursuant to this section, the court may
award the cost of the action and reasonable attorney's fees to the
prevailing party.
(d) An action under this section shall be brought within two years
from the date the alleged violation is or should have been
discovered.
(e) Except as specifically provided in this section, there shall
be no remedy or recovery available to individuals, in law or in
equity, for occurrences constituting a violation of any provision of
this act.
791.21. No cause of action in the nature of defamation, invasion of
privacy or negligence shall arise against any person for disclosing
personal or privileged information in accordance with this chapter,
nor shall such a cause of action arise against any person for
furnishing personal or privileged information to an insurance
institution, agent or insurance-support organization; provided,
however, this section shall provide no immunity for disclosing or
furnishing false information with malice or willful intent to injure
any person.
791.22. Any person who knowingly and willfully obtains information
about an individual from an insurance institution, agent or
insurance-support organization under false pretenses shall be fined
not more than ten thousand dollars ($10,000) or imprisoned for not
more than one year, or both.
791.23. The rights granted under Sections 791.08, 791.09 and 791.13
shall take effect on October 1, 1981, regardless of the date of the
collection or receipt of the information which is the subject of such
sections. Nothing contained in subdivisions (k) and (l) of Section
791.13, or in any other provision of this article, shall in any way
affect the provisions of Section 770.1.
791.26. Where an authorization from the individual was granted to a
nonprofit hospital service plan prior to October 1, 1981, such
authorization shall be deemed to be in compliance with this article.
791.27. A disability insurer that provides coverage for hospital,
medical, or surgical expenses shall not release any information to an
employer that would directly or indirectly indicate to the employer
that an employee is receiving or has received services from a health
care provider covered by the plan unless authorized to do so by the
employee. An insurer that has, pursuant to an agreement, assumed the
responsibility to pay compensation pursuant to Article 3 (commencing
with Section 3750) of Chapter 4 of Part 1 of Division 4 of the Labor
Code, shall not be considered an employer for the purposes of this
section. Nothing in this section prohibits a disability insurer from
releasing relevant information described in this section for the
purposes set forth in Chapter 12 (commencing with Section 1871) of
Part 2 of Division 1.
791.28. (a) An insurer under a personal lines residential property
insurance policy, if it reports the claims history or loss experience
of insureds under those policies to an insurance-support
organization, shall provide the insured with the following additional
disclosure at the time that it provides the disclosure required
pursuant to paragraph (1) of subdivision (b) of Section 790.034:
"This insurer reports claim information to one or more claims
information databases. The claim information is used to furnish loss
history reports to insurers. If you are interested in obtaining a
report from a claims information database, you may do so by
contacting:
(Insert the name, toll-free telephone number, and, if applicable,
Internet Web site address of each claims information database to
which the insurer reports the information covered by this section)"
(b) This section shall become operative on July 1, 2006.
791. The purpose of this article is to establish standards for the
collection, use and disclosure of information gathered in connection
with insurance transactions by insurance institutions, agents or
insurance-support organizations; to maintain a balance between the
need for information by those conducting the business of insurance
and the public's need for fairness in insurance information
practices, including the need to minimize intrusiveness; to establish
a regulatory mechanism to enable natural persons to ascertain what
information is being or has been collected about them in connection
with insurance transactions and to have access to such information
for the purpose of verifying or disputing its accuracy; to limit the
disclosure of information collected in connection with insurance
transactions; and to enable insurance applicants and policyholders to
obtain the reasons for any adverse underwriting decision.
791.01. (a) The obligations imposed by this article shall apply to
those insurance institutions, agents or insurance-support
organizations which, on or after October 1, 1981:
(1) In the case of life or disability insurance:
(A) Collect, receive or maintain information in connection with
insurance transactions which pertains to natural persons who are
residents of this state, or
(B) Engage in insurance transactions with applicants, individuals
or policyholders who are residents of this state.
(2) In the case of property or casualty insurance:
(A) Collect, receive or maintain information in connection with
insurance transactions involving policies, contracts or certificates
of insurance delivered, issued for delivery or renewed in this state,
or
(B) Engage in insurance transactions involving policies, contracts
or certificates of insurance delivered, issued for delivery or
renewed in this state.
(b) The rights granted by this article shall extend to:
(1) In the case of life or disability insurance, the following
persons who are residents of this state:
(A) Natural persons who are the subject of information collected,
received or maintained in connection with insurance transactions.
(B) Applicants, individuals or policyholders who engage in or seek
to engage in insurance transactions.
(2) In the case of property or casualty insurance, the following
persons:
(A) Natural persons who are the subject of information collected,
received or maintained in connection with insurance transactions
involving policies, contracts or certificates of insurance delivered,
issued for delivery or renewed in this state, and
(B) Applicants, individuals or policyholders who engage in or seek
to engage in insurance transactions involving policies, contracts or
certificates of insurance delivered, issued for delivery or renewed
in this state.
(c) For purposes of this section, a person shall be considered a
resident of this state if the person's last known mailing address, as
shown in the records of the insurance institution, agent, or
insurance-support organization, is located in this state.
(d) This article shall not apply to any person or entity engaged
in the business of title insurance as defined in Section 12340.3.
(e) This article shall not apply to a person or entity engaged in
the business of a home protection company, as defined in Section
12740, which does not obtain or maintain personal information, as
defined in this article, of its policyholders and applicants.
(f) Insurance institutions, agents, insurance support
organizations or any insurance transaction subject to this article
shall be exempt from Part 2.6 (commencing with Section 56) of
Division 1 of, and Sections 1785.20 and 1786.40 of, the Civil Code.
791.02. As used in this act:
(a) (1) "Adverse underwriting decision" means any of the following
actions with respect to insurance transactions involving insurance
coverage that is individually underwritten:
(A) A declination of insurance coverage.
(B) A termination of insurance coverage.
(C) Failure of an agent to apply for insurance coverage with a
specific insurance institution that the agent represents and that is
requested by an applicant.
(D) In the case of a property or casualty insurance coverage:
(i) Placement by an insurance institution or agent of a risk with
a residual market mechanism, with an unauthorized insurer, or with an
insurance institution that provides insurance to other than
preferred or standard risks, if in fact the placement is at other
than a preferred or standard rate. An adverse underwriting decision,
in case of placement with an insurance institution that provides
insurance to other than preferred or standard risks, shall not
include placement if the applicant or insured did not specify or
apply for placement as a preferred or standard risk or placement with
a particular company insuring preferred or standard risks, or
(ii) The charging of a higher rate on the basis of information
which differs from that which the applicant or policyholder
furnished.
(E) In the case of a life, health, or disability insurance
coverage, an offer to insure at higher than standard rates.
(2) Notwithstanding paragraph (1), any of the following actions
shall not be considered adverse underwriting decisions but the
insurance institution or agent responsible for their occurrence shall
nevertheless provide the applicant or policyholder with the specific
reason or reasons for their occurrence:
(A) The termination of an individual policy form on a class or
statewide basis.
(B) A declination of insurance coverage solely because coverage is
not available on a class or statewide basis.
(C) The rescission of a policy.
(b) "Affiliate" or "affiliated" means a person that directly, or
indirectly through one or more intermediaries, controls, is
controlled by or is under common control with another person.
(c) "Agent" means any person licensed pursuant to Chapter 5
(commencing with Section 1621), Chapter 5A (commencing with Section
1759), Chapter 6 (commencing with Section 1760), Chapter 7
(commencing with Section 1800), or Chapter 8 (commencing with Section
1831).
(d) "Applicant" means any person who seeks to contract for
insurance coverage other than a person seeking group insurance that
is not individually underwritten.
(e) "Consumer report" means any written, oral, or other
communication of information bearing on a natural person's
creditworthiness, credit standing, credit capacity, character,
general reputation, personal characteristics, or mode of living that
is used or expected to be used in connection with an insurance
transaction.
(f) "Consumer reporting agency" means any person who:
(1) Regularly engages, in whole or in part, in the practice of
assembling or preparing consumer reports for a monetary fee.
(2) Obtains information primarily from sources other than
insurance institutions.
(3) Furnishes consumer reports to other persons.
(g) "Control," including the terms "controlled by" or "under
common control with," means the possession, direct or indirect, of
the power to direct or cause the direction of the management and
policies of a person, whether through the ownership of voting
securities, by contract other than a commercial contract for goods or
nonmanagement services, or otherwise, unless the power is the result
of an official position with or corporate office held by the person.
(h) "Declination of insurance coverage" means a denial, in whole
or in part, by an insurance institution or agent of requested
insurance coverage.
(i) "Individual" means any natural person who is any of the
following:
(1) In the case of property or casualty insurance, is a past,
present, or proposed named insured or certificate holder.
(2) In the case of life or disability insurance, is a past,
present, or proposed principal insured or certificate holder.
(3) Is a past, present, or proposed policyowner.
(4) Is a past or present applicant.
(5) Is a past or present claimant.
(6) Derived, derives, or is proposed to derive insurance coverage
under an insurance policy or certificate subject to this act.
(j) "Institutional source" means any person or governmental entity
that provides information about an individual to an agent, insurance
institution, or insurance-support organization, other than any of
the following:
(1) An agent.
(2) The individual who is the subject of the information.
(3) A natural person acting in a personal capacity rather than in
a business or professional capacity.
(k) "Insurance institution" means any corporation, association,
partnership, reciprocal exchange, interinsurer, Lloyd's insurer,
fraternal benefit society, or other person engaged in the business of
insurance. "Insurance institution" shall not include agents,
insurance-support organizations, or health care service plans
regulated pursuant to the Knox-Keene Health Care Service Plan Act,
Chapter 2.2 (commencing with Section 1340) of Division 2 of the
Health and Safety Code.
(l) "Insurance-support organization" means:
(1) Any person who regularly engages, in whole or in part, in the
business of assembling or collecting information about natural
persons for the primary purpose of providing the information to an
insurance institution or agent for insurance transactions, including
either of the following:
(A) The furnishing of consumer reports or investigative consumer
reports to an insurance institution or agent for use in connection
with an insurance transaction.
(B) The collection of personal information from insurance
institutions, agents, or other insurance-support organizations for
the purpose of detecting or preventing fraud, material
misrepresentation or material nondisclosure in connection with
insurance underwriting or insurance claim activity.
(2) Notwithstanding paragraph (1), the following persons shall not
be considered "insurance-support organizations": agents,
governmental institutions, insurance institutions, medical care
institutions, medical professionals, and peer review committees.
(m) "Insurance transaction" means any transaction involving
insurance primarily for personal, family, or household needs rather
than business or professional needs that entails either of the
following:
(1) The determination of an individual's eligibility for an
insurance coverage, benefit, or payment.
(2) The servicing of an insurance application, policy, contract,
or certificate.
(n) "Investigative consumer report" means a consumer report or
portion thereof in which information about a natural person's
character, general reputation, personal characteristics, or mode of
living is obtained through personal interviews with the person's
neighbors, friends, associates, acquaintances, or others who may have
knowledge concerning those items of information.
(o) "Medical care institution" means any facility or institution
that is licensed to provide health care services to natural persons,
including but not limited to, hospitals, skilled nursing facilities,
home health agencies, medical clinics, rehabilitation agencies, and
public health agencies.
(p) "Medical professional" means any person licensed or certified
to provide health care services to natural persons, including but not
limited to, a physician, dentist, nurse, optometrist, physical or
occupational therapist, psychiatric social worker, clinical
dietitian, clinical psychologist, chiropractor, pharmacist, or speech
therapist.
(q) "Medical record information" means personal information that
is both of the following:
(1) Relates to an individual's physical or mental condition,
medical history or medical treatment.
(2) Is obtained from a medical professional or medical care
institution, from the individual, or from the individual's spouse,
parent, or legal guardian.
(r) "Person" means any natural person, corporation, association,
partnership, limited liability company, or other legal entity.
(s) "Personal information" means any individually identifiable
information gathered in connection with an insurance transaction from
which judgments can be made about an individual's character, habits,
avocations, finances, occupation, general reputation, credit,
health, or any other personal characteristics. "Personal information"
includes an individual's name and address and "medical record
information" but does not include "privileged information."
(t) "Policyholder" means any person who is any of the following:
(1) In the case of individual property or casualty insurance, is a
present named insured.
(2) In the case of individual life or disability insurance, is a
present policyowner.
(3) In the case of group insurance, which is individually
underwritten, is a present group certificate holder.
(u) "Pretext interview" means an interview whereby a person, in an
attempt to obtain information about a natural person, performs one
or more of the following acts:
(1) Pretends to be someone he or she is not.
(2) Pretends to represent a person he or she is not in fact
representing.
(3) Misrepresents the true purpose of the interview.
(4) Refuses to identify himself or herself upon request.
(v) "Privileged information" means any individually identifiable
information that both:
(1) Relates to a claim for insurance benefits or a civil or
criminal proceeding involving an individual.
(2) Is collected in connection with or in reasonable anticipation
of a claim for insurance benefits or civil or criminal proceeding
involving an individual. However, information otherwise meeting the
requirements of this division shall nevertheless be considered
"personal information" under this act if it is disclosed in violation
of Section 791.13.
(w) "Residual market mechanism" means the California FAIR Plan
Association, Chapter 10 (commencing with Section 10101) of Part 1 of
Division 2, and the assigned risk plan, Chapter 1 (commencing with
Section 11550) of Part 3 of Division 2.
(x) "Termination of insurance coverage" or "termination of an
insurance policy" means either a cancellation or nonrenewal of an
insurance policy, in whole or in part, for any reason other than the
failure to pay a premium as required by the policy.
(y) "Unauthorized insurer" means an insurance institution that has
not been granted a certificate of authority by the director to
transact the business of insurance in this state.
(z) "Commissioner" means the Insurance Commissioner.
791.03. No insurance institution, agent or insurance-support
organization shall use or authorize the use of pretext interviews to
obtain information in connection with an insurance transaction;
provided, however, that a pretext interview may be undertaken to
obtain information from a person or institution that does not have a
generally or statutorily recognized privileged relationship with the
person to whom the information relates for the purpose of
investigating a claim where there is a reasonable basis for
suspecting criminal activity, fraud, material misrepresentation or
material nondisclosure in connection with a claim.
791.04. (a) An insurance institution or agent shall provide a
notice of information practices to all applicants or policyholders in
connection with insurance transactions as provided below:
(1) In the case of a written application for insurance, a notice
shall be provided no later than:
(A) At the time of the delivery of the insurance policy or
certificate when personal information is collected only from the
applicant, an insured under the policy, or from public records; or
(B) At the time the collection of personal information is
initiated when personal information is collected from a source other
than the applicant, an insured under the policy, or public records.
(2) In the case of a policy renewal, a notice shall be provided no
later than the policy renewal date or the date upon which policy
renewal is confirmed, except that no notice shall be required in
connection with a policy renewal if either of the following applies:
(A) Personal information is collected only from the policyholder,
an insured under the policy, or from public records.
(B) A notice meeting the requirements of this section has been
given within the previous 24 months.
(3) In the case of a policy reinstatement or change in insurance
benefits, a notice shall be provided no later than the time a request
for a policy reinstatement or change in insurance benefits is
received by the insurance institution, except that no notice shall be
required if personal information is collected only from the
policyholder, an insured under the policy, or from public records or
if a notice meeting the requirements of this section has been given
within the previous 24 months.
(b) The notice required by subdivision (a) shall be in writing and
shall state all of the following:
(1) Whether personal information may be collected from persons
other than the individual or individuals proposed for coverage.
(2) The types of personal information that may be collected and
the types of sources and investigative techniques that may be used to
collect such information.
(3) The types of disclosures identified in subdivisions (b), (c),
(d), (e), (f), (i), (k), (l), and (n) of Section 791.13 and the
circumstances under which the disclosures may be made without prior
authorization, except that only those circumstances need be described
which occur with such frequency as to indicate a general business
practice.
(4) A description of the rights established under Sections 791.08
and 791.09 and the manner in which the rights may be exercised.
(5) That information obtained from a report prepared by an
insurance-support organization may be retained by the
insurance-support organization and disclosed to other persons.
(c) In lieu of the notice prescribed in subdivision (b), the
insurance institution or agent may provide an abbreviated notice
informing the applicant or policyholder of the following:
(1) Personal information may be collected from persons other than
the individual or individuals proposed for coverage.
(2) Such information as well as other personal or privileged
information subsequently collected by the insurance institution or
agent may in certain circumstances be disclosed to third parties
without authorization.
(3) A right of access and correction exists with respect to all
personal information collected.
(4) The notice prescribed in subdivision (b) will be furnished to
the applicant or policyholder upon request.
(d) 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.
791.05. An insurance institution or agent shall clearly specify
those questions designed to obtain information solely for marketing
or research purposes from an individual in connection with an
insurance transaction.
791.06. Notwithstanding any other provision of law, no insurance
institution, agent or insurance-support organization may utilize as
its disclosure authorization form in connection with insurance
transactions a form or statement which authorizes the disclosure of
personal or privileged information about an individual to the
insurance institution, agent, or insurance-support organization
unless the form or statement:
(a) Is written in plain language.
(b) Is dated.
(c) Specifies the types of persons authorized to disclose
information about the individual.
(d) Specifies the nature of the information authorized to be
disclosed.
(e) Names the insurance institution or agent and identifies by
generic reference representatives of the insurance institution to
whom the individual is authorizing information to be disclosed.
(f) Specifies the purposes for which the information is collected.
(g) Specifies the length of time the authorization shall remain
valid, which shall be no longer than:
(1) In the case of authorizations signed for the purpose of
collecting information in connection with an application for an
insurance policy, a policy reinstatement or a request for change in
policy benefits:
(A) Thirty months from the date the authorization is signed if the
application or request involves life, health or disability
insurance; or
(B) One year from the date the authorization is signed if the
application or request involves property or casualty insurance.
(2) In the case of authorizations signed for the purpose of
collecting information in connection with a claim for benefits under
an insurance policy:
(A) The term of coverage of the policy if the claim is for a
health insurance benefit; or
(B) The duration of the claim if the claim is not for a health
insurance benefit; or
(C) The duration of all claims processing activity performed in
connection with all claims for benefits made by any person entitled
to benefits under a nonprofit hospital service contract.
(h) Advises the individual or a person authorized to act on behalf
of the individual that the individual or the individual's authorized
representative is entitled to receive a copy of the authorization
form.
(i) This section shall not be construed to require any
authorization for the receipt of personal or privileged information
about an individual.
791.07. (a) No insurance institution, agent or insurance-support
organization may prepare or request an investigative consumer report
about an individual in connection with an insurance transaction
involving an application for insurance, a policy renewal, a policy
reinstatement or a change in insurance benefits unless the insurance
institution or agent informs the individual of the following:
(1) That he or she may request to be interviewed in connection
with the preparation of the investigative consumer report, and
(2) That upon a request pursuant to Section 791.08, he or she is
entitled to receive a copy of the investigative consumer report.
(b) If an investigative consumer report is to be prepared by an
insurance institution or agent, the insurance institution or agent
shall institute reasonable procedures to conduct a personal interview
requested by an individual.
(c) If an investigative consumer report is to be prepared by an
insurance-support organization, the insurance institution or agent
desiring such report shall inform the insurance-support organization
whether a personal interview has been requested by the individual.
The insurance-support organization shall institute reasonable
procedures to conduct such interviews, if requested.
791.08. (a) If any individual, after proper identification, submits
a written request to an insurance institution, agent or
insurance-support organization for access to recorded personal
information about the individual which is reasonably described by the
individual and reasonably locatable and retrievable by the insurance
institution, agent or insurance-support organization, the insurance
institution, agent or insurance-support organization shall within 30
business days from the date such request is received:
(1) Inform the individual of the nature and substance of such
recorded personal information in writing, by telephone or by other
oral communication, whichever the insurance institution, agent or
insurance-support organization prefers;
(2) Permit the individual to see and copy, in person, such
recorded personal information pertaining to him or her or to obtain a
copy of such recorded personal information by mail, whichever the
individual prefers, unless such recorded personal information is in
coded form, in which case an accurate translation in plain language
shall be provided in writing;
(3) Disclose to the individual the identity, if recorded, of those
persons to whom the insurance institution, agent or
insurance-support organization has disclosed such personal
information within two years prior to such request, and if the
identity is not recorded, the names of those insurance institutions,
agents, insurance-support organizations or other persons to whom such
information is normally disclosed; and
(4) Provide the individual with a summary of the procedures by
which he or she may request correction, amendment or deletion of
recorded personal information.
(b) Any personal information provided pursuant to subdivision (a)
above shall identify the source of the information if such source is
an institutional source.
(c) Medical record information supplied by a medical care
institution or medical professional and requested under subdivision
(a), together with the identity of the medical professional or
medical care institution which provided such information, shall be
supplied either directly to the individual 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 section, only with the approval of the qualified professional
person with treatment responsibility for the condition to which the
information relates. If it elects to disclose the information to a
medical professional designated by the individual, the insurance
institution, agent or insurance-support organization shall notify the
individual, at the time of the disclosure, that it has provided the
information to the medical professional.
(d) Except for personal information provided under Section 791.10,
an insurance institution, agent or insurance-support organization
may charge a reasonable fee to cover the costs incurred in providing
a copy of recorded personal information to individuals.
(e) 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. With respect to
the copying and disclosure of recorded personal information pursuant
to a request under subdivision (a), an insurance institution, agent
or insurance-support organization may make arrangements with an
insurance-support organization or a consumer reporting agency to copy
and disclose recorded personal information on its behalf.
(f) The rights granted to individuals in this section shall extend
to all natural persons to the extent information about them is
collected and maintained by an insurance institution, agent or
insurance-support organization in connection with an insurance
transaction. The rights granted to all natural persons by this
subdivision shall not extend to information about them that relates
to and is collected in connection with or in reasonable anticipation
of a claim or civil or criminal proceeding involving them.
(g) For purposes of this section, the term "insurance-support
organization" does not include "consumer reporting agency".
791.09. (a) Within 30 business days from the date of receipt of a
written request from an individual to correct, amend or delete any
recorded personal information about the individual within its
possession, an insurance institution, agent or insurance-support
organization shall either:
(1) Correct, amend or delete the portion of the recorded personal
information in dispute; or
(2) Notify the individual of:
(A) Its refusal to make such correction, amendment or deletion.
(B) The reasons for the refusal.
(C) The individual's right to file a statement as provided in
subdivision (c).
(b) If the insurance institution, agent or insurance-support
organization corrects, amends or deletes recorded personal
information in accordance with paragraph (1) of subdivision (a), the
insurance institution, agent or insurance-support organization shall
so notify the individual in writing and furnish the correction,
amendment or fact of deletion to:
(1) Any person specifically designated by the individual who may
have, within the preceding two years, received such recorded personal
information.
(2) Any insurance-support organization whose primary source of
personal information is insurance institutions if the
insurance-support organization has systematically received such
recorded personal information from the insurance institution within
the preceding seven years; provided, however, that the correction,
amendment or fact of deletion need not be furnished if the
insurance-support organization no longer maintains recorded personal
information about the individual.
(3) Any insurance-support organization that furnished the personal
information that has been corrected, amended or deleted.
(c) Whenever an individual disagrees with an insurance institution'
s, agent's or insurance-support organization's refusal to correct,
amend or delete recorded personal information, the individual shall
be permitted to file with the insurance institution, agent or
insurance-support organization:
(1) A concise statement setting forth what the individual thinks
is the correct, relevant or fair information.
(2) A concise statement of the reasons why the individual
disagrees with the insurance institution's, agent's or
insurance-support organization's refusal to correct, amend or delete
recorded personal information.
(d) In the event an individual files either statement as described
in subdivision (c), the insurance institution, agent or support
organization shall:
(1) File the statement with the disputed personal information and
provide a means by which anyone reviewing the disputed personal
information will be made aware of the individual's statement and have
access to it.
(2) In any subsequent disclosure by the insurance institution,
agent or support organization of the recorded personal information
that is the subject of disagreement, clearly identify the matter or
matters in dispute and provide the individual's statement along with
the recorded personal information being disclosed.
(3) Furnish the statement to the persons and in the manner
specified in subdivision (b).
(e) The rights granted to individuals in this section shall extend
to all natural persons to the extent information about them is
collected and maintained by an insurance institution, agent or
insurance-support organization in connection with an insurance
transaction. The rights granted to all natural persons by this
subdivision shall not extend to information about them that relates
to and is collected in connection with or in reasonable anticipation
of a claim or civil or criminal proceeding involving them.
(f) For purposes of this section, the term "insurance-support
organization" does not include "consumer reporting agency".
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.
791.11. No insurance institution, agent or insurance-support
organization may seek information in connection with an insurance
transaction concerning:
(a) Any previous adverse underwriting decision experienced by an
individual, or
(b) Any previous insurance coverage obtained by an individual
through a residual market mechanism, unless such inquiry also
requests the reasons for any previous adverse underwriting decision
or the reasons why insurance coverage was previously obtained through
a residual market mechanism.
791.12. No insurance institution or agent may base an adverse
underwriting decision in whole or in part on the following:
(a) On the fact of a previous adverse underwriting decision or on
the fact that an individual previously obtained insurance coverage
through a residual market mechanism; provided, however, an insurance
institution or agent may base an adverse underwriting decision on
further information obtained from an insurance institution or agent
responsible for a previous adverse underwriting decision. The further
information, when requested, shall create a conclusive presumption
that the information is necessary to perform the requesting insurer's
function in connection with an insurance transaction involving the
individual and, when reasonably available, shall be furnished the
requesting insurer and the individual, if applicable.
(b) On personal information received from an insurance-support
organization whose primary source of information is insurance
institutions; provided, however, an insurance institution or agent
may base an adverse underwriting decision on further personal
information obtained as the result of information received from an
insurance-support organization.
(c) On the fact that an individual has previously inquired and
received information about the scope or nature of coverage under a
residential fire or property insurance policy, if the information is
received from an insurance-support organization whose primary source
of information is insurance institutions and the inquiry did not
result in the filing of a claim.
791.13. An insurance institution, agent, or insurance-support
organization shall not disclose any personal or privileged
information about an individual collected or received in connection
with an insurance transaction unless the disclosure is:
(a) With the written authorization of the individual, and meets
either of the conditions specified in paragraph (1) or (2):
(1) If the authorization is submitted by another insurance
institution, agent, or insurance-support organization, the
authorization meets the requirement of Section 791.06.
(2) If the authorization is submitted by a person other than an
insurance institution, agent, or insurance-support organization, the
authorization is:
(A) Dated.
(B) Signed by the individual.
(C) Obtained one year or less prior to the date a disclosure is
sought pursuant to this section.
(b) To a person other than an insurance institution, agent, or
insurance-support organization, provided the disclosure is reasonably
necessary:
(1) To enable the person to perform a business, professional or
insurance function for the disclosing insurance institution, agent,
or insurance-support organization or insured and the person agrees
not to disclose the information further without the individual's
written authorization unless the further disclosure:
(A) Would otherwise be permitted by this section if made by an
insurance institution, agent, or insurance-support organization; or
(B) Is reasonably necessary for such person to perform its
function for the disclosing insurance institution, agent, or
insurance-support organization.
(2) To enable the person to provide information to the disclosing
insurance institution, agent or insurance-support organization for
the purpose of:
(A) Determining an individual's eligibility for an insurance
benefit or payment; or
(B) Detecting or preventing criminal activity, fraud, material
misrepresentation or material nondisclosure in connection with an
insurance transaction.
(c) To an insurance institution, agent, insurance-support
organization or self-insurer, provided the information disclosed is
limited to that which is reasonably necessary under either paragraph
(1) or (2):
(1) To detect or prevent criminal activity, fraud, material
misrepresentation or material nondisclosure in connection with
insurance transactions; or
(2) For either the disclosing or receiving insurance institution,
agent or insurance-support organization to perform its function in
connection with an insurance transaction involving the individual.
(d) To a medical-care institution or medical professional for the
purpose of any of the following:
(1) Verifying insurance coverage or benefits.
(2) Informing an individual of a medical problem of which the
individual may not be aware.
(3) Conducting operations or services audit, provided only such
information is disclosed as is reasonably necessary to accomplish the
foregoing purposes.
(e) To an insurance regulatory authority; or
(f) To a law enforcement or other governmental authority pursuant
to law.
(g) Otherwise permitted or required by law.
(h) In response to a facially valid administrative or judicial
order, including a search warrant or subpoena.
(i) Made for the purpose of conducting actuarial or research
studies, provided:
(1) No individual may be identified in any actuarial or research
report.
(2) Materials allowing the individual to be identified are
returned or destroyed as soon as they are no longer needed.
(3) The actuarial or research organization agrees not to disclose
the information unless the disclosure would otherwise be permitted by
this section if made by an insurance institution, agent or
insurance-support organization.
(j) To a party or a representative of a party to a proposed or
consummated sale, transfer, merger or consolidation of all or part of
the business of the insurance institution, agent or
insurance-support organization, provided:
(1) Prior to the consummation of the sale, transfer, merger, or
consolidation only such information is disclosed as is reasonably
necessary to enable the recipient to make business decisions about
the purchase, transfer, merger, or consolidation.
(2) The recipient agrees not to disclose the information unless
the disclosure would otherwise be permitted by this section if made
by an insurance institution, agent or insurance-support organization.
(k) To a person whose only use of the information will be in
connection with the marketing of a product or service, provided:
(1) No medical-record information, privileged information, or
personal information relating to an individual's character, personal
habits, mode of living, or general reputation is disclosed, and no
classification derived from the information is disclosed; or
(2) The individual has been given an opportunity to indicate that
he or she does not want personal information disclosed for marketing
purposes and has given no indication that he or she does not want the
information disclosed; and
(3) The person receiving such information agrees not to use it
except in connection with the marketing of a product or service.
(l) To an affiliate whose only use of the information will be in
connection with an audit of the insurance institution or agent or the
marketing of an insurance product or service, provided the affiliate
agrees not to disclose the information for any other purpose or to
unaffiliated persons.
(m) By a consumer reporting agency, provided the disclosure is to
a person other than an insurance institution or agent.
(n) To a group policyholder for the purpose of reporting claims
experience or conducting an audit of the insurance institution's or
agent's operations or services, provided the information disclosed is
reasonably necessary for the group policyholder to conduct the
review or audit.
(o) To a professional peer review organization for the purpose of
reviewing the service or conduct of a medical-care institution or
medical professional.
(p) To a governmental authority for the purpose of determining the
individual's eligibility for health benefits for which the
governmental authority may be liable.
(q) To a certificate holder or policyholder for the purpose of
providing information regarding the status of an insurance
transaction.
(r) To a lienholder, mortgagee, assignee, lessor, or other person
shown on the records of an insurance institution or agent as having a
legal or beneficial interest in a policy of insurance. The
information disclosed shall be limited to that which is reasonably
necessary to permit the person to protect his or her interest in the
policy and shall be consistent with Article 5.5 (commencing with
Section 770).
(s) To an insured or the insured's lawyer when the information
disclosed is from an accident report, supplemental report,
investigative report or the actual report from a government agency or
is a copy of an accident report or other report which the insured is
entitled to obtain under Section 20012 of the Vehicle Code or
subdivision (f) of Section 6254 of the Government Code.
791.14. (a) The commissioner shall have power to examine and
investigate into the affairs of every insurance institution or agent
doing business in this state to determine whether the insurance
institution or agent has been or is engaged in any conduct in
violation of this article.
(b) The commissioner shall have the power to examine and
investigate into the affairs of every insurance-support organization
acting on behalf of an insurance institution or agent which either
transacts business in this state or transacts business outside this
state that has an effect on a person residing in this state in order
to determine whether such insurance-support organization has been or
is engaged in any conduct in violation of this article.
791.15. (a) Whenever the commissioner has reason to believe that an
insurance institution, agent or insurance-support organization has
been or is engaged in conduct in this state which violates this
article, or if the commissioner believes that an insurance-support
organization has been or is engaged in conduct outside this state
which has an effect on a person residing in this state and which
violates this article, the commissioner shall issue and serve upon
such insurance institution, agent or insurance-support organization a
statement of charges and notice of hearing to be held at a time and
place fixed in the notice. The date for such hearing shall be not
less than 30 days after the date of service.
(b) At the time and place fixed for such hearing the insurance
institution, agent or insurance-support organization charged shall
have an opportunity to answer the charges against it and present
evidence on its behalf. Upon good cause shown, the commissioner shall
permit any adversely affected person to intervene, appear and be
heard at such hearing by counsel or in person.
(c) At any hearing conducted pursuant to this section the
commissioner may administer oaths, examine and cross-examine
witnesses and receive oral and documentary evidence. The commissioner
shall have the power to subpoena witnesses, compel their attendance
and require the production of books, papers, records, correspondence
and other documents which are relevant to the hearing. A stenographic
record of the hearing shall be made upon the request of any party or
at the discretion of the commissioner. If no stenographic record is
made and if judicial review is sought, the commissioner shall prepare
a statement of the evidence for use on review. Hearings conducted
under this section shall be governed by the same rules of evidence
and procedure applicable to administrative proceedings conducted
under the laws of this state.
(d) Statements of charges, notice, orders and other processes of
the commissioner under this article may be served by anyone duly
authorized to act on behalf of the commissioner. Service of process
may be completed in the manner provided by law for service of process
in civil actions or by registered mail or by a mailing service
offered by a third party mailing service with tracking capability
that is not more expensive than registered mail. A copy of the
statement of charges, notice, order or other process shall be
provided to the person or persons whose rights under this article
have been allegedly violated. A verified return setting forth the
manner of service, the return postcard receipt in the case of
registered mail, or signed receipt documentation, shall be sufficient
proof of service.
791.16. For the purpose of this article, an insurance-support
organization transacting business outside this state that has an
effect on a person residing in this state shall be deemed to have
appointed the commissioner to accept service of process on its
behalf, provided the commissioner causes a copy of the service to be
mailed immediately by registered mail, or by a mailing service
offered by a third party mailing service with tracking capability
that is not more expensive than registered mail, to the
insurance-support organization at its last known principal place of
business. The return postcard receipt or signed receipt documentation
for the mailing shall be sufficient proof that the same was properly
mailed by the commissioner.
791.17. (a) If, after a hearing pursuant to Section 791.15, the
commissioner determines that the insurance institution, agent or
insurance-support organization charged has engaged in conduct or
practices in violation of this article, the commissioner shall reduce
his or her findings to writing and shall issue and cause to be
served upon such insurance institution, agent or insurance-support
organization a copy of such findings and an order requiring such
insurance institution, agent or insurance-support organization to
cease and desist from the conduct or practices constituting a
violation of this article.
(b) If, after a hearing pursuant to Section 791.15, the
commissioner determines that the insurance institution, agent or
insurance-support organization charged has not engaged in conduct or
practices in violation of this article, the commissioner shall
prepare a written report which sets forth findings of fact and
conclusions of law. Such report shall be served upon the insurance
institution, agent or insurance-support organization charged and upon
the person or persons, if any, whose rights under this article were
allegedly violated.
(c) Until the expiration of the time allowed under Section 791.18
for filing a petition for review or until such petition is actually
filed, whichever occurs first, the commissioner may modify or set
aside any order or report issued under this section. After the
expiration of the time allowed under Section 791.18 for filing a
petition for review, if no such petition has been duly filed, the
commissioner may, after notice and opportunity for hearing, alter,
modify or set aside, in whole or in part, any order or report issued
under this section whenever conditions of fact or law warrant such
action or if the public interest so requires.
791.18. (a) Any person subject to an order of the commissioner
under Section 779.17 or Section 791.20 or any person whose rights
under this article were allegedly violated may obtain a review of any
order or report of the commissioner by filing in a court of
competent jurisdiction, within 30 days from the date of the service
of such order or report, pursuant to Section 1094.5 of the Code of
Civil Procedure. The court shall have jurisdiction to make and enter
a decree modifying, affirming or reversing any order or report of the
commissioner, in whole or in part.
(b) An order or report issued by the commissioner under Section
791.17 shall become final:
(1) Upon the expiration of the time allowed for the filing of a
petition for review, if no such petition has been duly filed; except
that the commissioner may modify or set aside an order or report to
the extent provided in subdivision (c) of Section 791.17; or
(2) Upon a final decision of the court if the court directs that
the order or report of the commissioner be affirmed or the petition
for review dismissed.
(c) No order or report of the commissioner under this article or
order of a court to enforce the same shall in any way relieve or
absolve any person affected by such order or report from any
liability under any law of this state.
791.19. Any person who violates a cease and desist order of the
commissioner under Section 791.17 may, after notice and hearing and
upon order of the commissioner, be subject to one or more of the
following penalties, at the discretion of the commissioner:
(a) A monetary fine of not more than ten thousand dollars
($10,000) for each violation; or
(b) A monetary fine of not more than fifty thousand dollars
($50,000) if the commissioner finds that violations have occurred
with such frequency as to constitute a general business practice; or
(c) Suspension or revocation of an insurance institution's or
agent's license if the insurance institution or agent knew or
reasonably should have known it was in violation of this article.
791.20. (a) If any insurance institution, agent or
insurance-support organization fails to comply with Section 791.08,
791.09 or 791.10 with respect to the rights granted under those
sections, any person whose rights are violated may apply to any court
of competent jurisdiction, for appropriate equitable relief.
(b) An insurance institution, agent or insurance-support
organization which discloses information in violation of Section
791.13 shall be liable for damages sustained by the individual about
whom the information relates. However no individual shall be entitled
to a monetary award which exceeds the actual damages sustained by
the individual as a result of a violation of Section 791.13.
(c) In any action brought pursuant to this section, the court may
award the cost of the action and reasonable attorney's fees to the
prevailing party.
(d) An action under this section shall be brought within two years
from the date the alleged violation is or should have been
discovered.
(e) Except as specifically provided in this section, there shall
be no remedy or recovery available to individuals, in law or in
equity, for occurrences constituting a violation of any provision of
this act.
791.21. No cause of action in the nature of defamation, invasion of
privacy or negligence shall arise against any person for disclosing
personal or privileged information in accordance with this chapter,
nor shall such a cause of action arise against any person for
furnishing personal or privileged information to an insurance
institution, agent or insurance-support organization; provided,
however, this section shall provide no immunity for disclosing or
furnishing false information with malice or willful intent to injure
any person.
791.22. Any person who knowingly and willfully obtains information
about an individual from an insurance institution, agent or
insurance-support organization under false pretenses shall be fined
not more than ten thousand dollars ($10,000) or imprisoned for not
more than one year, or both.
791.23. The rights granted under Sections 791.08, 791.09 and 791.13
shall take effect on October 1, 1981, regardless of the date of the
collection or receipt of the information which is the subject of such
sections. Nothing contained in subdivisions (k) and (l) of Section
791.13, or in any other provision of this article, shall in any way
affect the provisions of Section 770.1.
791.26. Where an authorization from the individual was granted to a
nonprofit hospital service plan prior to October 1, 1981, such
authorization shall be deemed to be in compliance with this article.
791.27. A disability insurer that provides coverage for hospital,
medical, or surgical expenses shall not release any information to an
employer that would directly or indirectly indicate to the employer
that an employee is receiving or has received services from a health
care provider covered by the plan unless authorized to do so by the
employee. An insurer that has, pursuant to an agreement, assumed the
responsibility to pay compensation pursuant to Article 3 (commencing
with Section 3750) of Chapter 4 of Part 1 of Division 4 of the Labor
Code, shall not be considered an employer for the purposes of this
section. Nothing in this section prohibits a disability insurer from
releasing relevant information described in this section for the
purposes set forth in Chapter 12 (commencing with Section 1871) of
Part 2 of Division 1.
791.28. (a) An insurer under a personal lines residential property
insurance policy, if it reports the claims history or loss experience
of insureds under those policies to an insurance-support
organization, shall provide the insured with the following additional
disclosure at the time that it provides the disclosure required
pursuant to paragraph (1) of subdivision (b) of Section 790.034:
"This insurer reports claim information to one or more claims
information databases. The claim information is used to furnish loss
history reports to insurers. If you are interested in obtaining a
report from a claims information database, you may do so by
contacting:
(Insert the name, toll-free telephone number, and, if applicable,
Internet Web site address of each claims information database to
which the insurer reports the information covered by this section)"
(b) This section shall become operative on July 1, 2006.
791. The purpose of this article is to establish standards for the
collection, use and disclosure of information gathered in connection
with insurance transactions by insurance institutions, agents or
insurance-support organizations; to maintain a balance between the
need for information by those conducting the business of insurance
and the public's need for fairness in insurance information
practices, including the need to minimize intrusiveness; to establish
a regulatory mechanism to enable natural persons to ascertain what
information is being or has been collected about them in connection
with insurance transactions and to have access to such information
for the purpose of verifying or disputing its accuracy; to limit the
disclosure of information collected in connection with insurance
transactions; and to enable insurance applicants and policyholders to
obtain the reasons for any adverse underwriting decision.
791.01. (a) The obligations imposed by this article shall apply to
those insurance institutions, agents or insurance-support
organizations which, on or after October 1, 1981:
(1) In the case of life or disability insurance:
(A) Collect, receive or maintain information in connection with
insurance transactions which pertains to natural persons who are
residents of this state, or
(B) Engage in insurance transactions with applicants, individuals
or policyholders who are residents of this state.
(2) In the case of property or casualty insurance:
(A) Collect, receive or maintain information in connection with
insurance transactions involving policies, contracts or certificates
of insurance delivered, issued for delivery or renewed in this state,
or
(B) Engage in insurance transactions involving policies, contracts
or certificates of insurance delivered, issued for delivery or
renewed in this state.
(b) The rights granted by this article shall extend to:
(1) In the case of life or disability insurance, the following
persons who are residents of this state:
(A) Natural persons who are the subject of information collected,
received or maintained in connection with insurance transactions.
(B) Applicants, individuals or policyholders who engage in or seek
to engage in insurance transactions.
(2) In the case of property or casualty insurance, the following
persons:
(A) Natural persons who are the subject of information collected,
received or maintained in connection with insurance transactions
involving policies, contracts or certificates of insurance delivered,
issued for delivery or renewed in this state, and
(B) Applicants, individuals or policyholders who engage in or seek
to engage in insurance transactions involving policies, contracts or
certificates of insurance delivered, issued for delivery or renewed
in this state.
(c) For purposes of this section, a person shall be considered a
resident of this state if the person's last known mailing address, as
shown in the records of the insurance institution, agent, or
insurance-support organization, is located in this state.
(d) This article shall not apply to any person or entity engaged
in the business of title insurance as defined in Section 12340.3.
(e) This article shall not apply to a person or entity engaged in
the business of a home protection company, as defined in Section
12740, which does not obtain or maintain personal information, as
defined in this article, of its policyholders and applicants.
(f) Insurance institutions, agents, insurance support
organizations or any insurance transaction subject to this article
shall be exempt from Part 2.6 (commencing with Section 56) of
Division 1 of, and Sections 1785.20 and 1786.40 of, the Civil Code.
791.02. As used in this act:
(a) (1) "Adverse underwriting decision" means any of the following
actions with respect to insurance transactions involving insurance
coverage that is individually underwritten:
(A) A declination of insurance coverage.
(B) A termination of insurance coverage.
(C) Failure of an agent to apply for insurance coverage with a
specific insurance institution that the agent represents and that is
requested by an applicant.
(D) In the case of a property or casualty insurance coverage:
(i) Placement by an insurance institution or agent of a risk with
a residual market mechanism, with an unauthorized insurer, or with an
insurance institution that provides insurance to other than
preferred or standard risks, if in fact the placement is at other
than a preferred or standard rate. An adverse underwriting decision,
in case of placement with an insurance institution that provides
insurance to other than preferred or standard risks, shall not
include placement if the applicant or insured did not specify or
apply for placement as a preferred or standard risk or placement with
a particular company insuring preferred or standard risks, or
(ii) The charging of a higher rate on the basis of information
which differs from that which the applicant or policyholder
furnished.
(E) In the case of a life, health, or disability insurance
coverage, an offer to insure at higher than standard rates.
(2) Notwithstanding paragraph (1), any of the following actions
shall not be considered adverse underwriting decisions but the
insurance institution or agent responsible for their occurrence shall
nevertheless provide the applicant or policyholder with the specific
reason or reasons for their occurrence:
(A) The termination of an individual policy form on a class or
statewide basis.
(B) A declination of insurance coverage solely because coverage is
not available on a class or statewide basis.
(C) The rescission of a policy.
(b) "Affiliate" or "affiliated" means a person that directly, or
indirectly through one or more intermediaries, controls, is
controlled by or is under common control with another person.
(c) "Agent" means any person licensed pursuant to Chapter 5
(commencing with Section 1621), Chapter 5A (commencing with Section
1759), Chapter 6 (commencing with Section 1760), Chapter 7
(commencing with Section 1800), or Chapter 8 (commencing with Section
1831).
(d) "Applicant" means any person who seeks to contract for
insurance coverage other than a person seeking group insurance that
is not individually underwritten.
(e) "Consumer report" means any written, oral, or other
communication of information bearing on a natural person's
creditworthiness, credit standing, credit capacity, character,
general reputation, personal characteristics, or mode of living that
is used or expected to be used in connection with an insurance
transaction.
(f) "Consumer reporting agency" means any person who:
(1) Regularly engages, in whole or in part, in the practice of
assembling or preparing consumer reports for a monetary fee.
(2) Obtains information primarily from sources other than
insurance institutions.
(3) Furnishes consumer reports to other persons.
(g) "Control," including the terms "controlled by" or "under
common control with," means the possession, direct or indirect, of
the power to direct or cause the direction of the management and
policies of a person, whether through the ownership of voting
securities, by contract other than a commercial contract for goods or
nonmanagement services, or otherwise, unless the power is the result
of an official position with or corporate office held by the person.
(h) "Declination of insurance coverage" means a denial, in whole
or in part, by an insurance institution or agent of requested
insurance coverage.
(i) "Individual" means any natural person who is any of the
following:
(1) In the case of property or casualty insurance, is a past,
present, or proposed named insured or certificate holder.
(2) In the case of life or disability insurance, is a past,
present, or proposed principal insured or certificate holder.
(3) Is a past, present, or proposed policyowner.
(4) Is a past or present applicant.
(5) Is a past or present claimant.
(6) Derived, derives, or is proposed to derive insurance coverage
under an insurance policy or certificate subject to this act.
(j) "Institutional source" means any person or governmental entity
that provides information about an individual to an agent, insurance
institution, or insurance-support organization, other than any of
the following:
(1) An agent.
(2) The individual who is the subject of the information.
(3) A natural person acting in a personal capacity rather than in
a business or professional capacity.
(k) "Insurance institution" means any corporation, association,
partnership, reciprocal exchange, interinsurer, Lloyd's insurer,
fraternal benefit society, or other person engaged in the business of
insurance. "Insurance institution" shall not include agents,
insurance-support organizations, or health care service plans
regulated pursuant to the Knox-Keene Health Care Service Plan Act,
Chapter 2.2 (commencing with Section 1340) of Division 2 of the
Health and Safety Code.
(l) "Insurance-support organization" means:
(1) Any person who regularly engages, in whole or in part, in the
business of assembling or collecting information about natural
persons for the primary purpose of providing the information to an
insurance institution or agent for insurance transactions, including
either of the following:
(A) The furnishing of consumer reports or investigative consumer
reports to an insurance institution or agent for use in connection
with an insurance transaction.
(B) The collection of personal information from insurance
institutions, agents, or other insurance-support organizations for
the purpose of detecting or preventing fraud, material
misrepresentation or material nondisclosure in connection with
insurance underwriting or insurance claim activity.
(2) Notwithstanding paragraph (1), the following persons shall not
be considered "insurance-support organizations": agents,
governmental institutions, insurance institutions, medical care
institutions, medical professionals, and peer review committees.
(m) "Insurance transaction" means any transaction involving
insurance primarily for personal, family, or household needs rather
than business or professional needs that entails either of the
following:
(1) The determination of an individual's eligibility for an
insurance coverage, benefit, or payment.
(2) The servicing of an insurance application, policy, contract,
or certificate.
(n) "Investigative consumer report" means a consumer report or
portion thereof in which information about a natural person's
character, general reputation, personal characteristics, or mode of
living is obtained through personal interviews with the person's
neighbors, friends, associates, acquaintances, or others who may have
knowledge concerning those items of information.
(o) "Medical care institution" means any facility or institution
that is licensed to provide health care services to natural persons,
including but not limited to, hospitals, skilled nursing facilities,
home health agencies, medical clinics, rehabilitation agencies, and
public health agencies.
(p) "Medical professional" means any person licensed or certified
to provide health care services to natural persons, including but not
limited to, a physician, dentist, nurse, optometrist, physical or
occupational therapist, psychiatric social worker, clinical
dietitian, clinical psychologist, chiropractor, pharmacist, or speech
therapist.
(q) "Medical record information" means personal information that
is both of the following:
(1) Relates to an individual's physical or mental condition,
medical history or medical treatment.
(2) Is obtained from a medical professional or medical care
institution, from the individual, or from the individual's spouse,
parent, or legal guardian.
(r) "Person" means any natural person, corporation, association,
partnership, limited liability company, or other legal entity.
(s) "Personal information" means any individually identifiable
information gathered in connection with an insurance transaction from
which judgments can be made about an individual's character, habits,
avocations, finances, occupation, general reputation, credit,
health, or any other personal characteristics. "Personal information"
includes an individual's name and address and "medical record
information" but does not include "privileged information."
(t) "Policyholder" means any person who is any of the following:
(1) In the case of individual property or casualty insurance, is a
present named insured.
(2) In the case of individual life or disability insurance, is a
present policyowner.
(3) In the case of group insurance, which is individually
underwritten, is a present group certificate holder.
(u) "Pretext interview" means an interview whereby a person, in an
attempt to obtain information about a natural person, performs one
or more of the following acts:
(1) Pretends to be someone he or she is not.
(2) Pretends to represent a person he or she is not in fact
representing.
(3) Misrepresents the true purpose of the interview.
(4) Refuses to identify himself or herself upon request.
(v) "Privileged information" means any individually identifiable
information that both:
(1) Relates to a claim for insurance benefits or a civil or
criminal proceeding involving an individual.
(2) Is collected in connection with or in reasonable anticipation
of a claim for insurance benefits or civil or criminal proceeding
involving an individual. However, information otherwise meeting the
requirements of this division shall nevertheless be considered
"personal information" under this act if it is disclosed in violation
of Section 791.13.
(w) "Residual market mechanism" means the California FAIR Plan
Association, Chapter 10 (commencing with Section 10101) of Part 1 of
Division 2, and the assigned risk plan, Chapter 1 (commencing with
Section 11550) of Part 3 of Division 2.
(x) "Termination of insurance coverage" or "termination of an
insurance policy" means either a cancellation or nonrenewal of an
insurance policy, in whole or in part, for any reason other than the
failure to pay a premium as required by the policy.
(y) "Unauthorized insurer" means an insurance institution that has
not been granted a certificate of authority by the director to
transact the business of insurance in this state.
(z) "Commissioner" means the Insurance Commissioner.
791.03. No insurance institution, agent or insurance-support
organization shall use or authorize the use of pretext interviews to
obtain information in connection with an insurance transaction;
provided, however, that a pretext interview may be undertaken to
obtain information from a person or institution that does not have a
generally or statutorily recognized privileged relationship with the
person to whom the information relates for the purpose of
investigating a claim where there is a reasonable basis for
suspecting criminal activity, fraud, material misrepresentation or
material nondisclosure in connection with a claim.
791.04. (a) An insurance institution or agent shall provide a
notice of information practices to all applicants or policyholders in
connection with insurance transactions as provided below:
(1) In the case of a written application for insurance, a notice
shall be provided no later than:
(A) At the time of the delivery of the insurance policy or
certificate when personal information is collected only from the
applicant, an insured under the policy, or from public records; or
(B) At the time the collection of personal information is
initiated when personal information is collected from a source other
than the applicant, an insured under the policy, or public records.
(2) In the case of a policy renewal, a notice shall be provided no
later than the policy renewal date or the date upon which policy
renewal is confirmed, except that no notice shall be required in
connection with a policy renewal if either of the following applies:
(A) Personal information is collected only from the policyholder,
an insured under the policy, or from public records.
(B) A notice meeting the requirements of this section has been
given within the previous 24 months.
(3) In the case of a policy reinstatement or change in insurance
benefits, a notice shall be provided no later than the time a request
for a policy reinstatement or change in insurance benefits is
received by the insurance institution, except that no notice shall be
required if personal information is collected only from the
policyholder, an insured under the policy, or from public records or
if a notice meeting the requirements of this section has been given
within the previous 24 months.
(b) The notice required by subdivision (a) shall be in writing and
shall state all of the following:
(1) Whether personal information may be collected from persons
other than the individual or individuals proposed for coverage.
(2) The types of personal information that may be collected and
the types of sources and investigative techniques that may be used to
collect such information.
(3) The types of disclosures identified in subdivisions (b), (c),
(d), (e), (f), (i), (k), (l), and (n) of Section 791.13 and the
circumstances under which the disclosures may be made without prior
authorization, except that only those circumstances need be described
which occur with such frequency as to indicate a general business
practice.
(4) A description of the rights established under Sections 791.08
and 791.09 and the manner in which the rights may be exercised.
(5) That information obtained from a report prepared by an
insurance-support organization may be retained by the
insurance-support organization and disclosed to other persons.
(c) In lieu of the notice prescribed in subdivision (b), the
insurance institution or agent may provide an abbreviated notice
informing the applicant or policyholder of the following:
(1) Personal information may be collected from persons other than
the individual or individuals proposed for coverage.
(2) Such information as well as other personal or privileged
information subsequently collected by the insurance institution or
agent may in certain circumstances be disclosed to third parties
without authorization.
(3) A right of access and correction exists with respect to all
personal information collected.
(4) The notice prescribed in subdivision (b) will be furnished to
the applicant or policyholder upon request.
(d) 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.
791.05. An insurance institution or agent shall clearly specify
those questions designed to obtain information solely for marketing
or research purposes from an individual in connection with an
insurance transaction.
791.06. Notwithstanding any other provision of law, no insurance
institution, agent or insurance-support organization may utilize as
its disclosure authorization form in connection with insurance
transactions a form or statement which authorizes the disclosure of
personal or privileged information about an individual to the
insurance institution, agent, or insurance-support organization
unless the form or statement:
(a) Is written in plain language.
(b) Is dated.
(c) Specifies the types of persons authorized to disclose
information about the individual.
(d) Specifies the nature of the information authorized to be
disclosed.
(e) Names the insurance institution or agent and identifies by
generic reference representatives of the insurance institution to
whom the individual is authorizing information to be disclosed.
(f) Specifies the purposes for which the information is collected.
(g) Specifies the length of time the authorization shall remain
valid, which shall be no longer than:
(1) In the case of authorizations signed for the purpose of
collecting information in connection with an application for an
insurance policy, a policy reinstatement or a request for change in
policy benefits:
(A) Thirty months from the date the authorization is signed if the
application or request involves life, health or disability
insurance; or
(B) One year from the date the authorization is signed if the
application or request involves property or casualty insurance.
(2) In the case of authorizations signed for the purpose of
collecting information in connection with a claim for benefits under
an insurance policy:
(A) The term of coverage of the policy if the claim is for a
health insurance benefit; or
(B) The duration of the claim if the claim is not for a health
insurance benefit; or
(C) The duration of all claims processing activity performed in
connection with all claims for benefits made by any person entitled
to benefits under a nonprofit hospital service contract.
(h) Advises the individual or a person authorized to act on behalf
of the individual that the individual or the individual's authorized
representative is entitled to receive a copy of the authorization
form.
(i) This section shall not be construed to require any
authorization for the receipt of personal or privileged information
about an individual.
791.07. (a) No insurance institution, agent or insurance-support
organization may prepare or request an investigative consumer report
about an individual in connection with an insurance transaction
involving an application for insurance, a policy renewal, a policy
reinstatement or a change in insurance benefits unless the insurance
institution or agent informs the individual of the following:
(1) That he or she may request to be interviewed in connection
with the preparation of the investigative consumer report, and
(2) That upon a request pursuant to Section 791.08, he or she is
entitled to receive a copy of the investigative consumer report.
(b) If an investigative consumer report is to be prepared by an
insurance institution or agent, the insurance institution or agent
shall institute reasonable procedures to conduct a personal interview
requested by an individual.
(c) If an investigative consumer report is to be prepared by an
insurance-support organization, the insurance institution or agent
desiring such report shall inform the insurance-support organization
whether a personal interview has been requested by the individual.
The insurance-support organization shall institute reasonable
procedures to conduct such interviews, if requested.
791.08. (a) If any individual, after proper identification, submits
a written request to an insurance institution, agent or
insurance-support organization for access to recorded personal
information about the individual which is reasonably described by the
individual and reasonably locatable and retrievable by the insurance
institution, agent or insurance-support organization, the insurance
institution, agent or insurance-support organization shall within 30
business days from the date such request is received:
(1) Inform the individual of the nature and substance of such
recorded personal information in writing, by telephone or by other
oral communication, whichever the insurance institution, agent or
insurance-support organization prefers;
(2) Permit the individual to see and copy, in person, such
recorded personal information pertaining to him or her or to obtain a
copy of such recorded personal information by mail, whichever the
individual prefers, unless such recorded personal information is in
coded form, in which case an accurate translation in plain language
shall be provided in writing;
(3) Disclose to the individual the identity, if recorded, of those
persons to whom the insurance institution, agent or
insurance-support organization has disclosed such personal
information within two years prior to such request, and if the
identity is not recorded, the names of those insurance institutions,
agents, insurance-support organizations or other persons to whom such
information is normally disclosed; and
(4) Provide the individual with a summary of the procedures by
which he or she may request correction, amendment or deletion of
recorded personal information.
(b) Any personal information provided pursuant to subdivision (a)
above shall identify the source of the information if such source is
an institutional source.
(c) Medical record information supplied by a medical care
institution or medical professional and requested under subdivision
(a), together with the identity of the medical professional or
medical care institution which provided such information, shall be
supplied either directly to the individual 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 section, only with the approval of the qualified professional
person with treatment responsibility for the condition to which the
information relates. If it elects to disclose the information to a
medical professional designated by the individual, the insurance
institution, agent or insurance-support organization shall notify the
individual, at the time of the disclosure, that it has provided the
information to the medical professional.
(d) Except for personal information provided under Section 791.10,
an insurance institution, agent or insurance-support organization
may charge a reasonable fee to cover the costs incurred in providing
a copy of recorded personal information to individuals.
(e) 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. With respect to
the copying and disclosure of recorded personal information pursuant
to a request under subdivision (a), an insurance institution, agent
or insurance-support organization may make arrangements with an
insurance-support organization or a consumer reporting agency to copy
and disclose recorded personal information on its behalf.
(f) The rights granted to individuals in this section shall extend
to all natural persons to the extent information about them is
collected and maintained by an insurance institution, agent or
insurance-support organization in connection with an insurance
transaction. The rights granted to all natural persons by this
subdivision shall not extend to information about them that relates
to and is collected in connection with or in reasonable anticipation
of a claim or civil or criminal proceeding involving them.
(g) For purposes of this section, the term "insurance-support
organization" does not include "consumer reporting agency".
791.09. (a) Within 30 business days from the date of receipt of a
written request from an individual to correct, amend or delete any
recorded personal information about the individual within its
possession, an insurance institution, agent or insurance-support
organization shall either:
(1) Correct, amend or delete the portion of the recorded personal
information in dispute; or
(2) Notify the individual of:
(A) Its refusal to make such correction, amendment or deletion.
(B) The reasons for the refusal.
(C) The individual's right to file a statement as provided in
subdivision (c).
(b) If the insurance institution, agent or insurance-support
organization corrects, amends or deletes recorded personal
information in accordance with paragraph (1) of subdivision (a), the
insurance institution, agent or insurance-support organization shall
so notify the individual in writing and furnish the correction,
amendment or fact of deletion to:
(1) Any person specifically designated by the individual who may
have, within the preceding two years, received such recorded personal
information.
(2) Any insurance-support organization whose primary source of
personal information is insurance institutions if the
insurance-support organization has systematically received such
recorded personal information from the insurance institution within
the preceding seven years; provided, however, that the correction,
amendment or fact of deletion need not be furnished if the
insurance-support organization no longer maintains recorded personal
information about the individual.
(3) Any insurance-support organization that furnished the personal
information that has been corrected, amended or deleted.
(c) Whenever an individual disagrees with an insurance institution'
s, agent's or insurance-support organization's refusal to correct,
amend or delete recorded personal information, the individual shall
be permitted to file with the insurance institution, agent or
insurance-support organization:
(1) A concise statement setting forth what the individual thinks
is the correct, relevant or fair information.
(2) A concise statement of the reasons why the individual
disagrees with the insurance institution's, agent's or
insurance-support organization's refusal to correct, amend or delete
recorded personal information.
(d) In the event an individual files either statement as described
in subdivision (c), the insurance institution, agent or support
organization shall:
(1) File the statement with the disputed personal information and
provide a means by which anyone reviewing the disputed personal
information will be made aware of the individual's statement and have
access to it.
(2) In any subsequent disclosure by the insurance institution,
agent or support organization of the recorded personal information
that is the subject of disagreement, clearly identify the matter or
matters in dispute and provide the individual's statement along with
the recorded personal information being disclosed.
(3) Furnish the statement to the persons and in the manner
specified in subdivision (b).
(e) The rights granted to individuals in this section shall extend
to all natural persons to the extent information about them is
collected and maintained by an insurance institution, agent or
insurance-support organization in connection with an insurance
transaction. The rights granted to all natural persons by this
subdivision shall not extend to information about them that relates
to and is collected in connection with or in reasonable anticipation
of a claim or civil or criminal proceeding involving them.
(f) For purposes of this section, the term "insurance-support
organization" does not include "consumer reporting agency".
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.
791.11. No insurance institution, agent or insurance-support
organization may seek information in connection with an insurance
transaction concerning:
(a) Any previous adverse underwriting decision experienced by an
individual, or
(b) Any previous insurance coverage obtained by an individual
through a residual market mechanism, unless such inquiry also
requests the reasons for any previous adverse underwriting decision
or the reasons why insurance coverage was previously obtained through
a residual market mechanism.
791.12. No insurance institution or agent may base an adverse
underwriting decision in whole or in part on the following:
(a) On the fact of a previous adverse underwriting decision or on
the fact that an individual previously obtained insurance coverage
through a residual market mechanism; provided, however, an insurance
institution or agent may base an adverse underwriting decision on
further information obtained from an insurance institution or agent
responsible for a previous adverse underwriting decision. The further
information, when requested, shall create a conclusive presumption
that the information is necessary to perform the requesting insurer's
function in connection with an insurance transaction involving the
individual and, when reasonably available, shall be furnished the
requesting insurer and the individual, if applicable.
(b) On personal information received from an insurance-support
organization whose primary source of information is insurance
institutions; provided, however, an insurance institution or agent
may base an adverse underwriting decision on further personal
information obtained as the result of information received from an
insurance-support organization.
(c) On the fact that an individual has previously inquired and
received information about the scope or nature of coverage under a
residential fire or property insurance policy, if the information is
received from an insurance-support organization whose primary source
of information is insurance institutions and the inquiry did not
result in the filing of a claim.
791.13. An insurance institution, agent, or insurance-support
organization shall not disclose any personal or privileged
information about an individual collected or received in connection
with an insurance transaction unless the disclosure is:
(a) With the written authorization of the individual, and meets
either of the conditions specified in paragraph (1) or (2):
(1) If the authorization is submitted by another insurance
institution, agent, or insurance-support organization, the
authorization meets the requirement of Section 791.06.
(2) If the authorization is submitted by a person other than an
insurance institution, agent, or insurance-support organization, the
authorization is:
(A) Dated.
(B) Signed by the individual.
(C) Obtained one year or less prior to the date a disclosure is
sought pursuant to this section.
(b) To a person other than an insurance institution, agent, or
insurance-support organization, provided the disclosure is reasonably
necessary:
(1) To enable the person to perform a business, professional or
insurance function for the disclosing insurance institution, agent,
or insurance-support organization or insured and the person agrees
not to disclose the information further without the individual's
written authorization unless the further disclosure:
(A) Would otherwise be permitted by this section if made by an
insurance institution, agent, or insurance-support organization; or
(B) Is reasonably necessary for such person to perform its
function for the disclosing insurance institution, agent, or
insurance-support organization.
(2) To enable the person to provide information to the disclosing
insurance institution, agent or insurance-support organization for
the purpose of:
(A) Determining an individual's eligibility for an insurance
benefit or payment; or
(B) Detecting or preventing criminal activity, fraud, material
misrepresentation or material nondisclosure in connection with an
insurance transaction.
(c) To an insurance institution, agent, insurance-support
organization or self-insurer, provided the information disclosed is
limited to that which is reasonably necessary under either paragraph
(1) or (2):
(1) To detect or prevent criminal activity, fraud, material
misrepresentation or material nondisclosure in connection with
insurance transactions; or
(2) For either the disclosing or receiving insurance institution,
agent or insurance-support organization to perform its function in
connection with an insurance transaction involving the individual.
(d) To a medical-care institution or medical professional for the
purpose of any of the following:
(1) Verifying insurance coverage or benefits.
(2) Informing an individual of a medical problem of which the
individual may not be aware.
(3) Conducting operations or services audit, provided only such
information is disclosed as is reasonably necessary to accomplish the
foregoing purposes.
(e) To an insurance regulatory authority; or
(f) To a law enforcement or other governmental authority pursuant
to law.
(g) Otherwise permitted or required by law.
(h) In response to a facially valid administrative or judicial
order, including a search warrant or subpoena.
(i) Made for the purpose of conducting actuarial or research
studies, provided:
(1) No individual may be identified in any actuarial or research
report.
(2) Materials allowing the individual to be identified are
returned or destroyed as soon as they are no longer needed.
(3) The actuarial or research organization agrees not to disclose
the information unless the disclosure would otherwise be permitted by
this section if made by an insurance institution, agent or
insurance-support organization.
(j) To a party or a representative of a party to a proposed or
consummated sale, transfer, merger or consolidation of all or part of
the business of the insurance institution, agent or
insurance-support organization, provided:
(1) Prior to the consummation of the sale, transfer, merger, or
consolidation only such information is disclosed as is reasonably
necessary to enable the recipient to make business decisions about
the purchase, transfer, merger, or consolidation.
(2) The recipient agrees not to disclose the information unless
the disclosure would otherwise be permitted by this section if made
by an insurance institution, agent or insurance-support organization.
(k) To a person whose only use of the information will be in
connection with the marketing of a product or service, provided:
(1) No medical-record information, privileged information, or
personal information relating to an individual's character, personal
habits, mode of living, or general reputation is disclosed, and no
classification derived from the information is disclosed; or
(2) The individual has been given an opportunity to indicate that
he or she does not want personal information disclosed for marketing
purposes and has given no indication that he or she does not want the
information disclosed; and
(3) The person receiving such information agrees not to use it
except in connection with the marketing of a product or service.
(l) To an affiliate whose only use of the information will be in
connection with an audit of the insurance institution or agent or the
marketing of an insurance product or service, provided the affiliate
agrees not to disclose the information for any other purpose or to
unaffiliated persons.
(m) By a consumer reporting agency, provided the disclosure is to
a person other than an insurance institution or agent.
(n) To a group policyholder for the purpose of reporting claims
experience or conducting an audit of the insurance institution's or
agent's operations or services, provided the information disclosed is
reasonably necessary for the group policyholder to conduct the
review or audit.
(o) To a professional peer review organization for the purpose of
reviewing the service or conduct of a medical-care institution or
medical professional.
(p) To a governmental authority for the purpose of determining the
individual's eligibility for health benefits for which the
governmental authority may be liable.
(q) To a certificate holder or policyholder for the purpose of
providing information regarding the status of an insurance
transaction.
(r) To a lienholder, mortgagee, assignee, lessor, or other person
shown on the records of an insurance institution or agent as having a
legal or beneficial interest in a policy of insurance. The
information disclosed shall be limited to that which is reasonably
necessary to permit the person to protect his or her interest in the
policy and shall be consistent with Article 5.5 (commencing with
Section 770).
(s) To an insured or the insured's lawyer when the information
disclosed is from an accident report, supplemental report,
investigative report or the actual report from a government agency or
is a copy of an accident report or other report which the insured is
entitled to obtain under Section 20012 of the Vehicle Code or
subdivision (f) of Section 6254 of the Government Code.
791.14. (a) The commissioner shall have power to examine and
investigate into the affairs of every insurance institution or agent
doing business in this state to determine whether the insurance
institution or agent has been or is engaged in any conduct in
violation of this article.
(b) The commissioner shall have the power to examine and
investigate into the affairs of every insurance-support organization
acting on behalf of an insurance institution or agent which either
transacts business in this state or transacts business outside this
state that has an effect on a person residing in this state in order
to determine whether such insurance-support organization has been or
is engaged in any conduct in violation of this article.
791.15. (a) Whenever the commissioner has reason to believe that an
insurance institution, agent or insurance-support organization has
been or is engaged in conduct in this state which violates this
article, or if the commissioner believes that an insurance-support
organization has been or is engaged in conduct outside this state
which has an effect on a person residing in this state and which
violates this article, the commissioner shall issue and serve upon
such insurance institution, agent or insurance-support organization a
statement of charges and notice of hearing to be held at a time and
place fixed in the notice. The date for such hearing shall be not
less than 30 days after the date of service.
(b) At the time and place fixed for such hearing the insurance
institution, agent or insurance-support organization charged shall
have an opportunity to answer the charges against it and present
evidence on its behalf. Upon good cause shown, the commissioner shall
permit any adversely affected person to intervene, appear and be
heard at such hearing by counsel or in person.
(c) At any hearing conducted pursuant to this section the
commissioner may administer oaths, examine and cross-examine
witnesses and receive oral and documentary evidence. The commissioner
shall have the power to subpoena witnesses, compel their attendance
and require the production of books, papers, records, correspondence
and other documents which are relevant to the hearing. A stenographic
record of the hearing shall be made upon the request of any party or
at the discretion of the commissioner. If no stenographic record is
made and if judicial review is sought, the commissioner shall prepare
a statement of the evidence for use on review. Hearings conducted
under this section shall be governed by the same rules of evidence
and procedure applicable to administrative proceedings conducted
under the laws of this state.
(d) Statements of charges, notice, orders and other processes of
the commissioner under this article may be served by anyone duly
authorized to act on behalf of the commissioner. Service of process
may be completed in the manner provided by law for service of process
in civil actions or by registered mail or by a mailing service
offered by a third party mailing service with tracking capability
that is not more expensive than registered mail. A copy of the
statement of charges, notice, order or other process shall be
provided to the person or persons whose rights under this article
have been allegedly violated. A verified return setting forth the
manner of service, the return postcard receipt in the case of
registered mail, or signed receipt documentation, shall be sufficient
proof of service.
791.16. For the purpose of this article, an insurance-support
organization transacting business outside this state that has an
effect on a person residing in this state shall be deemed to have
appointed the commissioner to accept service of process on its
behalf, provided the commissioner causes a copy of the service to be
mailed immediately by registered mail, or by a mailing service
offered by a third party mailing service with tracking capability
that is not more expensive than registered mail, to the
insurance-support organization at its last known principal place of
business. The return postcard receipt or signed receipt documentation
for the mailing shall be sufficient proof that the same was properly
mailed by the commissioner.
791.17. (a) If, after a hearing pursuant to Section 791.15, the
commissioner determines that the insurance institution, agent or
insurance-support organization charged has engaged in conduct or
practices in violation of this article, the commissioner shall reduce
his or her findings to writing and shall issue and cause to be
served upon such insurance institution, agent or insurance-support
organization a copy of such findings and an order requiring such
insurance institution, agent or insurance-support organization to
cease and desist from the conduct or practices constituting a
violation of this article.
(b) If, after a hearing pursuant to Section 791.15, the
commissioner determines that the insurance institution, agent or
insurance-support organization charged has not engaged in conduct or
practices in violation of this article, the commissioner shall
prepare a written report which sets forth findings of fact and
conclusions of law. Such report shall be served upon the insurance
institution, agent or insurance-support organization charged and upon
the person or persons, if any, whose rights under this article were
allegedly violated.
(c) Until the expiration of the time allowed under Section 791.18
for filing a petition for review or until such petition is actually
filed, whichever occurs first, the commissioner may modify or set
aside any order or report issued under this section. After the
expiration of the time allowed under Section 791.18 for filing a
petition for review, if no such petition has been duly filed, the
commissioner may, after notice and opportunity for hearing, alter,
modify or set aside, in whole or in part, any order or report issued
under this section whenever conditions of fact or law warrant such
action or if the public interest so requires.
791.18. (a) Any person subject to an order of the commissioner
under Section 779.17 or Section 791.20 or any person whose rights
under this article were allegedly violated may obtain a review of any
order or report of the commissioner by filing in a court of
competent jurisdiction, within 30 days from the date of the service
of such order or report, pursuant to Section 1094.5 of the Code of
Civil Procedure. The court shall have jurisdiction to make and enter
a decree modifying, affirming or reversing any order or report of the
commissioner, in whole or in part.
(b) An order or report issued by the commissioner under Section
791.17 shall become final:
(1) Upon the expiration of the time allowed for the filing of a
petition for review, if no such petition has been duly filed; except
that the commissioner may modify or set aside an order or report to
the extent provided in subdivision (c) of Section 791.17; or
(2) Upon a final decision of the court if the court directs that
the order or report of the commissioner be affirmed or the petition
for review dismissed.
(c) No order or report of the commissioner under this article or
order of a court to enforce the same shall in any way relieve or
absolve any person affected by such order or report from any
liability under any law of this state.
791.19. Any person who violates a cease and desist order of the
commissioner under Section 791.17 may, after notice and hearing and
upon order of the commissioner, be subject to one or more of the
following penalties, at the discretion of the commissioner:
(a) A monetary fine of not more than ten thousand dollars
($10,000) for each violation; or
(b) A monetary fine of not more than fifty thousand dollars
($50,000) if the commissioner finds that violations have occurred
with such frequency as to constitute a general business practice; or
(c) Suspension or revocation of an insurance institution's or
agent's license if the insurance institution or agent knew or
reasonably should have known it was in violation of this article.
791.20. (a) If any insurance institution, agent or
insurance-support organization fails to comply with Section 791.08,
791.09 or 791.10 with respect to the rights granted under those
sections, any person whose rights are violated may apply to any court
of competent jurisdiction, for appropriate equitable relief.
(b) An insurance institution, agent or insurance-support
organization which discloses information in violation of Section
791.13 shall be liable for damages sustained by the individual about
whom the information relates. However no individual shall be entitled
to a monetary award which exceeds the actual damages sustained by
the individual as a result of a violation of Section 791.13.
(c) In any action brought pursuant to this section, the court may
award the cost of the action and reasonable attorney's fees to the
prevailing party.
(d) An action under this section shall be brought within two years
from the date the alleged violation is or should have been
discovered.
(e) Except as specifically provided in this section, there shall
be no remedy or recovery available to individuals, in law or in
equity, for occurrences constituting a violation of any provision of
this act.
791.21. No cause of action in the nature of defamation, invasion of
privacy or negligence shall arise against any person for disclosing
personal or privileged information in accordance with this chapter,
nor shall such a cause of action arise against any person for
furnishing personal or privileged information to an insurance
institution, agent or insurance-support organization; provided,
however, this section shall provide no immunity for disclosing or
furnishing false information with malice or willful intent to injure
any person.
791.22. Any person who knowingly and willfully obtains information
about an individual from an insurance institution, agent or
insurance-support organization under false pretenses shall be fined
not more than ten thousand dollars ($10,000) or imprisoned for not
more than one year, or both.
791.23. The rights granted under Sections 791.08, 791.09 and 791.13
shall take effect on October 1, 1981, regardless of the date of the
collection or receipt of the information which is the subject of such
sections. Nothing contained in subdivisions (k) and (l) of Section
791.13, or in any other provision of this article, shall in any way
affect the provisions of Section 770.1.
791.26. Where an authorization from the individual was granted to a
nonprofit hospital service plan prior to October 1, 1981, such
authorization shall be deemed to be in compliance with this article.
791.27. A disability insurer that provides coverage for hospital,
medical, or surgical expenses shall not release any information to an
employer that would directly or indirectly indicate to the employer
that an employee is receiving or has received services from a health
care provider covered by the plan unless authorized to do so by the
employee. An insurer that has, pursuant to an agreement, assumed the
responsibility to pay compensation pursuant to Article 3 (commencing
with Section 3750) of Chapter 4 of Part 1 of Division 4 of the Labor
Code, shall not be considered an employer for the purposes of this
section. Nothing in this section prohibits a disability insurer from
releasing relevant information described in this section for the
purposes set forth in Chapter 12 (commencing with Section 1871) of
Part 2 of Division 1.
791.28. (a) An insurer under a personal lines residential property
insurance policy, if it reports the claims history or loss experience
of insureds under those policies to an insurance-support
organization, shall provide the insured with the following additional
disclosure at the time that it provides the disclosure required
pursuant to paragraph (1) of subdivision (b) of Section 790.034:
"This insurer reports claim information to one or more claims
information databases. The claim information is used to furnish loss
history reports to insurers. If you are interested in obtaining a
report from a claims information database, you may do so by
contacting:
(Insert the name, toll-free telephone number, and, if applicable,
Internet Web site address of each claims information database to
which the insurer reports the information covered by this section)"
(b) This section shall become operative on July 1, 2006.
